Fleets are now being offered discounts on EV list prices, heralding a more competitive environment, according to Fleet Professionals (AFP)’s 2023 Conference.

Lead times on EVs also seem to be falling

It marks the first time that fleets have really been able to access deals on EVs and is the result of the recent price cutting by Tesla and the arrival of new manufacturers from China, alongside a gradual ramping up of production volumes following the pandemic.

Mike Potter, CEO, Drive Electric, told delegates: “It’s really a sign that EVs are becoming a normal part of the fleet market as well as the sector seeing a return to something a little closer to traditional market conditions. We’re not talking about massive discounts but the time when all EVs were sold at list price appears to have passed, at least for the time being.

“The moves made by Tesla appeared to us to be designed to try to prompt some kind of price realignment in the EV market and, to some extent, that has worked – although it has arguably had negative effects in terms of setting future residual values. Certainly, others have had to look at their own sales to fleets and whether incentives needed to be introduced.”

China’s incoming OEMs have also played a big role in changing the face of the market.

“MG is now really established as a standard fleet choice at the entry-level EV end of the market and the arrival of others such as BYD could have a similar impact in the mid-market. Their product appears to be strong enough to challenge existing players and if availability is good, they could mount a serious challenge.”

This was highlighted by Cox Automotive earlier this year when it said an influx of Chinese brands over the next 12-24 months could drive down prices of both battery electric vehicles and petrol and diesel models.

Lead times on EVs also seem to be falling according to some fleet managers at the AFP conference – substantially in some cases, although this could create its own problems.

Peter Milchard, AFP board member, said: “It was interesting during our panel discussion to hear that some fleets, who are sensibly placing EV orders 12-18 months ahead of when they actually need the vehicles based on recent supply experiences, are now seeing some of those orders arriving in 6-9 months.

“On one hand, it’s good news, because it suggests that lead times are returning to sensible levels in some instances but it does mean that their orders are arriving a year earlier than they really need them, which can obviously be an issue in itself.”

On a separate note, the conference also debated the advantages of solus versus panel funding for fleets.

Steve Winter of Appleridge Fleet Consultancy said: “You can easily find differences of between £30-£100 per month on the same vehicle depending on the leasing company. These are not normally a sign of anything other than the appetite of that business for leasing you a certain kind of model of vehicle but does show the importance of benchmarking when it comes to vehicle acquisition. Fleets should consider that having a panel of lenders is the right solution.”

The AFP conference, held at the British Motor Museum in Gaydon, also included panel discussions on topics including handling supply matters, dealing with the rising costs of leasing and rental, managing an aged fleet, reimbursing drivers of electric vehicles, and optimising van fleets while gearing up for electrification – some of the big issues operators are facing at the moment.

AFP chair Paul Hollick said: “We wanted delegates to leave with ideas they can put straight into action – and the feedback that we are receiving suggests that the conference very much achieved that aim.”