Business lease popularity for battery electric vehicles (BEVs) has outperformed both diesel and petrol combined at Leasing.com for the first time in the site’s history.

BEVs were the most popular drivetrain for BCH demand at Leasing.com in Q3, making up almost half (49%) of all business enquiries

Data from the car leasing comparison site for Q3 2023 showed that BEVs were the most popular drivetrain, making up almost half (49%) of all business enquiries.

Demand grew at a rate of 10% year-on-year, underscoring that businesses are ready to make the switch to electric to help drive net zero while also benefiting from low tax rates.

Published as SMMT new car data shows continued uptake of electrified vehicles in October, Leasing.com’s Q3 sales enquiry data also revealed that all electrified vehicles, including hybrids, plug-in hybrids and full electric cars, reached a significant 60% of all BCH enquires – the largest proportion since records began – following an 8% growth in enquiries compared to Q3 last year.

At the same time diesel enquiries saw the most dramatic fall in popularity, from 22% in Q3 of 2022 last year to 16% in the same period in 2023.

Paul Harrison, chief partnership officer, said leasing provides an affordable way for businesses to push the electric button in the most cost-effective way.

“Our data shows a continuing shift to electric through affordable fixed cost leasing agreements, with several key factors to the uptake.

“Indeed, the improved availability of EVs and the preferential tax regime which reduces costs for employers and their employees wanting to switch to electric is boosting EV popularity. And the zero emission vehicle (ZEV) mandate is continuing to put pressure on manufactures to invest in appealing EV propositions to businesses, ensuring they hit their targets and avoid hefty fines.”

But popularity of new petrol cars grows among consumers as EV demand falters

Many BEVs remain unaffordable for private drivers in the current high-inflationary environment,

Conversely, Leasing.com has reported that personal contract hire (PCH) drivers looking to lease a new car are switching back to petrol as the popularity of BEVs falters for this segment of the market.

Its Q3 data shows that petrol vehicles accounted for a significant 73% of all personal contract hire (PCH) enquiries submitted via Leasing.com. This represented an 8% increase in demand compared to Q3 2022. The Nissan Qashqai, Volkswagen T-Roc and Volkswagen Golf were the three most popular vehicles on PCH in Q3.

In contrast, battery electric vehicles (BEVs) experienced a fall in consumer demand, with PCH lease enquiries falling by 2% compared to Q3 last year. BEVs accounted for 11% of all PCH enquiries between July and September in 2023.

The data echoes trends found in the wider industry. The SMMT has warned that the BEV volume increase has been driven entirely by fleet/business take-up as buyers are drawn to the reduced environmental impact and helpful tax incentives.

But such incentives are lacking for private drivers following the end of the Plug-in Car Grant and many BEVs remain unaffordable in the current high-inflationary environment, despite the ever-increasing choice of BEVs now offered by manufacturers.

Where the private leasing figures do tally with the data for business leasing is on falling demand for diesel leasing agreements; for PCH this was down by a significant 40% in Q3 2023 to represent just 3% of total PCH enquiries.

As with many in the car sector, Leasing.com’s Paul Harrison has said incentives are now needed to support the adoption of electric vehicles among private drivers.

“Our Q3 data shows that many private motorists turned their backs on BEVs in favour of more affordable petrol vehicles and is in stark contrast to the significant growth in BEV demand that we saw throughout 2022.

“Despite the availability and choice of BEVs growing, it is the ongoing cost-of-living crisis and increased rentals that have stunted the uptake of BEVs in the new car market this year.

“This trend will concern all motor manufacturers ahead of the introduction of the zero emission vehicle mandate next year. With a slow economic recovery forecasted, we are calling on the Government to work with the car industry to design a package of measures to help incentivise the uptake of electric vehicles ahead of the Autumn Statement.”