Automotive News Europe — 2023-11-22
Automotive Industry
Over the past few weeks, the spotlight have been shining on the leasing sector for being the sleeping giants of electrification.
The reality is that across many of Europe's top markets, this influential sector is lagging behind and lacking leadership to put the sector on an ambitious electrification pathway.
But the UK is a significant outlier that bucks this trend.
The UK's leasing market is not just slightly ahead of its European neighbors - it's bolting
ahead. More than 40% of new registrations in the UK leasing channel are now battery-electric vehicles (BEVs). Compare this with 10% in France, less than 4% in Italy and just a little more than 3% in Spain.
Only the leasing channels in the Netherlands and Belgium get anywhere close to the UK's level.
So, why is the UK so far ahead? The simple answer is leadership -- both political and corporate.
Despite UK Prime Minister Rishi Sunak recently U-turning on the phase out date for new gasoline and diesel vehicles, the direction of travel on Battery electric vehicles has been set for a long time, a road now essentially confirmed by the recent announcement of the Zero Emission Vehicle mandate that will set manufacturers annual targets to eventually meet 100% ZEV sales by 2035.
Crucially for the corporate market, the UK government's changes to Benefit-in-Kind tax in 2020, which cut the rates of tax on zero-emission cars to zero, meant that it's become a no-brainer for company car drivers and people accessing salary sacrifice schemes to switch to BEVs.
The UK leasing industry isn't just riding the wave of government policy, it's helping to shape it. The UK's leasing association, the BVRLA, and its members played a crucial role in having low Benefit-in-Kind rates for Battery electric vehicles extended out to 2028 through its #SeeTheBenefit campaign, meaning the electrification of the corporate channel will continue to go from strength to strength.
Wider advocacy efforts from the sector around fleet-friendly charging infrastructure, addressing electrification in the van market and strengthening support for the used Battery electric vehicle market shows the leasing industry in the UK is playing an active advocacy role that isn't being as clearly replicated in other countries.
While the giants of the EU landscape have yet to commit to going fully electric, several UK leasing companies have committed to switching their fleets to EVs by 2030 through the EV100 campaign. While there needs to be, both in the UK and in the EU, more ambition and commitments to 100% BEV registrations from 2028, there is clear buy-in from the UK's leasing industry on the switch to BEVs.
The UK's leadership should be a model for other countries to follow. With a combination of good tax policy and active engagement from the leasing sector, the UK has shown how much can be achieved in such a short period of time.
The leasing industry across Europe should follow this example by setting bold commitments in transitioning to BEVs and pushing national governments to set the policy conditions to enable the sector to charge ahead of the rest of the market and help the wider transition on its way.
This opinion piece does not necessarily reflect the views of ECG