“If leasing companies electrify their fleets earlier, 18 million more households in the EU will have earlier access to cheaper EVs and save on their car spending,” claims the NGO Transport & Environment (T&E).
“At current electrification rates, 33 million households in the EU will have access to second-hand electric cars from today until 2035,” says T&E. But if the leasing sector accelerates its uptake of EVs, this would go up by 56%, up to 51 million, a new report by Transport & Environment finds. “These 18 million additional households would be saving money on their car spending,” T&E adds.
The leasing sector constitutes an important channel for cars on the used car market. Four in ten cars entering the second-hand market every year in the EU come from the leasing sector, assuming a three- or four-year leasing period,” says T&E.
If leasing companies electrify faster, they will accelerate the pace with which the second-hand market goes green. That’s why T&E calls upon Europe’s top seven leasing companies to commit to a phase-out of fossil fuel cars and to lease battery electric vehicles (BEVs) only as of 2028. The sector as a whole should do this by 2030.
Today, almost eight out of ten EU citizens buy their cars second-hand. Around 90% of low and middle-income groups buy their cars on the used car market. Even among higher-income groups, the percentage is still significant (62%).
Second-hand EVs cost less
A second-hand battery electric vehicle has much lower ownership costs than a used gasoline car, a study by consumer group BEUC has found. Households can save almost €6 000 over seven years by going electric rather than buying gasoline. “That’s why a steady influx of electric cars on the second-hand market is so important for European families looking to save costs,” T&E insists.
“The mass influx of affordable electric cars on the second-hand market is possible… and leasing companies hold the keys to this. If they go green faster, European families will go green for a smaller cost,” says T&E’s Stef Cornelis. “It’s no understatement to say that leasing companies can accelerate and democratize the electric car. Their duty is both environmental and social,” he concludes.
Reluctant lease sector
If the leasing sector starts leading instead of following the market in terms of uptake of battery electric cars, this could bring 18 million more second-hand BEVs on the market.
More importantly, 8 million of these cars would cost €10 000 or less to buy, which is the average price low- and middle-income households pay today for a used car, according to the BEUC study.
However, T&E research has shown that leasing companies are not moving fast enough to transition to electric cars despite claims of green leadership.
For example, not one of Europe’s largest leasing companies has set a date to phase out fossil cars, and the uptake of battery electric vehicles is merely in line with the overall market. A T&E undercover investigation in France and Germany also finds that leasing companies’ sales staff are not always helping their customers go electric.
Special case Belgium
In Belgium, the lease sector is vital. The latest sales figures show that some two-thirds of the entire market are company cars and the tendency is still increasing.
Because the political authorities have decreed that new company cars have to be electric in 2026, there’s a chance that the reluctancy of the individual buyer for EVs, also playing a significant role in the Belux for now, will disappear as more and more interesting and more affordable second-hand cars arrive on the market.
In a market turning around 450 000 new cars every year, this means that by 2030, some 300 000 EVs will arrive yearly on the second-hand market, undoubtedly accelerating the electrification process in the Belux market.
And, of course, the political decision has made the leasing sector in Belgium and Luxembourg become enthusiastic lovers of the energy transition. That is illustrated by the record increase (+143%) compared to other EU countries of EVs lately in the Belux.
Note that PHEVs are also more popular in the Belux than in most other countries. Still, the interest in those cars will undoubtedly diminish as the tax advantages dwindle and the 2026 obligation for pure EVs comes closer.