New research by Transport & Environment (T&E) suggests that leasing companies across Europe have massively underestimated BEV resale values and are making big profits off the back of it, with EV drivers having to pay the price.
The report finds that leasing companies claim to be leading the transition to electrification while the data tells a different story. T&E analysis of used car prices suggests that leasing companies are slowing down the shift to electromobility due to their conservative pricing that overcharge drivers that want to lease an electric car.
The research reveals that across major European markets, leasing companies charge consumers 57% more to lease a BEV compared to an equivalent petrol model. The higher leasing deals for BEVs therefore means that leasing companies assume that BEVs will depreciate more than a petrol or diesel car.
T&E tested this assumption by analysing 2.7 million used car prices in Europe’s biggest markets, with results highlighting that the assumptions made by the leasing companies are not in line with actual market data. The average resale value of BEVs across Europe’s five largest markets is much higher than assumed by leasing companies.
However, the British Vehicle Rental & Leasing Association (BVRLA) has responded to T&E’s report, suggesting that they have showed “little understanding” of how the market operates.
Commenting on the report, Toby Poston, BVRLA Director of Corporate Affairs, said: “Vehicle leasing companies have led the charge in bringing battery electric vehicles (BEVs) to market. The accusations levelled by T&E show little understanding of how this market operates.
“Like a toddler taking its first steps, the BEV market still needs support in the form of tax incentives, grants and marketing campaigns that give fleets and drivers the encouragement they need to make the leap.
“This support disappears when it comes to selling the same vehicle on the second-hand market. The lease companies that have invested billions in untried, untested BEV technology are navigating this ocean without a map, compass or weather gauge.
“Last Summer, leasing companies were able to sell a limited number of battery electric vehicles into a buoyant market. Fast forward six months and they are presenting a surging inventory of electric cars in very different conditions. The current market has seen five consecutive months of falling prices and a growing imbalance between vehicle stock and prospective buyers.
“Despite these market conditions, BVRLA members continue to buy new electric vehicles in record volumes. They are absorbing the financial risks of a turbulent used market on behalf of their customers.
“The leasing sector is already doing its bit and cannot be expected to take unsustainable risks in a bid to underwrite cheaper electric cars.
“T&E’s research would be better focused on making the case for more Government support on public charging infrastructure and other measures that will benefit the used BEV market.”
