FN50: Collapse in used EV values hits leasing profits

Pre-tax profits for the FN50 have fallen by almost a third (31.6%) year-on-year after hitting £2 billion for the first time last year.

Record-breaking used car prices driven by the semiconductor shortage, pushed FN50 reported pre-tax profits to a new high in 2023. 

However, a collapse in battery electric vehicle (BEV) used values has impacted the financial performance of the FN50 this year. 

Collectively, the FN50 reported pre-tax profits of £1.39bn* – down £645 million on the £2.04bn achieved last year and slightly less than the £1.5bn reported by the FN50 in 2022.

With the slump in residual values (RVs) driving the decline in profits, FN50 companies actually reported record revenues in 2024.

The turnover of FN50 companies reached £13.6bn* – a £1.65bn (13.7%) increase on the £12bn reported last year.

Record revenues not being matched by increasing profits has therefore negatively impacted the FN50’s average profit margin – a ratio derived from a company’s profit divided by its revenue.

FN50 2024 figures suggest it has fallen from 17% in 2023 to 10% this year.

Industry trade body, the British Vehicle Rental and Leasing Association (BVLRA), has said that the UK’s vehicle leasing industry is facing an “existential threat” due to the collapse in used BEV values.

Incentives for used EVs

On average, values of used EVs for cars at the same age and mileage point have more than halved in value since September 2022, having fallen for 24 consecutive months.

The price of a lease is designed to account for the depreciation of a company car over the typical three-year lease period, based on estimated resale prices, or RVs.

But if second-hand prices end up being lower than anticipated when the lease ends, leasing firms take a financial hit when they get the vehicle back.

Philp Nothard, insight and strategy director at Cox Automotive, said: “The fleet and leasing sector is underpinning the transition to EV, but how long is that sustainable for?

“They need a very strong and viable remarketing secondary usage. That isn’t there right now and, with the onset of new entrants and price wars, that makes it even more challenging.”

Falling confidence in used EV values is already pushing up lease rates. 

With FN50 companies responsible for 75% of new EV registrations, the BVRLA says the status quo is unsustainable.

*The combined pre-tax profit and total turnover figures are estimates, with pre-tax profits based on the reported figures for 81% of the risk fleet, and revenues based on returns for 84%.

Read the complete analysis in our FN50 report