The vehicle rental and leasing sector is seeing its optimism and enthusiasm for 2025 shackled by tax rises on top of regulatory and ZEV Mandate uncertainty. That is according to the BVRLA’s latest Industry Outlook Report, which shows that members are expecting somewhat of a ‘Jekyll and Hyde’ year in 2025.
Gerry Keaney, BVRLA chief executive, said: “Our energetic, innovative and resilient sector is facing tough times. Expectations that 2025 will see consumer and business demand grow across the board are being offset by turbulent trading conditions and regulatory roadblocks.
“Eyewatering increases to employer National Insurance contributions. Upheaval brought about by the Court of Appeal’s ruling on motor finance commissions. Constant confusion over decarbonisation targets. There is no let up. Alongside a shifting operational landscape, BVRLA members and their customers are required to maintain their leading role in meeting ambitious road transport decarbonisation targets. Those targets only ramp up and the Report reiterates the sector’s need for support that matches the ambitions.”
The BVRLA’s Industry Outlook Report 2025 was launched as part of the Industry Outlook Conference earlier today (5 December).
Future of Roads Minister, Lilian Greenwood MP, addressed delegates as part of the Conference, before a host of industry experts and sector leaders shared their insights to give delegates a complete picture for 2025.
At face value, the insights behind the latest report show an expectation that things will be better next year when compared to the last 12 months. Sector leaders are anticipating improvements in market conditions, led by fleet demand and lower interest rates. The scale of those improvements is dependent on how deep the impacts of the corresponding causes for concern turn out to be.
The Report shows that ICE car supply, cash flow, and the regulatory burden are all expected to get worse in 2025. Each can be directly linked back to the three macro factors that have come to a head in Q4 – NIC increase, ZEV mandate uncertainty, motor finance commission ruling – demonstrating how resilient the sector needs to be in the face of changeable market conditions.
The churn and uncertainty that companies are facing is also reflected in the fact that none of the top three challenges anticipated for 2024 make the top of the list for 2025. Residual value risk, supply constraints due to the ZEV mandate, and rising costs & energy prices are the biggest causes for concern in 2025, having featured down the rankings in last year’s report.
The BVRLA has already been taking steps to address these challenges and drive positive changes for members. Campaigns such as #happyEVafter and the Zero Emission Van Plan shine a light on the areas that need more attention, while the association continues to invest in improved learning and development resources and guidance that supports members at an operational level.
The full Industry Outlook Report is now available online. It features commentary and insights from across the BVRLA’s membership of over 1,000 companies working in vehicle rental and leasing, as well as fleet decision makers responsible for thousands of vehicles on UK roads*.
Read the full report on the Industry Outlook page.
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