Leasing costs of battery electric vehicles (BEVs) have fallen throughout 2018 according to data experts at Cap HPI.
The study looked at five of the best-selling models in the UK and discovered that monthly lease costs had fallen by 9.5% on average.
The UK’s best-selling electric car, the Nissan Leaf saw monthly lease values fall by 6.6% between January and November 2018. Monthly lease prices for the Renault Zoe fell by 16% between June and November.
Between in the 12 months up to November 2018, the BMW i3 saw lease prices drop by 9.2%. The Volkswagen e-Golf saw prices drop 14% over the same period.
The Jaguar I-Pace saw the smallest price drop with a fall of only 1.7% since April 2018.
Mark Turnbull, global head of consulting at Cap HPI, said: “Over the next few years the new price of BEVs will come down as more affordable ‘mainstream’ model ranges are introduced by many manufacturers.
“Used buyer perception will continue to improve as battery ranges are extended and charging times are reduced, and electric car technology proves to be robust and reliable. So subject to adequate investment in charging infrastructure, and positive government legislation, I believe their residual values will be stronger.
“A pincer movement of lower new prices and improved RVs will mean less depreciation in pound terms, and cheaper lease rates will speed up the adoption of this technology.”
Registration figures from the Society of Motor Manufacturers and Traders (SMMT) show that petrol electric hybrids remained the most popular choice in 2018, up 21.3% to 81,156 units.
Plug-in hybrids (PHEVs) also recorded a strong uplift (24.9%) over the year, though the figures suggest growth is slowing following the removal of the Government's plug-in car grant for these vehicles in October.
Demand for PHEVs grew almost 30% in the first 10 months, but year on year increases fell to 3.1% and 8.7% in November and December respectively.
Pure electric cars, meanwhile, grew 13.8% in the year but, with just 15,474 registered, they still make up only 0.7% of the market. Given the reduction in government incentives, the pace of growth of plug-in cars is now falling significantly behind the EU average
Supply issues and the switch to WLTP have been blamed for the availability and lead times of many electric and plug-in hybrid cars in the last 12 months.
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Gareth has more than 20 years’ experience as a journalist having started his career in local newspapers in the 1990s. Prior to joining Fleet News in 2008, he worked in the public sector as a media advisor and is currently news editor at Fleet News.
Devon Guy - 11/01/2019 18:21
Really interesting article. I sort of feel that over the last 10 years we have been lulled into a false sense of security with stable and competitive leasing deals associated with traditionally engined cars, supported by similarly stable resale prices. Admittedly consistently low borrowing rates have helped. Similarly, vehicle core technology and build quality has not changed sufficiently enough to spook the market to factor large risk contingencies into lease rates. Admittedly, the Dieselgate incident has impacted this in recent times, but we need to recognise that with brand new BEV technology, which is continually changing and rapidly developing, will mean greater risk and volatility in the market place over the next few years. Undoubtedly the impressive BEV sales volumes has allowed the proof of concept to be developed (in relation to real life reliability, performance and risk data associated with those vehicles). All of which will provide market confidence, which will mean better resale values and less of a risk premium being included in the BEV lease rates once each model matures. Nonetheless, I feel the lease prices are still too high , Insurance companies need to be challenged by BVRLA and government as the risk premium still levied on BEVs is unjustified. The occasional high profile Tesla car fire is no longer a justification for premiums running double that for a fossil fuelled engine. As newer cars enter the market we will see a consistent trend of higher lease charges to compensate for risk. The same models will see a reduction in lease rates and later stabilisation once the vehicle is proven reliable and safe. Referring to the ipace in the article, undoubtedly the vehicle sits in the initial “high cost new Tech category” requiring a risk premium on new leases. Jaguar’s historic inconsistent reliability issues on some models also will mean the market is factoring a risk premium. If the leasing industry can accept that price volatility will be created with this new technology and they see a pattern emerging, maybe a brave and innovative lease provider will move to a new contract term proposal whereby annual leasing price reviews take place, and prices are diminished to reflect reductions in perceived insurance risk, maintenance, end of life resale values / depreciation. It would certainly demonstrate a true Environmental commitment to the cause and likely generate significant market share increase for the company.