We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive all cookies on the Business Car website. However, if you would like to, you can change your cookies at any time
The start point for the best source of fleet information |
The hybrid and alternative-fuel market is still in its infancy, but the pace of growth is starting to ramp up, with registrations of ultra-low emission vehicles hitting 12,000 units between January and May this year, and rapid growth predicted for the rest of the year.
The low CO2 and running cost benefits of alternative-fuel vehicles bring taxation benefits to fleets, so as more and more firms move to increasing the percentage of ULEVs on their choice lists, the more vehicles start filtering through to the used market.
However, there are still differing levels of confidence from a residual value point of view on alternatively fuelled vehicles, which vary from mild-hybrid, to plug-in-hybrid, to full electric.
BCA handles "several hundred" alternatively fuelled vehicles through its auction halls each month, with
the majority coming from fleet and lease sources.
Simon Henstock, BCA operations director, says: "Hybrids are very much part of the remarketing fabric now. There is a steady demand for younger hybrids, although older, higher-mileage examples need to be sensibly valued to attract the buyers.
"Electric vehicles are very scarce, and tend to generate a lot of interest with buyers simply because of the rarity factor."
Despite the interest an electric vehicle generates, that doesn't necessarily translate into great prices.
Michael Simmons, Shoreham Vehicle Auctions, general manager, says: "The majority of fleet drivers are still not in the mindset for the usage and lifestyle that comes with alternatively fuelled vehicles, especially electric vehicles, so there are many variables."
He says reliability, mileage anxiety and doubts over infrastructure are still holding back EVs on the used market. However, established hybrids such as the Prius do consistently go through auctions.
"Eight-year old Prius stock going through auction inspires confidence in the lifespan of hybrid vehicles beyond four and five years old, while reflecting the growing strength of hybrid models," says Simmons. "This is due to the fact that they offer a good compromise between efficiency, range and reducing CO2 emissions, not to mention tax incentives for fleets."
According to data from Cap, established hybrids such as the Prius have seen strong results over the past two years as demand has increased in certain areas of the used market, like private hire taxis. Cap data shows that Prius values have increased by 36% over the past two years to £12,100, compared with £8875 in June 2013.
Fleets can expect mild-hybrids to remain a safer bet than a full EV or plug-in vehicle, according to Cap.
Conversely, the vehicle value firm's view is that pure EVs and plug-in hybrids will only become a mainstream alternative when vehicle range goes beyond 200 miles and consumer perception changes.
Chris Plumb, Cap Black Book Editor, says: "Electric vehicles generally still struggle when it comes to the used market as these cars still come across as expensive compared to their traditional petrol and diesel counterparts.
"Although some of the first pure-electric vehicles that hit the market are now starting to look value for money, this has come as a direct result of cars having sat on forecourts for a number of weeks or even months."
So while there's demand for hybrid vehicles on the used market, demand for pure-electric vehicles is still "patchy".
There's no doubt that electric vehicles can provide fleets with reduced running costs depending on the type of work they're expected to do.
However, residual value setters have had problems in the past with forecasting a future value when the powertrain was separately leased from the price of the vehicle, the argument being that you can't predict the future value of the car if you don't own the means with which to power it.
Manufacturers such as Renault changed tack last year and allowed customers to purchase the battery in the total cost of the purchase price, rather than leasing it separately.
Dylan Setterfield, Cap senior forecasting editor, says: "It's good to see manufacturers finally listening to common sense, with all plug-in models now available as complete asset without battery lease."
Simmons says there have not been problems at Shoreham with used values on EVs up to five years old because they are still covered by manufacturer warranty, but there is a concern for vehicles between five and 10 years old.
He says: "[For older EVs] it's largely unproven ground, although leasing companies are keeping a close eye on the future.
As Henstock explains, EVs have not yet been widely adopted by fleets in volume compared with traditionally powered vehicles, and as a result, there is not a steady supply reaching the used market: "[The lack of EV supply] makes it difficult for trade buyers and dealers to get an idea of what EVs are really worth, despite there typically being a lot of interest with buyers when examples are offered."
Buyers at BCA are cautious with hybrids, tending to focus on the best examples - typically young, low-mileage models due to the perceived worries about the reliability of the batteries on the cars as the vehicle ages.
Henstock says: "As older models reach the market, questions about longevity and even replacing the fuel cells emerge, so age and mileage is a concern."
One tip for fleets is to make sure hybrids are serviced at the correct intervals by the supplying dealer and with a complete service history as this will aid resale values, says Henstock. Fleets should also consider providing an independent mechanical condition reportbecause this will help satisfy buyers, particularly those bidding online, as to the mechanical condition.
There are a variety of factors that will continue to impact EV take-up.
He says: "People's choices are influenced by desire and taxation, and with increasing numbers of cities having existing or planned low-emission zones in place, this will be a big influence," says Simmons.
EVs also still have an acceptability problem with the general motoring public, and that is ultimately what will drive larger demand in the used market. One of the key factors for motorists is the fear of the unknown - the internal combustion engine has been around for well over 100 years, whereas EVs are perceived as relatively new (even though the concept is decades old).
Perception of range is still a major obstacle too, combined with a view of perceived difficulties in charging compared with the ease of filling up at the pump.
Most manufacturers are looking at over 200 miles of range for the next generation of EVs, but this may create another problem on the used market, rendering the current generation of electric vehicles virtually obsolete.
With no steady supply of EVs reaching the wholesale markets, it is difficult for trade buyers and dealers to get an idea of what EVs are really worth.
Steve Jackson, Glass's chief car editor, says: "A wider and easy-to-use network of charging points will help, as will the wider availability of other fuel sources and easy-to-comprehend articles aimed at developing consumer understanding."
BusinessCar magazine ©2019
Business Car Magazine © 2020 | Business Car is part of NS Media Group.
