Leasing sector bears the brunt of EV price crash as business uptake surges

The British Vehicle Rental and Leasing Association (BVRLA) has issued a stark warning in its latest Road to Zero report: the sharp decline in used electric vehicle (EV) values is costing the leasing sector hundreds of millions of pounds, potentially jeopardising the UK’s broader net-zero ambitions.

Between January 2023 and October 2024, average used battery electric vehicle (BEV) prices plummeted by 43%, with overall values down nearly 46% from their 2021 peaks. By contrast, internal combustion engine (ICE) vehicles saw only a 19% drop over the same period. This disparity has left fleet and leasing companies, which form the backbone of new EV uptake, vulnerable to residual value risk on a scale the industry has never experienced.

Toby Poston, Director of Corporate Affairs at the BVRLA, described the situation as a “death by a thousand cuts,” explaining that the compounding financial impact is eroding industry confidence and forcing operators to reconsider the economic viability of EV contracts.

Despite these financial headwinds, the report also reveals a strong counter current: business leasing is still leading the charge in EV adoption. In fact, electric vehicles now account for 44% of business lease car registrations, up from 37% the previous year. For vans, electric uptake more than doubled, with battery-electric vans making up 6.6% of new business leases by the end of 2024.

This growth is driven in large part by tax-efficient initiatives such as salary sacrifice schemes, which enabled the delivery of more than 70,000 BEVs in 2024 alone. These company-led schemes make EVs financially accessible to employees who would otherwise find upfront costs prohibitive, effectively widening adoption beyond corporate fleets.

However, the imbalance between strong new EV leasing and weak used market demand is creating an unsustainable feedback loop. As more EVs come off lease and enter the second-hand market, values continue to fall, exacerbating losses for leasing companies and making future contract pricing riskier and more expensive. If left unchecked, this trend could stall the very transition that leasing helped accelerate.

The BVRLA is calling for urgent policy intervention. Among its recommendations are targeted incentives for used EV buyers, enhanced support for leasing firms absorbing financial shocks, and a reallocation of government funding to protect the full EV lifecycle, from first registration to second ownership.

The Road to Zero report makes one point abundantly clear: the UK’s net-zero transport transition cannot rely solely on new car incentives. For the market to thrive sustainably, attention must now turn to stabilising the used EV ecosystem, protecting the businesses leading the charge, and ensuring consumer confidence in every stage of vehicle ownership.