Business Lease Popularity for Battery Electric Vehicles (BEVs) Surpasses Diesel and Petrol Combined
In a groundbreaking turn of events, battery electric vehicles (BEVs) have emerged as the most popular choice for business leasing at Leasing.com. This historic milestone marks the first time that BEVs have outperformed both diesel and petrol vehicles combined on the car leasing comparison site. The data for the third quarter of 2023 clearly illustrates the growing demand for BEVs, with these vehicles accounting for nearly half (49%) of all business enquiries.
The increase in popularity of BEVs is a promising sign for the electric vehicle market, as it indicates that businesses are ready to embrace sustainable transportation solutions in their quest to drive towards achieving net zero emissions. Furthermore, this shift towards electric vehicles is not only driven by environmental concerns but is also motivated by the attractive tax incentives offered to businesses opting for low-emission vehicles.
The sales enquiry data from Leasing.com also reveals that the overall demand for electric vehicles, encompassing hybrid, plug-in hybrid, and full electric cars, witnessed a significant increase of 8% compared to the same period in the previous year. This surge catapulted all EVs to capture a remarkable 60% of all enquiries related to Business Contract Hire (BCH) – the highest proportion ever recorded. Such positive growth trends indicate that the momentum for electric vehicles is steadily gaining traction among businesses.
Conversely, the allure of petrol cars is gaining traction among personal contract hire (PCH) drivers, as the popularity of BEVs wanes in this particular segment of the market. Leasing.com’s Q3 data reveals that petrol vehicles accounted for a substantial 73% of all PCH enquiries, experiencing an 8% surge in demand compared to Q3 2022. The Nissan Qashqai, Volkswagen T-Roc, and Volkswagen Golf emerged as the three most sought-after vehicles for PCH during this period.
In contrast, battery electric vehicles experienced a slight dip in consumer demand, with PCH lease enquiries dropping by 2% compared to the same quarter last year. BEVs accounted for only 11% of all PCH enquiries between July and September of 2023. These trends mirror the wider industry landscape, as the Society of Motor Manufacturers and Traders (SMMT) warns that the surge in BEV sales is primarily driven by fleet and business adoption, where environmental benefits and tax incentives play a pivotal role.
However, the same incentives that attract businesses to electric vehicles do not extend as convincingly to private drivers. The discontinuation of the Plug-in Car Grant, coupled with the prevailing high-inflationary environment, renders many BEVs unaffordable for private motorists. Despite the expanding range of electric vehicles available from manufacturers, the lack of financial incentives poses a significant barrier, hindering the uptake of BEVs among private drivers.
Another alarming trend observed in the leasing market is the declining interest in diesel vehicles. Diesel leasing agreements witnessed a severe downturn, plummeting by 40% in Q3 2023, representing a mere 3% of total PCH enquiries. This decline aligns with the general shift away from diesel vehicles due to their environmental impact and stricter emission regulations.
Paul Harrison, the Chief Partnership Officer at Leasing.com, emphasizes the importance of incentives to encourage private drivers to adopt electric vehicles. He highlights that the Q3 data indicates a growing preference among private motorists for more affordable petrol vehicles, in stark contrast to the significant surge in BEV demand witnessed in 2022. The ongoing cost-of-living crisis, combined with increased rentals, presents a formidable barrier to the widespread adoption of BEVs in the new car market this year.
With the implementation of the zero emission vehicle mandate on the horizon, this trend raises concerns for motor manufacturers. It is imperative for the government to collaborate with the automotive industry to design a comprehensive package of measures that incentivize the uptake of electric vehicles, particularly in light of the slow economic recovery forecasted. Such collaborative efforts are essential to drive the transition towards sustainable and zero-emission transportation, ultimately contributing to the achievement of long-term environmental goals.
As the popularity of battery electric vehicles surges among businesses, it is an encouraging sign that the shift to sustainable transportation is gaining momentum. The dominance of BEVs in business leasing showcases the growing recognition of their environmental benefits and the financial advantages accompanying their adoption. However, the challenges faced by private drivers in affording electric vehicles underscore the need for targeted incentives and support measures. Only through collaborative efforts between the government and the automotive industry can we realize the vision of a greener future driven by electric vehicles.