The latest Leasing Outlook report from the British Vehicle Rental and Leasing Association (BVRLA) reveals diverging trends in electric vehicle (EV) adoption, raising concerns about the long-term success of decarbonisation efforts.
The report highlights a growing gap in EV demand between company-provided cars and private motorists.
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Business contract hire (BCH) has seen a 7.5% year-on-year increase across all fuel types, while personal contract hire (PCH) has declined by 11.3%. Salary Sacrifice, which straddles the line between traditional company cars and private registrations, has surged by 63% year-on-year, with most of these registrations being electric cars.
The successes in BCH and Salary Sacrifice have contributed to the BVRLA’s leasing fleet expanding for the fifth consecutive quarter, with a 3.6% growth over the past year. However, this positive trend is overshadowed by the growing divide between corporate and personal EV demand. As the leasing fleet increasingly comprises electric vehicles, the used market’s demand must keep up to prevent a decline in residual values.
Toby Poston, BVRLA Director of Corporate Affairs, said: “The current trajectory of the transition to EVs is increasingly one of the haves and the have-nots. Phase-out targets and sales mandates are beginning to force the industry’s hand but will not succeed in isolation.
“Where incentives have been present, registrations have followed. The sectors currently benefitting from such support cannot bear the weight of the full transition alone. As the divergence between corporate and new and used private demand grows, the financial risk associated with bearing that risk becomes unsustainable.”
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By GlobalDataTo adapt to the volatile market for second-hand electric vehicles, the leasing sector is turning to used car leasing. This segment saw a 7.7% increase in demand in the last quarter alone, as more drivers opt for used EV leases to avoid the risk associated with residual values.
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