Leasing Giant Blames Massive Losses On Used EV Prices

By Paul Homewood

h/t Andy Bartlett

From Fleet News:

Lex Autolease, part of Lloyds Banking Group, has reported a £10.6 million loss in its annual accounts, just three years after pre-tax profits hit more than half a billion pounds.

The vehicle leasing giant – ranked second in last year’s Fleet News FN50 – blamed the decrease in reported profit on a combination of factors.

They included an increase on underlying depreciation charges on the funded fleet, lower profits on the disposal of vehicles, particularly electric vehicles (EVs), and an increase borrowing costs from interest rate rises.

Full story here.

£10.6 million might not sound like a lot. But last year profits fell from £544 million to £124 million for the same reason, as Fleet News reported at the time:

Pre-tax profits for vehicle leasing company Lex Autolease have plummeted by more than £400 million, according to newly-filed accounts.

Blame, in part, has been levelled at lower profits on the disposal of vehicles “due to market conditions” and increased interest expense on its borrowings.

In 2023, almost half (46%) of new vehicle orders were for electric vehicles (EVs) – a similar proportion to the 47% reported in 2022.

The company says that one of the key drivers of performance are the fluctuations in residual values (RVs) of fleet vehicles.

However, it said: “Significant price reductions have been seen through 2023 as significant volumes of battery electric vehicles (BEVs) have come into the market for the first time.”

https://www.fleetnews.co.uk/news/lex-autolease-profits-fall-by-400m-used-evs-blamed-for-reduction

These losses reflect the lack of demand for EVs. New cars are having to be heavily discounted to meet ZEV targets, meaning second hand prices drop. Even at lower prices, private buyers still show little interest.