Rental rises for fleets as leasing losses mount on used EVs

Fleets are facing an increase in monthly rental rates for battery electric vehicles (BEVs) as leasing companies try to recover from a collapse in residual values.

Such is the decline in used BEV values, one leasing company even said it would be forced to walk away due to the financial risks involved if more stringent zero-emission vehicle (ZEV) targets were imposed.

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 residual values (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.

“The fleet and leasing sector is underpinning the transition to EV, but how long is that sustainable for?” Philip Nothard, Cox Automotive

Used EV prices have fallen for 21 consecutive months, with the cumulative decrease in residual prices for EVs since September 2022 some 51%, compared to 11% for petrol.​

Philp Nothard, insight and strategy director at Cox Automotive, said: “That’s somebody’s cash – that’s somebody’s capital that has taken those hits.