New Study Faults Companies for High EV Leasing Costs

Battery electric vehicle leases are overly priced, according to a recent T&E study of the used vehicle market. The European leasing deals for battery electric vehicles typically cost 57% more than deals for similar petrol versions. For instance, the monthly lease for a gas-powered Peugeot 208 is 371 euros ($393), while the monthly lease for an electric one is about 574 euros ($609).

The research reveals that the resale price of BEVs is comparable to that of diesel and gasoline vehicles. High lease fees signify a greater expectation that battery electric vehicles will lose value over the course of the lease period, so leasing companies would want the clients to bear the cost of the projected value loss of a vehicle during that time. However, things have changed.

It is unreasonable to charge more to lease BEVs. Battery-electric vehicles don’t incur as much depreciation as other types of vehicles, according to a T&E used-vehicle value survey. In France, Germany and the United Kingdom—the three largest markets in Europe—the depreciation of battery electric vehicles is comparable to that of diesel and gasoline. Even though there remains a disparity in Spain, that disparity is decreasing.

According to Stef Cornelis, leasing companies are currently overcharging clients if they wish to transition to BEVs. Leasing companies are overly cautious while determining the monthly leasing charges, and prices correspond to the situation five years ago. These companies clearly make profits with their pricing scheme at the expense of the clients, who are being overcharged at the same time, damaging the switch to battery electric vehicles.

With a 12 million-vehicle fleet across Europe, leasing businesses have a significant part to play in encouraging the transition to battery-powered vehicles. According to the study, these companies made up 22% of newly registered vehicles across Europe last year. However, most have none or weak zero-emission goals for running entirely on batteries by 2030. Because major automakers have already pledged to go fully electric by 2030, this level of commitment lags far behind market changes.

Because of this, the leasing industry is not driving the BEV shift. As per the survey, leasing companies in France and Spain are leasing fewer battery-electric vehicles compared to other fleet companies. The United Kingdom emerges as an exception, where the leasing industry is driving the BEV shift with a 34% adoption rate.

According to Cornelis, until leasing companies expedite their electric plans, the fight to build a used BEV market accessible to many people continues, which would further slowdown the decarbonization of the transportation industry.

It may soon be up to players in the EV space, such as Fisker Inc. (NYSE: FSR), to find ways to clip the clout of these leasing companies by coming up with their own schemes that customers can access directly.

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