By Stéphane Priami, CEO of Crédit Agricole Personal Finance & Mobility and Chairman of CA Auto Bank
For consumers, adopting different modes of transport is one way they can make greener choices. These decisions have been further encouraged by government policies such as the UK’s commitment to have all new cars and vans sold be zero emission by 2035. A goal that has resulted in a rapid influx in the number of electric vehicles (EVs) now on the road and reflected in recent data that reports there are now over a million being used, and that there has been a remarkable 18% growth in registrations as of last year.
A key part of ensuring these types of vehicles are convenient and accessible to everyone, will partially lie with the financial industry as it provides the necessary funds and solutions to help road users make this switch. This is why it’s a core objective for Crédit Agricole Personal Finance & Mobility to provide reliable, flexible and robust products to suit every type of driver, through its subsidiary CA Auto Bank.
Our History
Crédit Agricole Personal Finance & Mobility aims to be the leader in electric mobility in Europe and is aiming to have 1 in 3 of every new car financed be an electric vehicle by 2025. It has also been ramping up its work with its subsidiary CA Auto Bank, a pan-European leader in multi-brand automobile financing, leasing and mobility, to further move the needle. The company has a presence in 19 countries and as of 2023 has already reached over 2.5 billion outstanding through sustainable financing in the UK alone, through its local entity CA Auto Finance, and we are dedicated to furthering this progress.
UK Landscape and Beyond
In this region, we have seen a noticeable growth in the number of hybrid or EVs being used for company car use. It isn’t surprising given the favourable tax environment and incentives currently available and assuming this holds, we should continue to see this.
More broadly in Europe, the electrification of our roads is revolutionising the automotive industry with the battery-electric car market share reaching 14.6% in 2023. This shift presents businesses with a new set of considerations, for example EVs have a longer lifespan than traditional Internal Combustion Engine (ICE) vehicles which could impact how these cars are used within a wider business function.
CA Auto Finance is well positioned to offer support during this crucial transition due to our captive heritage meaning we understand the changing environment and have an insider’s perspective. Equally, as a wider brand we have been very purposeful with our sustainability overhaul over recent years, joining forces with leading industry heavyweights such as Tesla, BYD and MG to ensure our business is staying ahead of the curve.
Finding a New Lease of Life
As previously mentioned, EVs tend to last longer than traditional ICE vehicles, meaning there is going to be a surge of them coming back as used cars. As such, I think it’s important that lenders, dealers, and even the government, have a policy in place for how we manage this journey sustainably. If we don’t do that, the demand for used vehicles may begin to decrease and this could contribute to a high percentage being left or underutilised.
A possible way to address this, could be through the subscription model which allows drivers to switch up their car depending on their lifestyle needs. For example, a road user may want a more robust vehicle in the winter to tackle snowier conditions and then something more streamlined for the summer. A subscription model provides consumers with the reassurance that the vehicle is only theirs for a short time, offering an incentive to opt for a slightly older model.
At the moment, we’re starting to see a greater interest in this type of offering throughout Europe, however the uptake has been slower in the UK. But, while we aren’t quite there yet, it may be a trend we see pick up as we continue on this EV journey.
Looking into the Future of Automotive Finance
The automotive industry is changing, and it’s never been more important to be responsive to the developing landscape. As part of our shared commitment to supporting the transitions necessary to protect the environment, it’s key that we look at all of our existing processes and approach them with a new, sustainable lens.
As we look ahead, it’s clear that the financial services industry will continue to play an increasingly important role in accelerating the adoption of EVs, from taking on the necessary risk to providing consumers with the right solutions to help make the transition easier. At CA Auto Finance, this is a journey we are already on, and we’re excited to further support our wider network during the evolution.