Bottom Line Up Front
The UK leasing market is taking five‑figure losses on electric company cars as rapid depreciation and weak used‑EV demand bite into profit margins.
Rental Sector Faces Five‑Figure Losses as EV Company Cars Surge
Image: Rental Sector Faces Five‑Figure Losses as EV Company Cars Surge – Performance Comparison and Specifications
Design & Looks – How the EV Fleet is Shaping Up
Almost half of all leased company cars are now electric, thanks to cheap benefit‑in‑kind (BIK) tax and salary‑sacrifice schemes. New brands are flooding the market, offering sleek designs that appeal to both businesses and employees. However, the rush to stock electric models has led to heavy discounting, with manufacturers trimming prices to hit government sales targets.
Performance & Mileage – The Hidden Costs
While EVs boast lower running costs, their residual values are falling fast. The SMMT predicts average discounts of £11,000 per vehicle by 2025. Lease contracts now include maintenance for 65% of new business hires, but EVs still need pricey tyre replacements and higher recovery costs if something goes wrong. Salary‑sacrifice fleets, which are 83% electric, are especially vulnerable to the upcoming eVED (pay‑per‑mile) tax.
Price & Rivals – What the Numbers Say
Leasing firms report five‑figure losses on many EVs. Business contract hire (BCH) grew 7.9% to 936,352 cars, but personal contract hire (PCH) fell 3.7% to 237,111. Salary‑sacrifice deals more than doubled, reaching 209,119 cars, because they let drivers use pre‑tax wages and enjoy lower tax rates.
Typical EV Lease Specs
| Engine | Mileage | Price | Top Features |
|---|---|---|---|
| Electric Motor (Leaf) | 150‑200 mi (WLTP) | £299 / mo |
|
| Dual Motor (Model 3) | 300‑350 mi | £449 / mo |
|
| Single Motor (ID.4) | 250‑275 mi | £379 / mo |
|
FAQ
What is causing five‑figure losses on electric leases?
Rapid depreciation, large discounts on new EVs, and a sluggish used‑EV market are driving losses.
Are salary‑sacrifice EV deals cheaper than traditional personal contract hires?
Yes, because they use pre‑tax wages and benefit from lower BIK rates, making monthly payments lower for many drivers.
Will the upcoming eVED tax hurt the used‑EV market?
Experts warn it could reduce demand for used electric cars, further pressuring residual values.
What do you think about the current EV leasing climate? Leave a comment below.
Source: Read Official News
