Third of electric vehicle contracts extended at Zenith to protect RVs

One-on-three battery electric vehicle (BEV) contracts have been formally extended by Zenith as part of Project Volt, the group’s lease extension programme to address the decline in used plug-in prices.

However, despite some 29% of Zenith’s BEVs being kept for longer, continued lower residual value (RV) profits hit the leasing companies overall adjusted EBITDA (earnings before interest, taxes, depreciation, and amortisation) was £33.8 million, down 28.4% year-on-year. 

Adjusted EBITDA excluding RV profits, meanwhile, was up 16.1% year-on-year for the nine months to December 31, 2024.

Zenith, which reported a risk fleet of 69,492 cars and vans in this year’s FN50, has 170,000 vehicles under management, according to its latest financial update, with its corporate funded fleet increasing by 5.7% year-on-year.

BEV concentration in the corporate and consumer funded fleet and order bank remains balanced, comprising 46% (27,871) BEV and 46% of the 5,393 vehicles in the order bank. 

Tim Buchan (pictured), Zenith chief executive officer, said: “While the trading environment remains challenging, our underlying business continues to strengthen with adjusted EBITDA excluding residual value profits, growing 16.1% year-on-year. 

“We’ve delivered a positive performance in our corporate-sponsored schemes, particularly salary sacrifice, where orders increased by 37% in the last quarter year on year, as businesses look for cost effective ways to retain employees. 

“In our commercial division, we’ve continued to grow our MSU maintenance solutions, and our trailer rental business delivered a successful Christmas peak period.” 

“The new business pipeline, in particular for new fleet management contracts, remains strong,” he added.

With the industry not meeting the first zero emission vehicle (ZEV) mandate target last year, Zenith is looking forward to the outcome of the recently closed Government consultation, which requested input from the fleet and leasing sector to identify the support needed to encourage the uptake of zero-emission vehicles by consumers and businesses.  

“We’re also encouraged by the recent stability in used BEV car prices that we, and the wider industry, have seen,” continued Buchan.

A flat year for the used car market is being predicted by Cox Automotive, with 7.6 million used car transactions expected by the end of 2025. 

It reports that vehicle prices show early signs of stabilisation, especially across electric vehicle (EV) models, which it says is a positive development given the used EV parc is set on a significant growth trajectory over the next four years.  

Buchan concluded: “As I prepare to hand over my executive responsibilities to Richard Jones, I’m proud of the way Zenith has navigated the last few years; staying true to its core values; and focusing on delivering the best outcomes for our stakeholders. 

“I have great confidence in Richard and the leadership team to continue driving the business in the right direction as it enters this next phase. 

“I’d like to say a final, and heartfelt, thank you to all our customers, business partners and employees for their ongoing support.”