A 'mismatch between market forces for new and used EVs' is at the heart of the issue, as the popularity of new electric car leases is not being met by equally strong used EV demand.
Dramatic depreciation of electric vehicles has created a 'car leasing crisis' that threatens to push monthly costs higher for customers and force them to run older battery models with shorter ranges, experts warn.
For motorists using popular tax-advantaged salary sacrifice schemes, the value of the vehicle 'perk' is diminished, as they could be forced to drive older vehicles instead of upgrading to newer EVs with the latest technology that can travel longer distance on a single charge. Auto Data Solutions - a specialist automotive consultancy firm - says that a 'multiple of factors have been converging' to create the crisis, which are all linked to low demand for used EVs.
And there are are also major concerns about predicted future values of EVs, which are 'falling short of current forecasts'. It says this is 'leaving the industry to explore ways to generate as much revenue as possible from existing assets through lease extensions or offering used EV leasing as a service'.
Manufacturers will also be affected by any reduction in demand for new products due to lease extensions. 'That means extending existing contracts wherever possible, to maintain revenue, and also re-leasing ex-contract vehicles rather than send them back into the market.'
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