Will electric vehicle financing grow?
The number of Electric Vehicles in existence, not to mention being financed, is on the rise worldwide. In fact, the UK Government last year vocalized its demands to bring more Electric Vehicles to roads nationwide.
Back in 2018, ministers called for more Electric Vehicles (EVs). In line with the mission to create a cleaner, greener Britain, and to “protect and renew our natural inheritance for the next generation” (Theresa May), Ministers were warned that three-fifths of new cars should be electric by 2030 to meet ambitious new greenhouse gas targets.
Unfortunately, Britain’s motor industry has been falling behind for years – and we’re not doing well in the electric car race worldwide. According to the Financial Times, Britain is battling to keep up with global rivals. While EV sales are on the rise, they still account for less than 1% of the UK’s total vehicle fleet, according to Green-Alliance.org.uk.
It’s not all bad news though, and Britain has enjoyed some battery-operated success. Just look at the Nissan Leaf – which Britain proudly builds – Europe’s best-selling electric car. Aston Martin also recently announced good news, with the goal of producing batteries for the UK’s luxury Lagonda cars. In January, Jaguar Land Rover announced its investment into a Hams Hall battery site set to produce hybrid and purely electric car systems.
All of this is just the beginning. A Government inventive will see the launch of a Coventry-based innovation centre, partly funded by Government money (£80m of it). The centre is set to help businesses nurture their electric technology and watch it grow from research to production phase.
Unfortunately, Brexit delayed the recent launch. However, plans are still in motion to launch the centre soon, along with the Government’s industrial strategy to attract multiple electric investments, starting with £246m in funding to attract battery-operated technology.
More good news: the UK is currently the fastest emission-cutting G7 nation.
How will electric vehicles market trends affect leasing companies?
Car financing companies all across the UK will be affected by this steady shift towards electric sooner or later. While under 5% of new car sales are “alternatively fuelled” today, this percentage is on the rise. We can expect to see the continue theme of EVs and Private Car Leasing into 2020 and beyond. Original Equipment Manufacturers (OEMs) are under pressure to shift the focus to EV leasing. According to FleetEurope.com, the global fleet leasing market was projected to rise by about 5.3% in 2018, with rising demand from operational leasing.
EV’s are slowly becoming the #1 choice for environmentally-conscious consumers looking to reduce their carbon footprint. With rising demand comes leasing as the preferred method of obtaining an EV, seeing as the cost to buy one cash would be unaffordable for many. Also, FleetEurope.com mentions that EV cars will depreciate in value faster than ICE cars, meaning customers will want to upgrade their EV models more regularly.
What’s more, leasing helps consumers avoid the negative consequences of low retail value. FleetEurope.com mentions that EV leasing, for hybrids too, was projected to grow by almost 13% in 2018. We’re now about to enter 2020, and this number is only on the rise.
According to TransportXtra.com, The UK has high hopes that 30-70% of new cars will be ultra-low emission by 2020, with the mission of completely phasing out traditional petrol and diesel cars by 2040. The Government plans to totally ban the sale of petrol and diesel car sales by this time.
Think about leasing businesses – how can they sell finance policies for something that doesn’t exist? This ban will make many leasing company obsolete, unless they get with the times.
Car leasing companies worldwide are running around like headless chickens to climb aboard the new movement, offering attractive deals to EV buyers. If you want to keep your business alive, for the next few decades and beyond, it’s critical to offer leasing options for EVs to sharpen your competitive edge and show your audience that you are a company that cares.
More than half of surveyed Brits (57%) admitted that they’d buy an EV for the right price, but something’s holding them back – and that something has a lot to do with high price tags. By offering attractive financing solutions for EVs, you can be a national hero – no cape needed – making it possible for the average Joe to own an Electric Car without going bankrupt.
You will empower Britain to overcome the most significant barriers to entry in the national EV market. Once you decide to offer financing, you can place strong emphasis on all the reasons why UK consumers should invest in an EV with you, like lower operating costs and less environmental damage.
How can Soft4Leasing help in Electric vehicles lease management?
If you’re searching for the best way to manage and control your Electric Vehicles leases, look no further than Soft4Leasing. With us, you can build a separate portfolio for EV leasing, empowering you to analyse what percentage of your business consists of EV leasing. Based on the trusted Microsoft Dynamics 365 Business Central Platform, Soft4Leasing allows for faster system launch, while empowering you to improve your business from the inside out.
With Soft4Leasing, you can seamlessly merge with the nationwide EV movement with a system that allows you to manage the entire leasing process from one place. From quote to contract to reporting, and even contract termination, Soft4Leasing lets you manage everything under one roof.