Up to £67m of financing up for
grabs for electric vehicles contract.
Go deeper with GlobalData
Leasing businesses connected to Nissan and also
Smith Electric Vehicles (SEV), the manufacturer of road-going
commercial electric vehicles, are expected to be involved in the
lucrative deal.
It coincides with a bid by Smith’s US joint venture
partner to buy out the SEV business in the UK and its share of the
US venture.
The deal would yield £37m in cash for its owners,
the Tanfield Group, and potentially £33m worth of credit in any
initial public offering (IPO) of the electric vehicles business
before September 2015.
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By GlobalDataThree leasing companies are understood to provide
finance to SEV. Deals are brokered by Lewes-based Sales Focus Ltd,
run by Colin Hayter and Donald Smith.
Bids lodged
Last month bids from these manufacturers, as well
as by scooter company Elecscoot, were lodged with TfL, which
manages most transport systems in Greater London.
Having received initial bids, TfL now plans to
draw-up a shortlist of companies which will go through to the next
stage. Other companies are understood to have also lodged bids.
The vehicles will be used across a range of public
bodies across London, including potentially the Metropolitan
Police, London Fire Brigade, and TfL’s fleet of road works
vehicles.
It is unclear whether finance linked to the bid
from Nissan will be sourced through third party leasing companies
or through its dealer-linked business finance arm.
Potentially finance could be sourced via Nissan
Business Finance’, a white labeling programme with Arval, which
largely provides finance to local businesses through the
manufacturer’s dealer network.
However, in some cases Nissan Business Finance
provides finance for larger deals.
“Any Nissan dealer can provide funding for business
deals of a variety of sizes, and while this is the primary focus of
that support there is no reason why Arval would not support us on a
much larger fleet requirement,” said Tony Lewis, corporate sales
director of Nissan Motor (GB) Ltd.
Lewis added, however: “The majority of large fleet
and corporate business goes through one or more of the top 50
leasing companies.
“The larger corporate customers will have either a
preferred supplier or a panel of leasing companies and banks that
fund their vehicles.
“In some cases the tender for vehicles and vehicle
prices will be in parallel to or along side a tender for funding –
especially for large fleet renewal programmes.
“Nissan works with all the top leasing companies in
providing solutions to a range of customers. This is of course if
they wish to lease or contract hire; some organisations will still
buy outright.”
Electric scooter specialist Elecscoot does not at
present have finance agreements.
“We are still an early stage SME,” said Andy
Haddon, Elecscoot business development director.
However, Haddon added: “We are always open to
negotiations if that helps us with the agreement.”
Elecscoot, based in Consett in County Durham, is
planning to build scooters using UK technologies and body parts.
Currently it relies on importing parts from overseas and using
electric technologies from companies in northern England, said
Haddon.
Bidding companies issued separate submissions,
although one said it “had discussions with other organisations”
during the bidding phase.
The scheme, which includes the provision of up to
1,300 vehicles to TfL, forms part of the Mayor of London’s plans
launched in 2009 to stimulate the use of electric vehicles in the
UK capital.
Funding ring fenced
Some 70% of the funding is ring fenced for EV and
hybrid passenger vehicles of up to eight seats, which is understood
to be ideal for the North-East built Nissan Leaf.
The remainder is to be split between Electric and
hybrid goods vehicles weighing between 3.5 and 12 tons, electric
scooters and motorbikes, and passenger vehicles of less than five
tonnes.
The leasing of batteries for the vehicles will form
part of the overall finance agreements, rather than be treated
separately.
As part of his drive for greater use of green
vehicles, London mayor Boris Johnson, also plans to create 25,000
electric vehicle charging points across London by 2015. The mayor
plans to cut London’s CO2 emissions by 60% by
2025.
A further 300 low-carbon vehicles are needed
by public bodies outside Greater London.
