The auto vehicle leasing industry may be instrumental in pushing electric vehicle penetration in the European Union by allowing tens of millions of households to tap into the growing used-EV market. Experts predict that at current electrification rates, EV units from today will hit the used vehicle market about 2035, giving 33 million EU households access to secondhand EVs in slightly more than a decade.
According to a new Transport & Environment (T&E) report, this could increase by 56% to 51 million if the leasing industry rapidly increases its uptake of electric vehicles. By taking over EV-associated acquisition and maintenance costs, the auto-leasing segment could expand access to the burgeoning EV sector to an additional 18 million households.
Data shows that four in every 10 cars that enter the EU’s secondhand market are facilitated by leasing companies. The segment channels a significant number of the regional bloc’s used cars into the secondhand market and could be key to promoting electric vehicle use in close to 20 million European households.
It could be especially instrumental in electrifying the used vehicle market if auto leasing companies begin electrifying their fleets faster, putting the EU one step closer to reaching its electrification goals. Consequently, T&E is now calling on the top seven car-leasing companies in Europe to commit to phasing out fossil-fuel cars from their fleets and stop leasing them entirely in favor of battery electric vehicles (BEVs) as of 2028.
The used-vehicle market supplies a large portion of the EU’s fleet of vehicles. Nearly 8 out of 10 EU citizens, including 90% of low- and middle-income households purchase secondhand cars rather than new ones. Additionally, 62% of high-income groups also buy their vehicle used. Used electric vehicles are particularly attractive because they have lower ownership costs compared to used internal combustion engine (ICE) cars.
The T&E study found that the leasing sector could facilitate the entry of 18 million more used battery electric cars in the market by 2035. These units would cost around $10,956 (€10,000) or less, making them perfectly affordable for middle- and even low-income households. As such, T&E notes that a steady supply of used electric cars into the secondhand market would allow cost-conscious European families to access alternative energy vehicles.
Stef Cornelis, T&E’s director of electric fleets, says the region’s car-leasing companies hold the keys to a mass influx of affordable EVs in the used electric vehicle market. He says that the leasing segment could expand EV access and accelerate EV adoption for 80% of European families. As more vehicle-leasing companies take on models from manufacturers such as Lucid Motors (NASDAQ: LCID), thousands of families could have their pick of used EVs on the secondary market at affordable prices.
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