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Increasing concern over future ICE residual values

By / 3 weeks ago / UK News / No Comments

The issue of future residual values for ICE cars and vans is becoming a concern to fleets in the countdown to 2030.

Fleets are starting to ask whether ICE RVs in the future will follow a similar pattern to now

According to fleet software firm FleetCheck, the majority of vehicles that its customers are buying are still petrol- or diesel-powered and buyers are starting to wonder about the residual value prospects for such vehicles.

The growing trend has been revealed by FleetCheck’s sister Fleetfind operation, which helps its client base source vehicles.

Andy Kirby, customer success director at FleetCheck, said: “Some – especially those that outright purchase – are very much aware that if, for example, they buy a panel van today and operate it for five years, that’ll mean they’ll be disposing of it in 2026, when 2030 will be very much in sight.

“The questions they’re asking are about how much this van might be worth at that point in time? Will ICE RVs be following a similar pattern to now?

“Of course, there is no easy answer. We have no useful historical precedent for what is happening with vehicle electrification.”

There are still many unknowns related to how drivers will react to the countdown to 2030 and Kirby said this means there are a wide range of possible scenarios for ICE residual values.

“We could be looking at a situation in 3-5 years where used buyers are moving into electric cars and vans en masse, meaning there is a slump in diesel and petrol demand or, at the other extreme, that the looming end of diesel and petrol production makes them more sought-after – or at any point in between.

“There is even a possibility that there are different developments in different parts of the market. For example, it’s not impossible that used car buyers overwhelmingly favour electric going forward but that there remains demand for diesel commercial vehicles. The fact is no-one really knows.”

The advice from FleetCheck for its client base is to adopt a phased introduction of EVs, replacing ICE cars and vans in line with normal vehicle cycles.

But Kirby added: “It’s also important to engage drivers who want to be early adopters and are keen to drive an EV, even if this means redeployment of your fleet by keeping ICE vehicles with people who prefer them for a while longer.

“There also need to be audits of charging availability at your premises and the homes of drivers, as well as assessments of different types of EV to ensure their suitability for different applications across your fleet.”

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Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. Natalie edits all the Fleet World websites and newsletters, and loves to hear about any latest industry news - or gossip.