Call for fleet EV incentives to end and to support used market instead

The former MD of Lex Autolease is arguing that financial incentives for battery electric vehicles (BEVs), aimed at fleets, should be scrapped in favour of support for the used market instead.

With BEVs accounting for 1.7% of the used car market in quarter two, Richard Jones, who is now managing director of Motonovo Finance, wants concerted action to help buyers make the switch.

Jones said that, while he is pleased to see the 81.8% growth in used BEV sales, it must be set against the latest new car registration data, where BEVs achieved a 16.1% market share.

He explained: “Used BEV supply is set to increase significantly in the coming months, so action is needed to encourage consumers to switch to used BEVs.

“Some of this is educational, but I believe support is also needed from Government agencies to bridge the financial gap with comparable ICE vehicles, as well as help to fund home chargers.

“Arguably, it is time to start switching existing EV support incentives from business users and fleets to used BEV consumer buyers to help create a more sustainable used BEV market.”

Jones believes that retailer partners such as lenders, remarketing suppliers, value-added product partners and parts suppliers can help the used retailer community to guide consumers through the different user processes and perceived challenges of switching to a BEV, such as vehicle charging and range issues.

However, he is clear that financial support for used BEV buyers can help embed BEVs more rapidly on the road to net zero.

“Sustaining the upward trajectory of new BEV sales means we need to have a vibrant used BEV market as well,” he continued.

“There is a symbiotic relationship that cannot be understated. Strong used values, centred on consumer demand, equate to more confidence in setting residual values, creating a virtuous circle that is mutually beneficial for new and used car markets.

“These markets need to create greater consumer demand for BEVs.

“Now that new BEVs are gaining market maturity, switching financial support to the used BEV sector is a progressive solution to embed a sustainable new and used BEV sales model.”

Used EV prices have been in freefall over several months, with the average retail value (£31,430) in June falling 19.1% year-on-year, according to the Auto Trader Retail Price Index.

It made June the sixth consecutive month of year-on-year decline, with average EV prices falling by around £5,000 since January (£36,179) and nearly £9,500 since their peak in July 2022 (£40,728).

Fleets have previously voiced concerns that the poor performance of EVs in the used market could force leasing companies to increase monthly rentals on new electric cars.