Electric vans help leasing sector return to growth
The increasing appeal of electric vehicles, and in particular electric vans, is helping the leasing sector to return to growth following the initial impact of the pandemic – according to the latest figures from the BVRLA (British Vehicle Rental and Leasing Association).
The group’s latest Leasing Outlook report, which covers the third quarter of 2021 also shows the BVRLA fleet has returned to growth for the first time in three years, up 2.8% year on year.
In the third quarter of 2021, battery electric vehicles (BEVs) accounted for 21% of new cars added to the BVRLA fleet, and the total number of BEVs on the fleet expected to grow a further 53% (from 137,000 to 210,000) by Q3 2022. This growth is in the face of continued challenges to vehicle supply caused by the global semiconductor shortage, with the positive figures underlining the returning confidence in both the sector and wider economic situation.
With the pandemic in part accelerating changes in how drivers and companies view vehicle ownership, demand is being driven from the company car market, where 31% of Business Contract Hire and 68% of salary sacrifice orders are now for electric vehicles. Those figures rise to 57% (BCH) and 82% when factoring in plug-in hybrid vehicles.
The association’s Leasing Outlook report shows that the recent popularity of vans continues to accelerate, growing by more than 40,000 units year on year, approximately 10%. Vans now account for one-in-four vehicles operated by BVRLA members in the leasing sector, with their success due in part to the shift to a digital economy reliant on home delivery services.
BVRLA Chief Executive, Gerry Keaney said: “Our industry can be immensely proud of the progress it has made over the last 12 months. Our sector continues to lead the charge towards zero-emission vehicles, even in the face of a global supply shortage.
“We have seen the lease fleet size return to growth for the first time in three years, demonstrating the sector’s resilience. While this is predominantly due to the popularity of vans, it is notable that car registrations have seen positive performance, marking a significant turnaround as the recovery from 2020 takes hold.
“The positive performance is testament to the quality of the vehicles available, the confidence in the long-term health of the market, and the ongoing commitment of BVRLA members to decarbonise their fleets to ensure the UK can meet its Net Zero ambitions.”
Electric van expert Paul Kirby commented: “‘It is great to see the growth within the leasing sector for vans. It demonstrates that the sector is taking the need to look after the van customer seriously. I believe that the growth is, in part, due to the industry looking to mitigate the risk of the next van purchase. This is driven by uncertainty around Residual Values (RV’s). If diesel, because the market for those vehicles may shrink and if electric, then because of the leap forward in technology makes people unsure of the second market take up. Either way the leasing sector provides a degree of certainty for this transitional period.”
Paul Kirby runs his own consultancy business called EV Essentials and is a member of the Transport + Energy editorial board.
Image courtesy of BVRLA.
