UK: EV residual values cause CAP concern
Uncertainty over the performance of electric vehicles means reliable future residual value forecasting is currently impossible, industry specialist CAP said.
CAP specialises in predicting future values for UK fleet and leasing companies, rental car operators and dealers. It said one major issue was battery replacement costs threatening to render commercial electric vehicles, in particular, worthless after warranties expire.
It added that many questions must be answered before end users can make fully informed choices. Contract hire or leasing operators and funders would also need substantially more information before they could clearly understand their risk position.
CAP is investigating the burgeoning electric vehicle sector to determine the future intentions of manufacturers bringing all electric models to market.
Communications manager Mike Hind said: “One of the problems of this sector at the moment is the diversity of approaches being taken by manufacturers.
“Our customers are asking for clear information to enable them to plan their future vehicle mix strategies but there is still very little confirmed information from manufacturers around crucial questions such as battery finance options, battery life, anticipated replacement costs, charging systems and overall running costs.
“This means we are unable to realistically offer a view on future residual values and only when those questions are answered will we be able to do so. For example, with some battery replacement costs [expected] to approach the GBP10,000 (US$15,000) mark it currently seems unlikely that a high mileage commercial vehicle, in particular, approaching the end of its warranty period will have any residual value at all.
“We are speaking to all manufacturers involved so we can definitively address these questions as soon as possible. This is necessary to enable potential owners, operators and funders to understand their future risk position and where all electric vehicles potentially fit into their future operations.”