Uncertainty Over Used Values On EVs Causing Issues For SME Fleets

THE sliding values on used electric vehicles (EVs) are causing problems for SME fleets and action needs to be taken to improve their prospects in the used car market, believes the Association of Fleet Professionals (AFP).

Residual value (RV) reductions of between 10-20% were not uncommon over the last 12 months for some of the most popular fleet EVs and that the trend had clear repercussions for SME fleets reckoned Paul Hollick, Chair of the fleet managers association.

“Until perhaps a year ago, it was possible to make a convincing financial case for EVs at board level. Yes, they were expensive to buy new but residual values were remarkably strong and charging was cheap. Now the second and third parts of that argument have started to fall away,” said Paul.

“Of course, fleets are still going to want to continue the process of electrification thanks to benefit in kind advantages for drivers, the 2030 deadline edging closer and for environmental reasons. However, as AFP members continually testify, being able to back all of this up with a sound financial argument has always made the process much easier.”

Paul said that the question facing fleets and the wider motor industry now was what could be done to help strengthen RVs and reduce the cost of power?

“The latter problem is potentially the easiest to resolve. Fleets that concentrate on home charging are still benefiting from lower costs and over the next year or so, we can expect to see electricity prices fall to a level that, if not comparable to before the war in Ukraine, will be at least much more competitive than today.

“However, addressing the used EV market is going to be more of a challenge. How do we change the perceptions of used car and van buyers, convincing more of them that these vehicles are desirable? It seems to us that doing so centres around making EVs more affordable while ensuring that consumers view them as practical propositions on a day-to-day basis.

“The affordability question is a tricky one. In some other countries, of course, there are government subsidies aimed at the used EV market, ranging from low cost loans to lump sums, and these have proven effective. It would be good to see similar moves here. However, it is the practicality issue that we feel probably needs greater attention. The UK simply doesn’t have enough chargers of the right types in the right places, and despite infrastructure growth, it’s not clear that this will change at any point soon.

“It’s not just pictures of queues for chargers in the news that make this situation apparent to used car buyers but many people have come back from Easter breaks in France and Germany, and noted how much more advanced and usable their networks appear to be.”