The important role of leasing companies
Leasing companies play a key role in Europe, with 60% of new cars being leased, according to calculations by environmental group Transport & Environment, and the figure for EVs is estimated to be even higher, at around 80%.
Market research firm Dataforce also found that 60% of new EVs sold in 16 European markets, including Germany, the UK, France and Spain, are bought by corporate and commercial vehicle buyers, who are primarily leasing. Around half of the remaining EV sales to private buyers are also leased.
The corporate advantage is more pronounced in markets without EV subsidies for private buyers: in the UK and Belgium, for example, private individuals are expected to account for just 23% and 8% of new EV purchases in 2023, respectively.
The leasing industry is currently being hit hard by the sharp decline in resale prices of EVs.
Used-car prices have fallen since their peak in October 2022 due to several factors, including price cuts by Tesla, concerns about charging infrastructure and battery life, and an influx of cheap Chinese-made EVs.
Resale prices for EVs in Germany were 24% below pre-pandemic levels in early July, and down 30% in the UK, according to Autovista data. This contrasts with gasoline models, which remained around 15% higher in both markets.
“If we were really pressured to go all electric right away, shareholders would say, 'we don't want to take the risk,' and we'd exit the market,” said Tim Albertsen, CEO of Ivens, one of Europe's largest car leasing companies.
