28 Oct 21

New leasing company aims to halve e-LCV lease costs

Voltia Electric is in negotiations with major international leasing companies to launch a specialist e-LCV leasing service that will dramatically reduce lease rentals

A new leasing company aims to cut monthly lease rentals for electric light commercial vehicles (e-LCVs) by as much as 50%. Voltia Electric claims the leasing industry is overpricing contracts for battery-powered vans, and is applying its extensive experience in the sector to drive down the cost of e-LCV leasing and win market share as fleets switch to battery power.

Voltia Electric is a sister company to Voltia, the Slovakian company that converts the Nissan e-NV200 van into the XL Voltia with a substantially larger cargo space. Launching at the end of this year, Voltia Electric plans to offer fleets leasing contracts for 20 e-LCVs from different manufacturers, including its own range - last week Voltia launched five new electric van conversions, based on base models from the Stellantis range.

“Financial institutions and their leasing companies are very conservative in their approach to electric commercial vehicles and are viewing them through the lens of vehicles already on the road or the first generation of EVs, so they see a lot of risk and are overpricing their rentals,” said Peter Hofierka, Chief Financial Officer, Voltia.

“We are developing a digital leasing company to offer customers a very different pricing structure. We don’t want to create a back office and the unnecessary infrastructure that goes with that; we want to create a virtual leasing company.”

With a decade’s experience in electric vehicles, Voltia is far more optimistic about the performance and cost effectiveness of e-LCVs, and has banks of data to prove it. Some of the first electric vehicles it converted have now covered close to 700,000 kilometres.

This has prompted the company to open dialogue with many of the largest leasing companies in Europe, looking for a partner with the international presence to provide pan-European coverage for an e-LCV leasing offer. It is now in detailed talks with ALD, Arval and LeasePlan.

Higher RV forecasts

Voltia Electric promises radically better e-LCV residual value modelling to help fleets benefit from higher residual values. There is currently a 30% difference between leasing industry forecasts for the residual values of e-LCVs and the actual sums that the vehicles are selling for in the secondhand market, said Hofierka. This means that in many instances leasing companies are setting a lower residual value for e-LCVs than for diesel vehicles, but he argues that e-LCVs should be worth 10-15% more at the end of their fleet life.

“Our data and experience shows e-LCVs have substantially longer lifetimes and much better reliability than ICE vehicles, and can work for longer without increasing their maintenance costs,” said Hofierka. “Plus, longer contracts reduce residual value risk, while the opposite is true for ICE vans.”                                          

Lower maintenance bills

While diesel vans are typically leased for three or four years then sold before their maintenance bills start to rise, this end-of-life spike does not apply to e-LCVs even after six years, said Hofierka. This means e-LCVs can be leased for longer, allowing fleets to amortise the higher acquisition costs over an extended period.

Voltia Electric is also keen to adopt a pan-European approach to residual values, in stark contrast to the country-by-country approach of multi-national leasing companies. It makes no sense, said Hofierka, for the residual value forecast for an e-LCV to differ by as much as €5,000 between Germany and the Czech Republic when the countries border each other and cross-border remarketing costs are so low.

Nor should leasing companies fear e-LCVs looking old or obsolete in five or six years’ time. Electric vans will be bought by small businesses whose primary, if not only concern is whether the vehicle is capable of doing the job.

Voltia has worked with DPD and other couriers on unofficial pilots to trial e-LCV leasing, engineering every element of the lease to reduce its cost.

“We have already proved in many cases how to make leasing electric vans better and cheaper than diesel, even in countries where no subsidies are available for e-LCVs,” said Hofierka. “We achieved this through residual value improvement, low maintenance costs based on actual data, and cheaper insurance.

“For new vehicles, the projected maintenance costs of an EV are 70% of the costs for diesel. But imagine you are a courier company starting the engine 150 times per day. After five or six years the difference in maintenance costs will be huge. In Paris, one of our customers decided to go for emission free deliveries and now operates 300 EVs. Their feedback is that they will never go back to diesel vehicles; the maintenance costs are incomparable.”

Lower insurance premiums

Voltia has also worked hard to overcome the perception that EVs are higher risk and should therefore have higher cost insurance premiums. While most insurance policies are based on the purchase price of a vehicle, and therefore penalise EVs compared to ICE vehicles, Voltia ran a pilot with Allianz to prove there is no difference in risk.

“We have data on the damages to EVs over several million kilometres, and the risks are no different to diesel vehicles. The most expensive part, the battery, is the best protected. So we saved almost €100 per month on insurance,” said Hofierka.

“Our aim is to accelerate the massive upcoming e-LCV adoption, by creating e-LCV lease rentals that are half the price of traditional leasing models for e-LCVs.”

Images: Voltia



Authored by: Jonathan Manning