Written evidence from British Vehicle Rental & Leasing Association (ELV0054)

House of Lords Inquiry: Electric Vehicles

BVRLA response

British Vehicle Rental and Leasing Association (BVRLA) members represent the demand-side of the automotive industry, buying around 50% of new vehicles, including over 80% of those manufactured and sold in the UK. In doing so, they support almost 500,000 jobs, add £7.6bn in tax revenues and contribute £49bn to the UK economy each year.

BVRLA members provide the cleanest and youngest vehicles on the UK’s roads and are fundamental to the transition to zero-emission transport.

Government approaches

Obstacles to the 2030/2035 phase-out dates (Q1)

1.              The main obstacles are affordability, ease of charging and the supply of fit for purpose product – this is a particular concern in the van market, where the range and capability of zero emission vans does not compare favourably with the diesel product on the market.

2.              Negative press around electric vehicle performance, costs and charging infrastructure is adding to consumer concerns and making people think twice about when and if they should make the switch.

3.              This anxiety is further compounded by delays to major policy announcements including the Zero Emission Vehicle (ZEV) mandate, and the perception of Government disunity on its scope and timeline.

Are the phase out dates realistic and achievable? (Q1)

4.              BVRLA members are committed to making the transition work and supporting their customers on the journey, with the fleet and business sector responsible for most EV sales - around 70%.

5.              There has been strong growth in the business leasing market – driven by low benefit in kind (BiK) rates for EVs, which are locked in till 2028. As of Q1 2023 49% of new company cars and 91% of new salary sacrifice vehicles were ZEV.  

6.              Demand for personal leasing has been strong and is ahead of the wider retail market with 19% of new additions being EV. However, a slow-down has been noted with quarter-to-quarter EV demand from private motorists falling for the first-time in Q1 2023.

7.              The demand for ZEVs within leasing have not been matched by the rental sector. Without incentives, rental firms are not seeing users willing to pay more for what they perceive to be a more difficult product to operate.  This is shown by lower levels of utilisation for ZEVs compared with the internal combustion engine (ICE) fleet - 62% ZEV v 81% ICE cars and 76% ZEV v 90% ICE vans. Demand from users for ZEV rentals is weak and until this grows rental firms won’t be able to grow their ZEV fleets.

8.              Demand for, and the utilisation of ZEV vans is a particular challenge due to issues with cost, range and functionality when compared to diesel. This is further compounded where 4.25t e-vans are treated inconsistently - sometimes as an HGV and other times as a traditional 3.5t van. 

9.              To ensure the phase out dates are achievable Government should:

10.               Demand

10i.              Increase support for the van transition.

10ii.               Align the operator regulations for 4.25t electric vans with those of 3.5t petrol or diesel LCVs.

10iii.              Assess fiscal interventions that secure a healthy used ZEV market and just transition.

11.              Infrastructure

11i.               Consider further public chargepoint regulation to promote fleet friendly infrastructure, bookability and roaming.

11ii.              Encourage DNOs to adopt standardised processes and timings to smooth the grid connection and upgrade process.

11iii.              Consult on including electricity in the Renewable Transport Fuel Obligation (RTFO) in the upcoming low carbon fuel strategy.

11iiii.              Reduce the VAT rate on public ZEV charging making it in line with domestic electricity.

12.               Supply

12i.              Implement a ZEV mandate review process to assess progress from an end user perspective

Development of an EV market in the UK (Q2)

13.              Setting the phase-out dates has had a positive effect. It has enabled fleets to prepare and manufacturers to put production plans in place. It has also galvanised chargepoint operators to rollout infrastructure. Setting the phase-out dates has had a positive effect. It has enabled fleets to prepare and manufacturers to put production plans in place. It has also galvanised chargepoint operators to rollout infrastructure.

The success of national policies, regulations & initiatives (Q3)

14.              Benefit in Kind - BiK is a world leading policy and the certainty out to 2028 given in the 2022 Autumn Statement has been instrumental in driving EV adoption.

15.              Financial support/grants – all the grants (Plug-in car, Plug-in van & truck, home charging, work charging) made the transition viable and have driven demand for ZEVs.

16.              Project Rapid – whilst investment in the rapid charging network is welcome, there are questions about whether this needs to be broader in scope than Motorway Service Areas alone.

17.              Local EV Infrastructure fund – this will provide much needed capital and capabilities support to local authorities as they rollout of charging infrastructure across the UK.

18.              Consumer Regulations on Charging – the forthcoming legislation will provide a better customer experience of charging but will need to be rigorously enforced and be regularly reviewed to ensure it remains fit for purpose.

19.              Cat B driving licence concession/4.25t derogation – this can unlock the mass market for several key vehicle types. Government needs to equivalise treatment of a 4.25t e-van with a 3.5t diesel.  

The role for clearer communication of the case for EVs from Government (Q4)

20.              Positive communication about EVs is critical to drive demand and overcome concerns being raised by consumers. Current communications about EVs is poor and lacks consistency.

21.               There is merit in Government commissioning a communications campaign and appointing an independent and trusted body, such as the Energy Saving Trust, to drive consistency.

22.               The Government could also consider empowering the Advertising Standards Authority to take a more active role in EV communications.

The accuracy of information in the public domain relating to EVs and their usage (Q5)

23.               Consumers need to understand factors such as, the range capability of the EV, charging times and the capability of the vehicle to charge rapidly or ultra rapidly. Currently messaging is confused.


Targeting unpredictable costs (Q7)

24.              Fluctuating energy costs – prices will always fluctuate but Government intervention could secure a low-cost charging network by equalising VAT and including electricity in the RTFO.

25.               Road pricing and taxes – this is in Government’s control. They must consult early on any road tax changes so that consumers know what to expect and can prepare. 

26.               Low emission zones – Government has a role to provide the structure for these, if they are to happen, we need communication that enables people to prepare and a simple mechanism to pay.


EV Market and Acquiring an EV

Main routes to acquiring an EV – which are working well, and which could be improved? (Q8)

27.               The routes to acquiring an EV are as follows:

28.              Buying new – mostly financed through Personal Contract Purchase. This channel has slumped.

29.              Buying used – usually purchased outright or financed through hire purchase/personal loans. Demand is not matching supply for used EVs.

30.              Business lease (new) – company cars and salary sacrifice. Major growth and responsible for most EV registrations.

31.              Personal lease (new) – via Personal Contract Hire. Demand ahead of other finance types but                             slowing.

32.              Used leasing – area of innovation for leasecos. Expect strong growth in coming years.

33.              Renting an EV – for leisure, business or as insurance replacement. Very limited user demand.  

34.              Using an EV car club – often more urban. Seeing demand but small scale (6,000 cars, 12% ZEV).

35.              EV subscriptions – monthly fee for car, charging, insurance and maintenance. Niche.

Main consumer barriers to acquiring an EV through purchase, lease or other route (Q9)

36.               Cost – these products are too expensive for the majority of consumers. For every channel except company cars and salary sacrifice there is a price premium.

37.              Perception – negative press and a lack of understanding of EVs is hampering demand.

Government support for affordable and accessible EVs (Q10)

38.               BiK – has been instrumental in reducing the price of an EV through company car and salary sacrifice     schemes. 

39.              Local EV Infrastructure fund – will secure cost effective charging options for those unable to charge at home.

40.               Project Rapid – will provide destination charging at MSAs but to ensure accessibility may need to be broader in scope to include transport hubs.

41.              Chargepoint grants (workplace and home for renters) –helps cover the cost of installing chargepoints.

The range of EVs in the UK (Q11)

42.              The one area BVRLA members flag as having an insufficient range of products is the van market. Only 18% of e-vans on the market have a range of over 200 miles[1]. This is viewed by industry as a base level requirement for mass market use. Similarly, only 6% can charge to 200 miles in 30 minutes, again a base need that compares to 61% of cars.

The second-hand EV market & the relationship with EV leasing (Questions 13, 14, 15)

43.              There are clear signs that the used market for EVs is not doing that well. Whilst interest in used EVs is growing, supply is vastly outstripping demand and there no clear signs of this improving.

44.              The increased supply is largely due to cars taken as company cars and salary sacrifice around three years ago, which is the typical term of a lease. As these schemes continue to grow in popularity so too will the volume of used EVs coming to the second-hand market. The ZEV mandate could also increase nearly new used flows as rental companies are encouraged to take a larger proportion of EVs from manufacturers as part of their supply agreements.

45.              Leasing is driving the uptake in the new market, but the cost of a finance or leasing (new) depends on how well a car holds its value in the used market. An upfront price premium for new EVs, while used EVs drop to price parity or below, makes new EV financing unaffordable.

46.              Without affordable EVs at front end we will never achieve a transition. We need to see levels of demand in the used market that sustains more stable depreciation in ZEVs. This may require fiscal intervention from Government.  


Value and role of alternative transport models (Q16)

47.              Shared mobility, car clubs and rental have a key role to play in the decarbonisation of road transport through behaviour change.

48.              The BVRLA welcomed the Government’s proposal to award additional credits to manufacturers supplying vehicles to car clubs through the ZEV mandate but questioned whether car clubs alone are large enough to stimulate the supply of vehicles into shared mobility.

49.              Rental and car club vehicles are at their core a very similar shared mobility offering. They demonstrate similar behavioural change and CO2 benefits. Both tend to get overlooked by policymakers as routes to decarbonise UK road transport. There must be support for rental and car clubs to help consumers give up privately owned vehicles and move towards using alternative transport models.

50.              There are two areas where Government support would be welcome:

50i.               Mobility Credits - the inclusion of rental has proved successful as part of a mobility credit trial in the West Midlands and more recently as part of the Ultra Low Emission Zones extension scrappage scheme. This involves consumers being given credits - or cash in London - when they scrap their vehicle, which can be redeemed against public transport and shared mobility options. This has significant benefits in driving behaviour change and should be supported in other parts of the UK.

50ii.               Grey fleet – this is where vehicles are used in business settings rather than employees using their own privately owned vehicles (grey fleet) which tend to be older and more polluting.

The issue with grey fleet, is that organisations that rely on it are abdicating any responsibility and have no pressure to move to zero emissions. Likewise, Government is not offering any incentives or disincentives for people using their private vehicle for work journeys. In fact, they are under pressure to increase the Approved Mileage Allowance Payments (AMAPs) rate to 60ppm, which would end up making it more attractive for workers to use their older, more polluting vehicle for work trips.

Government could lead by example by developing policies that encourage employers to take responsibility for managing all business-related travel, with a focus on using sustainable modes where possible. 


Experience of using an EV

Challenges UK consumers face in their use of EVs (Q18) / Charging infrastructure for EVs (Q21)

51.              The main challenges relate to charging. Whilst we have seen chargepoint numbers grow and consumer experience improve, there is still more that needs to be done for many fleets reliant on the public charging network.

52.              This is a particular issue for van drivers who often cannot access chargepoints, cannot book them to ensure access or even pay easily through fuel card equivalents.

53.              Another key challenge is where fleet operators are looking to install infrastructure at their own sites/depots. The process to obtain the power can often take over a year and can run into millions of pounds.

54.              The BVRLA has been working with local authorities as they rollout charging across their communities to think about fleet users. Government needs to keep pressure on CPOs, through regulation and enforcement, to do the same.

Benefits consumers could realise from using an EV (Q19)

55.              There are many benefits from using an EV – ranging from having a more pleasant driving experience, through to saving or even making money through smart charging and vehicle to grid.

Preparedness of dealerships, service networks, repairs/maintenance/breakdown and aftermarket (Q20)

56.              Whilst there are currently enough trained technicians to service and repair EVs, there are regional shortfalls.

Public Charge Point Regulations (Q22, Q23)

57.              The legislation is welcome but needs to keep under review to ensure good practice across the charging industry. Of particular concern is:

57i.              How the reliability standards will ensure certain chargepoints do not get neglected, particularly, in rural areas or van/disabled accessible.

57ii.               The current two-year timeline for Government intervention in roaming and whether this will be too late to support fleet’s ability to pay by an EV fuelcard.

57iii.               Whether open data will provide information on chargepoints that can be booked and if they are disabled or van accessible.

National and regional issues

Role of the Distribution Network Operators (DNOs) (Q30)

58.              One of the key challenges members face when engaging with DNOs is an inconsistent approach by each of the DNOs, for example some will allow bulk applications for sites in an area whilst others do not. There are issues finding where support and guidance is available and having this in a format that can be easily understood by someone from outside of the energy sector.

59.               Often DNOs want to understand what the energy demand of businesses will be in order for them to assess where capacity is best placed and to help them plan ahead. This can be a challenge for many fleet operators who do not fully understand the process or why certain information is being requested.

60.              Common forms for the application process which clearly explain what is needed, why and how this will help the application/energy supply in the long run would be helpful. This would minimise delays by ensuring that people understand what information is being requested and why.

61.              We urge the Government to encourage DNOs to adopt standardised processes and timings to smooth the grid connection and upgrade process.

Local authorities (LAs) role (Q33)

62.              The BVRLA’s main interaction with local authorities has been on the rollout of local charging and how we can best ensure this meets fleet user’s needs. The BVRLA has published a series of documents to support local authorities when rolling out charging infrastructure in their communities with a request that they think about fleet users and how their needs can be met.

63.              One of the main issues facing local authorities has been resource. The LEVI capability fund and LEVI support body will provide much needed support to LAs.

64.              The BVRLA is keen to do all it can to support LAs and share knowledge to support the LA to better meet the needs of all local users, including fleets. In our recently published a Fleet Friendly Charging Pledge we provide useful tips that LAs can take when considering the needs of fleet users.  We would welcome Government support in promoting the pledge and encouraging LAs to sign up.

International perspectives

Learnings from other countries (Q34)

65.              It is important for the UK to benchmark its progress against others and to see how other countries have managed to overcome some of the barriers still being experienced.

66.              A great example of how others have learnt from the UK is through the UK’s approach to BiK – which is now being developed in Australia.



About the BVRLA

The BVRLA represents over 1,000 companies engaged in vehicle rental, leasing and fleet management. Our membership is responsible for a combined fleet of four million cars, vans, and trucks – one-in-ten of all vehicles on UK roads.

BVRLA members represent the demand-side of the automotive industry, buying around 50% of new vehicles, including over 80% of those manufactured and sold in the UK. In doing so, they support almost 500,000 jobs, add £7.6bn in tax revenues and contribute £49bn to the UK economy each year.

Together with our members, the association works with policymakers, public sector agencies, regulators, and other key stakeholders to ensure that road transport delivers environmental, social, and economic benefits to everyone. BVRLA members are leading the charge to decarbonise road transport and are set to register 400,000 new battery electric cars and vans per year by 2025.

BVRLA membership provides customers with the reassurance that the company they are dealing with adheres to the highest standards of professionalism and fairness.

The association achieves this by reinforcing industry standards and regulatory compliance via its mandatory Codes of Conduct, inspection regime, government-approved Alternative Dispute Resolution service and an extensive range of learning and development programmes.

[1] BVRLA’s Road to Zero Report Card 2023