As the public awareness of electric
vehicles and their benefits grows, leasing companies are very
well-placed to put themselves at the heart of a whole new asset
market.
BMW, Mitsubishi, Toyota, GM, and Daimler have all
announced in the past few months vehicle releases and tests in the
UK, each with the aim of getting in pole position for the emergence
of a mass market.
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And they are all testing the water, in one way or
another, with leasing schemes. The first half of 2010 will see
Toyota send 20 of its new plug-in Prius models to the UK as part of
a global 600-unit leasing scheme, while Mitsubishi intends to back
up its UK test fleet of 25 i-MiEVs with a further batch for use in
a lease test.
Daimler’s Smart ED business will launch a
100-vehicle leasing programme in April, ahead of going on general
sale in 2012, while sister brand Mercedes-Benz is planning a
leasing programme to launch its B-Class F-CELL Hydrogen fuelled
electric vehicle.
BMW is to begin a lease trial for its new ActiveE
in late 2010, while continuing with its highly publicised Mini-E
leasing programme – which now includes prime minister Gordon Brown
and Lord Mandelson among its lessees.
Finally, GM-owned Vauxhall is planning a debut for
its Ampera which, like many electrics, is scheduled for launch in
2012.
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By GlobalDataAlthough no distribution plan has been finalised,
Vauxhall said that an initial leasing option through partner ALD
automotive was a possibility.
Confidence hurdles
eroding
This vote of confidence by the major
manufacturers has done a lot to eradicate the perception that
electric vehicles are awkward, ‘novelty’ items with little prestige
value; a perception that has been one of the largest stumbling
blocks to fleet uptake so far.
Another common hurdle for the public has been
‘range anxiety’. This is being chipped away slowly by a combination
of technological and infrastructure development.
London mayor Boris Johnson promised in December
2009 that no Londoner would be more than one mile from a charge
point by 2015, while regional development agency One North East
will install 619 free-to-use charging points in the north-east of
the UK by January 1, 2011 – a point against the common complaint
that electric cars will be unusable outside major urban
centres.
And while the infrastructure is improving, so too
are the cars. Toyota’s Plug-in Prius and Mitsubishi’s i-MiEV, for
example, are fitted with lithium-ion batteries that perform
significantly better than earlier cells – the i-MiEV promises a 100
mile range and a seven hour charge time.
Spreading the cost
These new technologies come at a cost,
and electric vehicles are not cheap to start with – another reason
why leasing has been called upon to raise awareness of electric
vehicles in their infancy.
From the look of the numbers that are available so
far, it seems that most companies are leasing electric cars for
less than £400 per calendar month, putting them roughly on par with
an upper-priced mid-range Audi.
However, there is a reason for these relatively low
prices in many cases: government subsidy. The UK seems determined
to become a centre for the global electric vehicle economy, and is
doing everything it can to ease the way forward with cash.
The government is investing £400 million in
boosting electric car uptake, including £25 million to stimulate
programmes such as the Mini-E trial.
As well as these funds, December’s pre-Budget
report stated that electric cars will be exempt from company car
tax for five years (see Motor Finance 62, December 2009). Electric
van buyers will enjoy 100 percent exemption from capital tax in the
first year after purchase, and discounts for a further five years.
Electric cars in the UK were already exempt from vehicle excise
duty (VED).
The government has also proposed a £2,500 to £5,000
incentive, beginning in 2011, for buyers of ultra-low-carbon cars –
although the mechanics of distribution are, as yet, unclear.
One manufacturer said: “We were asked by the
government about the feasibility of the incentive being rolled into
a lease structure, but we suspect they will go with a simple grant
system in the end.”
Leasing electrics: A natural
fit
In any case, nearly every electric
vehicle in corporate use in Britain is being leased at present.
While by 2012 is expected that a regular purchase market will have
developed, leasing will no doubt retain its association with
electric car acquisition in the public mind.
The volume of electric business for lessors at
present is minimal, but the combined determination of government –
not to mention manufacturers chasing government money – should
ensure that the market expands rapidly within a few short
years.
And the leasing industry, if it is careful, can
stand to gain a lot from its work in getting electric motoring off
the ground, even outside of electric business.
At a time when leasing as a proportion of capital
investment in Europe is falling each year, according to Leaseurope
figures, the awareness of the industry that the current electric
boom is generating might be just the shot in the arm it needs.
Fred Crawley
