EV residuals' war of words escalates
06 September 2011
The hotly debated subject of predicted values on electric vehicles has blown up into a war of words, with residual value expert Cap clashing with Azure Dynamics, the company behind the electric Ford Transit Connect, over the vehicle's RV prediction.
The spat, which occurred late last month, follows previous issues between Cap and Renault over the former's reluctance to give RVs for vehicles where the battery is leased but the vehicle is bought outright. Renault's approach to marketing its Kangoo Van ZE, and the Fluence, Zoe and Twizy cars, is to lease the battery separately to a vehicle bought outright, and Cap is refusing to give values on products where the power source is separated. It will, though, offer a coding for the vehicle to allow it to be entered on to systems that use Cap's data. The view is at odds with EurotaxGlass's, which is predicting better whole-life costs for EVs with a leased battery. It predicted the new Nissan Leaf, with battery included in the purchase price, would retain 35% of its value at three years and 36,000 miles, whereas a similar EV with a leased battery would retain 54%.
The latest row came after Cap gave the Azure Dynamics Transit Connect a predicted 20% retained value at three years and 30,000 miles, equating to £8000 of the £39,999 list price retained, describing the commercial viability of electric vans as "fraught with uncertainty". The firm also said there is a "risk to an end-user of having to spend thousands of pounds additionally on a replacement battery pack for a five- to 10-year old vehicle".
Azure hit back strongly, with European sales and marketing director Gary Whittam particularly critical over the speculation about battery replacement, as Cap doesn't penalise diesel vehicles the cost of a new engine. "They don't take the manufacturer's word that the battery will last as long as they say it will," Whittam told BusinessCar sister title What Van? He also said quoting a three-year/30,000-mile value was deceptive as the vehicles need to be on fleet for longer to repay the initial outlay. According to Whittam, 88% of an electric van's running cost is the initial purchase price, and for a diesel van the figure is only around 25%.
The response from Cap Monitor CV editor Tim Cattlin said its position is that "the life of the battery remains an area of uncertainty for the future purchaser and that, in our opinion, this will mean a cautious view on battery performance by the trade until a clear track record has been established". He also claimed that extending the cycles to six years would leave the cost of running an Azure Connect EV at £39,000, compared with £33,066 for the equivalent diesel Connect.
"Cap will, of course, maintain an close eye on the actual performance of these vehicles, and clearly forecasts will be adjusted on the basis of all the evidence available," said Cattlin. "At present the evidence continues to suggest future trade caution, which will be manifested.by conservative prices offered in tomorrow's used market."
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