Remarketing Expert Tracks in 2022: bigger, longer, better!
It’s going to be an exciting year for the Remarketing Expert Track, moderator Johan Verbois announced, introducing the year’s first session last Thursday. First off, there will be more sessions than ever. And they’ll be longer, offering even more expertise. Like that first one, on ‘How to optimise the sale of EVs’.
Electrification is the single biggest change revolutionising the Remarketing industry today. Governments and manufacturers are putting a lot of effort into promoting the introduction of electric vehicles (EVs) onto the market – but with most of the attention focused on new EVs, and very little on used ones. That leaves remarketers to make the best of a difficult situation.
Coming into balance
First up was Andy Shields, Business Unit Director at INDICATA, with some good news. The Residual Values (RVs) of battery-electric vehicles (BEVs) had been lagging behind those of other motorisations – a consequence of oversupply on the new-vehicle market – but that lag is now decreasing. “BEV supply is coming into balance with BEV demand”, said Mr Shields.
One reason is that CAFE regulations appear to have less impact in 2021 than in the first year they came into effect. Another reason: the chip shortage. “EVs require twice as many as ICEs. Which raises the question: How long will the shortage last?” Mr Shields cited a recent report by Boston Consulting that is gloomier than most other forecasts: “Balance will return only in 2024. That’s much longer than most of us would have suspected.”
That, however, is good news for BEV RVs: “The market recovery for BEVs may continue for longer than we otherwise might have thought.”
Say “EV” and think of a country. Chances are your mind will drift to Norway, the world leader in electrification. Geir Kristoffersen, Managing Director of local RV experts Rødboka, explained how Norwegians deal with EV RVs.
Back in 2011, when Norway started its electrification drive, “there was no empirical data. We just had to go in and take the risk”, Mr Kristoffersen explains. The risk has paid off: “82% of private customers now buy BEVs. That’s tremendous. There were anxieties – as everywhere else, about range and battery degradation – but those have largely been put to rest. For most, BEVs are now the first choice.”
Public charging infrastructure proved elemental in ensuring the mainstreaming of EVs. As they are now the norm, subsidies for EVs are being reduced. No matter: “The technology will now manage by itself.” Both on the new and used markets. That’s not to say there aren’t issues to be resolved. “EV range reduces 15% to 30% in sub-zero temperatures. It would be good to have a WLTP test for, say, minus-five conditions, so we have clarity on this topic.”
500-1000 km range
In a first panel discussion, Rick Zielman (Partnership Director Europe at Autotelex), Matt Freeman (Senior Consultant Automotive at cap hpi), and Dr Christof Engelskirchen (Chief Economist, Autovista) joined Messrs Verbois and Shields to reflect on forecasting EV RVs – arguably more difficult now than ever.
- While that may be true, there are plenty of fixed data points to help forecasters make sense of future RVs, said Mr Freeman.
- In fact, BEV RV predictions are getting easier: there is more data, there are less imponderables, and we better understand key RV drivers, argued Mr Shields.
- PHEVs will become less of an issue – Mercedes having said it will stop further development, other OEMs certainly following soon – ensuring BEVs will soon become the sole, solid alternative, said Mr Zielman.
- As long as range is below 500 km, it will remain an issue; only when BEVs reach a range of 500-1000 km will that change, but OEMs aren’t there yet, said Mr Engelskirchen.
RV up by €450
In two concurrent breakout sessions, Dr Engelskirchen asked the question: “Will the remarketing bubble burst?” and Sonia Geay (Head of International Business Develepment at Stampyt) zoomed in on how digital tools can optimise the sale of used EVs.
After a break, Martin Dillinger (expert alternative powertrains at TÜV Rheinland and member of the CARA working group on battery state of health) gave an update on CARA’s work in progress on creating a battery health certificate.
“There are strong signals that a credible quality warranty increases both the quality and the value of used vehicles.” He gave the example of a 5 to 7-year extended warranty that increased the value of a 36-month-old compact by around €500. A battery certificate could do something similar, increasing the RV of a used EV by up to €450. Since it will also increase transparency and confidence, “soon customers will demand these certificates.”
Ian Wright (Director of the CARA Academy) gave the last presentation of the day, on the state of OEMs’ certified programmes today. He was joined by Olivier Ferry (Head of Corporate Sales & Remarketing at Hyundai Europe) and Vaclav Rothkögel (Head of Polestar Pre-Owned Europe) for the closing event of this Remarketing Expert Track: a discussion on the future of BEV sales.
- At present, used-car buyers are “slightly more conservative” than new-car buyers when it comes to trying out new technologies, said Mr Rothkögel.
- “But that will change when EVs go mainstream”, responded Mr Ferry.
Everyone agreed that once the price point is right and assurances are strong enough, EVs will be the new normal. Even for normally cautious lease companies. And even battery certificates won’t be a hot potato anymore:
- “It won’t be relevant whether that certificate comes from an OEM or an independent organisation, as long as it’s simple, and standardised”, said Mr Wright.
Check this page to keep up to date with what’s coming up on the Remarketing Expert Track, and other Fleet Europe events in 2022.