The leasing sector is looking for a green leader
Tomorrow Transport & Environment (T&E) will kick off a new campaign calling on Europe’s biggest leasing firms to go faster on electrification. People might wonder why T&E has now decided to target the leasing sector.
The holy grail of Transport & Environment - as its name suggests - is to decarbonise transport as soon as we can. Rapid electrification is one of the - if not the most - effective way to achieve this. But in order to get there, we believe that everyone in the automotive sector has to play their part.
Leasing firms play a huge role in accomplishing this mission: with a fleet of millions of cars they have a big impact on the cars people drive and as such the pace at which we make the much needed shift to electric. The leasing giants claim that they are already doing their fair share and accelerate electrification, but is this really the case?
When taking a closer look at their climate plans, I am not convinced. Electrification targets of leasing firms are weak (most of them don’t even have any) and not one company has set an end date for leasing fossil fuel cars. This is in strong contrast with many carmakers and fleets that have already committed to go 100% electric by 2030.
When confronting leasing companies with this inconvenient truth, the reaction is one I have seen many times before when dealing with industry: finger pointing. We are dependent on the cars the consumer demands and the vehicles carmakers produce, they say. Of course the transition away from diesel and petrol is an interplay between the different stakeholders, but burden shifting is too easy and delays the much needed change. This is the reason why we have decided to call on leasing companies to finally take their responsibility and accelerate their plans to go electric.
Who will emerge as the first real green leader?
So what would it take for leasing companies to become real green leaders? Firstly it is about ambition: leasing firms should set electrification targets that are really ahead of the market and finally commit to stop leasing fossil fuel cars latest by 2028. Looking at carmaker production plans, there will be enough supply for leasing companies to go full electric. Moreover EVs will reach price parity by 2027 which will remove one of the biggest barriers - the higher upfront costs of electric cars.
But these higher targets should also go hand in hand with corporate policies that will ensure that leasing companies will effectively meet their higher ambition. If leasing companies are really serious about speeding up electrification, they should become much more vocal and supportive on governmental action that will increase demand for electric cars. For years T&E has been calling for company car tax reforms throughout Europe and EU action on fleets. So far the leasing giants have been remarkably quiet. Only their public and explicit support for ambitious policy reforms will really convince me that leasing companies are actually serious about their electrification commitments.
There is also a big opportunity for CEOs of Europe’s top leasing companies to be recognised as green pioneers. Could Tim Albertsen or Alain Van Groenendael become the first CEO to commit to a fossil fuel phase out in the leasing sector? Apart from good publicity this is also a sensible business strategy. You only have to look at the automotive industry to understand that the longer you wait, the more you will lose. If I was a leasing CEO, I’d rather be a Tesla than a European carmaker playing catch-up.
Stef Cornelis, director of the Electric Fleets Programme at Transport & Environment