Business and retail segment imbalance hits EVs most, says BVRLA

Business and retail demand for new vehicles are moving in opposite directions as retail demand falls, according to the BVRLA’s latest Leasing Outlook report.

Lead times are returning to pre-pandemic levels and the BVRLA leasing fleet is up 2.4% to 1.9m vehicles. Cars and vans recorded year-on-year growth, +1.9% and +3.9% respectively.

Toby Poston, BVRLA director of corporate affairs, said: “It is great to see the BVRLA member lease fleet growing, but this growing imbalance between the business and retail segments – particularly for EVs – is a real concern.

“Benefit-in-kind and salary sacrifice incentives have fast-tracked corporate uptake of electric vehicles and are underpinning our progress towards the ZEV Mandate targets.

“Fleet operators and business drivers cannot bear the weight of the EV transition alone, especially as the Mandate targets ratchet up in future years. The spotlight must turn to the retail sector. It needs igniting.”

The Business Contract Hire market has contributed greener vehicles. In Q4 2023, 75% of fleet additions were battery powered or plug-in hybrids. However, petrol accounts for two-thirds of new registrations in Personal Contract Hire.

Second-life leasing or extended contacts have been helpful for lease companies navigating volatile used values. Despite used car agreements rising 3% from Q3 to Q4 2023, the average contract length for BCH agreements is 40 months.

Alternatively, due to longer repair times and rising costs, managing asset finance risk through better vehicle management while on fleet may be encouraged.