Electric vehicles retain their value better than the leasing industry claims, according to new analysis by Transport & Environment (T&E).
T&E examined used-car transaction estimates for leasing and financing deals in Germany, France, Italy and Spain, and uncovered a 12.9-percentage-point gap in depreciation between electric and combustion-engine vehicles.aut
However, it noted that these industry calculations don’t account for several variables affecting vehicle sales, adding that adjusting for these reduces the gap by 80% to just 2.6 percentage points.
For example, adjusting for subsidies that reduce the purchase price of new EVs, acquisition taxes on fossil-fuel vehicles, inflation and differences in fleet composition reduces the reported depreciation gap by 5.2 percentage points, T&E noted.
Further adjustments relating to the stabilisation of new EV prices reduce the gap by 5.1 percentage points.
It added that its findings could have implications for leading firms, enabling them to capitalise on growing demand’ for second-hand EV leases and offer longer lease terms.
‘Overly simplistic picture’
“The industry is painting an overly simplistic picture of EV depreciation to justify opposing EU fleet electrification targets. In reality, binding targets create market predictability, allowing leasing companies to manage depreciation with greater certainty,” commented Stef Cornelis, director of the Electric Fleets and Freight programs at T&E.
“Furthermore, targets will incentivise Member States with outdated car tax systems to adopt progressive reforms, which will ultimately reduce the real depreciation gap between powertrains over time.”
Corporate Clean Vehicles Regulation
T&E also called on EU lawmakers to support the forthcoming Corporate Clean Vehicles Regulation (CCVR), which will set electrification targets for the fleets of large companies.
It said that this regulation will secure ‘sustained EV demand’ while also closing the remaining depreciation gap.
Cornelis added that increased fuel prices are leading consumers to turn to EVs, which needs to be better supported by policy.
“With high fuel prices hitting EU drivers hard, rapid electrification is the only real solution,” he said. “Rather than subsidising fossil fuels, we must activate existing policy levers to support private drivers and businesses in making the switch. This will shield drivers from pain at the pump and truly back our automotive industry.” Read more here.
