IAN MARSON DIRECTOR OF STRATEGY, LEASEPLAN UK JUDITH EADIE ACCOUNT DIRECTOR, SCOTLAND AUTOMOTIVE LEASING 4/14/2014 THE eV MARKET IS GROWING RAPIDLY National EV/ PHEV sales targets if national target year growth rates met Global Vehicle Sales Predictions by engine/ fuel type • All geographies anticipate significant growth – and in most sales have been in line with predictions • If the trends continue there will be more than 7m eVs/PHeVs on the road by 2020 globally • eVs will start to increasingly displace ICE vehicles, but there are still obstacles to be overcome LEASEPLAN eV ACTIVITY Pre-2013 2014 Try Before you Buy 2013 Preferred leasing partner to Tesla LeasePlan will continue to innovate in this space, but for eVs to work for our PAGE 3 customers, the Whole Life cost must come down further eV GROWTH DEPENDENT ON 5 MAIN FACTORS • Vehicle Choice • Government support and incentives – Purchase Support (e.g. £5k/ £8k Grant) – In-Life incentives such as free parking or charging • Manufacturer RRP and discounting – Making the upfront unit price competitive – Confidence to support their own product • Residual Value & Resale Realisation • Charging Infrastructure Interoperability – Physical Plugs and Wires – Billing Interoperability Leasing Companies guide each customer to the most appropriate vehicle – choosing the best Whole Life Cost for each customer need is essential eV CHOICE IS IMPROVING RAPIDLY • Each customer has different needs – the better the vehicle choice, the better the fit of vehicle specification to that need • eV models choice has grown rapidly during 2013 and is accelerating further in 2014 In 2014 we anticipate over 30 models from 20 manufacturers to be available to order – this choice will only grow further GOVERNMENT SUPPORT PLAYS A KEY ROLE 2013 LeasePlan eV volumes by European Geography • The main differentials between countries in the level of eV uptake for early adopting customers, are the level of Government focus and support • In the UK, 54% of our eVs are in Scotland - where eV support is more focused in the Public Sector than elsewhere in the UK • Globally – LeasePlan owns over 1300eVs, up from 0 back in 2007 • The pattern outside of Europe is the same – Govt focus & support is key BUT SUPPORT CAN AND WILL CHANGE Company Car Tax BIK Rates 2014-19 Vehicle CO2 g/km 0 125-129 2014-15 2015-16 %BIK Rate %BIK Rate Electric Electric 0 5 Petrol Diesel Petrol Diesel 18 21 20 23 2016-17 2017-18 2018-19 %BIK Rate Electric 7 All Fuels 22 %BIK Rate Electric 9 All Fuels 24 %BIK Rate Electric 13 All Fuels 26 Source: Budget 2013, Budget 2014 New car gCO2/km: Scottish and UK average Free parking, congestion charging and other incentives can make the business case for EVs offering thousands of pound in savings but are not indefinitely certain Source: The Society of Motor Manufacturers and Traders (2014) MANUFACTURERS MUST SUPPORT THEIR PRODUCTS …TOTAL SOLUTIONS …PRICE PARITY …AND REAL LIFE TRIALS USED VEHICLE – RESIDUAL VALUES • A used vehicle is only worth what someone is willing to pay for it – this is a vehicle’s Residual Value • In 2014, LPUK will sell around 40,000 used vehicles; we also have decades of used vehicle sales models for traditional ICE vehicles allowing risk to be tightly priced – ICE RVs are more predictable • eVs carry much uncertainty on resale, its not even clear where we could sell them in volume, and then what the resale price will be – pricing this risk is very, very hard EV ICE # used vehicle sales 2014 <20 C. 40,000 Initial Purchase Cost Higher Lower Unpredictable depreciation Predictable depreciation – Lower RV – Higher RV Higher monthly cost Lower monthly cost RV Rental Effect • This uncertainty effect is seen on all new vehicle models, but is far more pronounced on eVs, meaning the risk premiums must be set higher (FCA require us as a financial institution to be prudent and not take excessive risk) IT’S NOT AS EASY AS JUST FILLING IT UP AC DC Where? Rapid Wireless right cable? right current? right chargepoint? How do I pay? GETTING THE WLC DOWN MAKING WHOLE LIFE COST OF eVs COMPETITIVE REQUIRES: • PREDICTABLE GOVERNMENT SUPPORT • MANUFACTURER CONFIDENCE & SUPPORT • CONFIDENCE AROUND RVs • INTEROPERABILITY OF CHARGING • LEASEPLAN BELIEVE IT’S AN EXCITING TIME FOR FLEETS TO GO ELECTRIC • NOT JUST BECAUSE IT’S THE “RIGHT” THING TO DO If you’d like to learn more about whole life cost and fleet finance visit: www.easiertoleaseplan.co.uk
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