Company EVs Enhance BVRLA Leasing Fleet Efficiency

Welcome, Net Zero News readers,

In a promising turn of events for the electric vehicle (EV) sector, the British Vehicle Rental and Leasing Association (BVRLA) has reported a noteworthy increase in the leasing fleet, marking a 1.4% growth over the past year. This uptick highlights the growing popularity of company-provided EVs as more businesses embrace sustainable transportation solutions.

The latest leasing outlook report from the BVRLA reveals that the salary sacrifice scheme is a significant driver behind this growth, boasting an impressive 51% increase. This shift is playing a crucial role in the UK’s transition to cleaner and greener vehicle models, aligning perfectly with national and global sustainability goals.

As a result of this sustained growth, the BVRLA leasing fleet has now reached a remarkable 1.94 million vehicles. Notably, Business Contract Hire (BCH) has emerged as the largest segment of the fleet, demonstrating a solid growth rate of 6.3%. Both BCH and salary sacrifice benefit from an advantageous taxation regime for company cars, particularly for electric vehicles, with Benefit in Kind rates secured through to the 2029/30 tax year. This supportive environment is encouraging businesses to invest in cleaner vehicles.

However, the report also sheds light on contrasting trends within the sector. Personal Contract Hire (PCH) agreements, which do not enjoy the same benefits as BCH and salary sacrifice arrangements, have seen a decline in demand for EVs. This segment has experienced a significant year-on-year drop of 15.1%, primarily due to increasing cost pressures stemming from higher interest rates, the ongoing cost of living crisis, and a general rise in new vehicle prices. These factors have created challenges for potential PCH customers, resulting in slower adoption of electric vehicles compared to their company-provided counterparts.

Despite these challenges, the strength of Business Contract Hire and salary sacrifice schemes is proving instrumental in accelerating the adoption of electric vehicles across the UK. The BVRLA’s leasing fleet is now the cleanest it has ever been, with electric vehicles representing the most popular fuel type among new additions to the fleet in the third quarter of 2024, accounting for an impressive 44% of all new vehicles added (compared to petrol vehicles, which made up 23%). When examining salary sacrifice agreements specifically, a staggering 87% of new orders were for battery electric vehicles (BEVs) in Q3 2024.

Toby Poston, Chief Executive of the BVRLA, emphasised the importance of salary sacrifice in the transition to zero-emission vehicles. He stated, “Salary sacrifice is the zero-emission transition’s driving force. Its popularity continues to grow, bolstered by a wave of smaller, cheaper electric vehicles and innovative new leasing products providing second-hand EVs. More employers are seeing the appeal and more employees – at all income levels – can make the switch.”

However, the journey is not without its challenges. Poston warned that fleets that have enthusiastically embraced the switch to zero-emission vehicles are now grappling with the harsh realities of significant vehicle depreciation. The BVRLA’s “Happy EV After” campaign aims to raise awareness of the support needed to restore confidence and stability in this essential segment of the automotive ecosystem. With the supply of used battery electric vehicles expected to surge in the coming years, the BVRLA is calling for collaboration with the government and the wider industry to create and sustain demand for these vehicles.

As we stand at a crucial juncture in the automotive landscape, the BVRLA’s findings underscore the importance of innovative financial solutions and supportive policies in driving the UK’s transition to a more sustainable future. The clear preference for electric vehicles within company fleets serves as a beacon of hope, illustrating that with the right incentives, the shift towards greener transportation is not only possible but already underway.

In conclusion, the BVRLA’s leasing fleet growth is a testament to the strides being made in the electric vehicle market, driven by the salary sacrifice scheme and Business Contract Hire arrangements. However, the clear distinction in adoption rates between company-provided vehicles and personal contracts highlights the need for continued advocacy and support to ensure that the transition to electric vehicles is equitable and accessible to all. As we move forward, it is imperative that all stakeholders work together to nurture this momentum and solidify the foundation for a sustainable automotive future.

Share this:

Similar Posts