A dramatic uplift in demand for electric vehicles has contributed to the British Vehicle Rental & Leasing Association's (BVRLA) leasing fleet surpassing its pre-pandemic volumes, defying a gloomy economic landscape. The association’s latest Leasing Outlook Survey presents data to the end of 2022, reporting a 0.3% growth in the total fleet despite vehicle supply issues continuing to impact availability.
Growth was driven by the continued resurgence of Business Contract Hire, up 4.0% year on year thanks largely to the long-term clarity provided on electric company car tax rates. That clarity – which saw future rates protected last November following the association’s #SeeTheBenefit campaign – has contributed to electric vehicles becoming the dominant force on the fleet. 53% of new BCH car additions were Battery Electric Vehicles.
This continued shift has again resulted in the cleanest, greenest BVRLA leasing fleet ever. Average car emissions have improved 16% in the last five years and are down to 95.6g/km.
BVRLA chief executive, Gerry Keaney (pictured), said: “On the backdrop of an incredibly turbulent year, we are again reporting growth. As we face inflationary cost pressures, high interest rates and global uncertainty, it is vehicle supply that is pulling up the handbrake. A favourable tax regime coupled with the agility of our sector is creating demand for vehicles unlike anything we’ve seen. Supply simply must catch up.”
For the van market, diesel remains the preferred fuel type, although work is continuing by the BVRLA and its members to support the transition to zero emission vehicles. Vans have led the growth of used vehicle leasing, as leasing companies find innovative ways to overcome vehicle supply issues and flatten any RV risks associated with new technologies. From a low base, used van leasing has grown 123%, demonstrating the high demand and potential opportunity. Longer initial lease periods are also becoming more popular due to the reliability of electric vehicles, allowing those with tighter budgets to transition.
“New business models and changing usage patterns are demonstrating the adaptability of the sector. The data paints a picture of innovation, resilience, and an unwavering commitment to keep people mobile. To surpass pre-pandemic levels is a crucial milestone and enables us to look forward with optimism.”