What is the Likelihood of EV Leasing for Fleets?
As with any new technology, electric vehicles have heads turning and interest worldwide piqued. But many may not have the budget to outright purchase enough EVs to electrify their fleet, or on the flipside, would rather test it out before they buy. The question is, will we see a massive amount of leasing options available for fleets looking to dip their toes in before the full jump?
The Benefits of Leasing New Technology – and Not Just Electric Vehicles
Leasing fleets assets rather than a large purchase can be beneficial to fleets for a variety of reasons. For some, it may be that more real-world data is required before they fully take the plunge and spend a large portion of their operating budget on upgraded assets.
The thing is, fleets need to do a thorough reflection to answer whether or not electric vehicles are actually viable for their fleet. Product lines from OEMs continue to grow every year, and as new battery technology for longer ranges is brought forward, you’ll have a lot of fleet managers chomping at the bit to get their hands on this new technology. But as time goes forward, it’s worth determining what the benefits and potential negative are for integrating EVs into their asset mix. And perhaps, leasing might just be the answer.
It’s thought that the preferred way to buy into the EV market will rely heavily on the leasing of new vehicles, though many have already bought into the new technology. This thinking is potentially due to two reasons. The first is that leasing will allow fleets to change up their asset mix more frequently without the need to commit to a long-term technology purchase. This can be especially helpful as new technology updates are rapidly introduced to the mainstream market as this side of vehicle manufacturing expands. The second reason is that electric vehicles are thought to depreciate faster than their ICE counterparts – and leasing allows fleets to avoid the potential problem of low resale value and capital lost.
But whilst leasing electric vehicles could have the potential to be helpful for fleets – it’s important to note that not all fleets will be on board with this, and the same goes for the manufacturers as well.
Are Manufacturers on Board?
The short answer, manufacturers will always prefer fleets to purchase new vehicle technology rather than sign a short-term lease. But, with many consumers and fleets alike looking to lease before they buy – will that be enough to change their minds?
OEMs are beginning to poise themselves as lessors to consumers (whether than be directly to drivers on the road like you and me, or it be large fleets that operate in various regions around the world). The production scale of both vehicles and the battery technology within them has gradually reduced over the last three years, making for larger profit margins on this technology as well as making EVs a more viable option for OEMs to adopt a leasing strategy rather than relying only on purchases made by fleets and end users.
So, to give you a straight answer – it’s still a little bit up in the air. Many still carry a preference for purchase, though the benefits to adopting a leasing strategy are beginning to slowly shine through.
Is Your Organization Looking to Add Electric Vehicles to Your Fleet?
Electric vehicles are an emerging technology coming alongside plenty of potential enhancements for fleet operations and sustainability initiatives. But, like with any new technology, it’s important to understand your fleet and it’s data by doing a deep, analytical dive to determine whether or not electric vehicles are suited to your organization and region of operation.
Over the last few years, Utilimarc has been working with electric vehicle data with the aim to help fleets understand their options and their data when considering new vehicle additions for their organizations in the future.
If you’re interested in learning more about how Utilimarc can help you make the most of your electric vehicle data, schedule a live demo with our analytics team.