The UK Government has recognised the impact of falling used battery-electric-vehicle (BEV) values on the vehicle leasing industry and pledged to work with the sector to address concerns.
Since September 2022, used BEVs have seen their depreciation rates accelerate, with residual values halving on average.
Speaking at the British Vehicle Rental and Leasing Association (BVRLA) Industry Outlook Conference, Government Transport Minister, Lilian Greenwood, highlighted the vital role of rental and leasing fleets in driving the UK's transition to zero-emission vehicles, while also ensuring a steady supply into the used-car market. She reaffirmed the Government’s commitment to phasing out the sale of new internal-combustion-engined cars by 2030.
Lilian Greenwood, Minister for the Future of Roads at the DoT
Greenwood acknowledged the challenges posed by the Zero Emission Vehicle (ZEV) mandate and stressed the importance of balancing environmental goals with economic growth. To boost consumer demand for EVs, the Government has extended the plug-in van grant until March 2026, with £120 million in additional funding available. Favourable benefit-in-kind tax rates for zero-emission vehicles have also been extended to 2030, providing long-term certainty for businesses and taxpayers.
However, Greenwood noted that falling residual values for used BEVs, driven by increased competition and price cuts in the new car market, are challenging the leasing sector. Pre-tax profits for the UK’s top 50 leasing companies fell by nearly a third in 2023, primarily due to the collapse in used BEV values.
On electric vans, Greenwood reiterated the Government’s commitment to improving adoption rates through grants, regulatory reviews and expanded charging infrastructure. She emphasised the need for continued partnership with the industry to achieve shared zero-emission goals.