Leasing companies are hindering the transition to electric cars due to their high pricing and weak zero-emission targets, according to a new study by Transport & Environment (T&E). The analysis of the used car market reveals that leasing offers for battery electric vehicles (BEVs) are on average 57% more expensive than their petrol counterparts. This is despite BEVs having similar resale value to diesel and petrol vehicles.
The higher leasing prices for battery electric cars are unjustified, as T&E’s analysis of 2.7 million used car prices shows that BEVs do not depreciate more than other types of cars. This reflects consumer confidence in newer models with improved technology, as consumer demand for battery electric cars, new and used, is at an all time high.
Leasing companies have an outsized role to play in the transition to battery electric cars, as they accounted for 22% of new car registrations in Europe in 2022. However, none of the leasing companies have targets to become fully battery electric by 2030, and their commitments are far behind market dynamics as large carmakers have already committed to 100% battery electric by 2030.
The study finds that in France and Spain, BEV uptake in the leasing sector is lower than other corporate fleets and even private households. The UK stands out as an exception where the leasing sector is leading the BEV transition with a BEV uptake of 34%.
Stef Cornelis, director of electric fleets at T&E, said: “Today customers are being overcharged by leasing companies if they want to switch to a battery electric car. Leasing firms are too conservative when setting their monthly prices. Their rates reflect the state of play from 5 years ago. With this pricing strategy, their profits are obviously high and consumers are overpaying to go electric. At the same time, they are harming the BEV transition.”
Unless leasing companies rapidly accelerate their electrification plans, we will struggle to supply a second-hand market that will make BEVs affordable to far more people and we further delay the decarbonisation of the transport sector. It is clear that leasing companies must step up and become green leaders in order to facilitate the shift to electromobility.
FAQ
Q1. How electric car batteries work?
A1. Electric car batteries are typically lithium-ion batteries that store energy and power the motor. They are recharged by plugging the car into an electric outlet or charging station.
Q2. What electric car has the longest range?
A2. The Tesla Model S has the longest range of any electric car currently on the market, with a range of up to 370 miles on a single charge.
Q3. How electric car batteries are recycled?
A3. Electric car batteries are recycled by breaking them down into their component parts and then separating out the metals, plastics, and other materials for reuse. The metals are melted down and reused in new products, while the plastics and other materials are recycled into new products.
