Small-to-medium enterprises (SMEs) are turning to leasing in the move to fleet electrification.

While SMEs generally recognise that whole-life costs for EVs are comparable to petrol and diesel equivalents, the upfront costs can be something of a concern

Fleet software company FleetCheck said the high purchase price of electric vehicles was a primary factor in causing many businesses of this size to reconsider their acquisition method.

Managing director Peter Golding explained: “We have a large number of SMEs in our user base and, especially at the smaller end of the scale, vehicle acquisition is often relatively ad hoc. This doesn’t mean it isn’t taken seriously but there is not the same kind of structured approach seen in larger fleets.

“When businesses have cash available, they will often outright purchase, but will also take out loans or leases at different times. It often just depends on the particular car or van, the driver and the moment.”  

But anecdotal evidence suggests this approach is starting to change due to concerns over the upfront costs of EVs. 

Golding added that while leasing was already popular among SMEs, momentum did seem to be growing around further use, especially when it came to EVs.

“Leasing circumvents the problems of upfront costs and provides regular payments over a period of time, plus it also removes any residual value worry. This is an issue because some SMEs perceive that current EVs will be superseded by better models in the medium term.

“Also, there is a general degree of worry about the shape of the economy and leasing means that businesses can keep more money in the bank for a longer period of time, providing a higher degree of liquidity if problems do arise.

“Of course, if we see a price realignment for EVs in the medium term that makes purchase prices lower, this trend might reverse but, especially among the more expensive, longer-range EVs favoured by fleets, this seems relatively unlikely.”