A robust second-hand EV market is a key requirement for fleet managers
WORDS BY NSW , ENERGY , CLIMATE CHANGE AND SUSTAINABILITY ( ECCS ) GROUP
An important consideration for every fleet manager is what their vehicles will be worth when it ’ s time to turn them over . According to VFACTS data , roughly 40 % of all new vehicles sold annually in NSW are purchased by businesses for their fleets . Ensuring electric vehicles ( EVs ) retain predictable levels of residual value is critical to our EV transition .
This challenge needs to be acknowledged , because if the secondary market falters , both new and used EV sales suffer .
What does the resale market look like for today ’ s fleet buyer ?
Vehicles purchased today will likely hit the resale market in 2028-2029 . By then , charging infrastructure will certainly have advanced , and with initiatives being rolled out across government and industry to better inform car buyers , consumer demand is expected to continue to increase .
Fleet managers who embrace the transition today stand to benefit from the growth of the market over the coming years with more experience in managing the transition and a better understanding of the needs of fleet customers .
Confidence is key
Fleet vehicles are typically turned over within about four years , creating an important pipeline for second-hand buyers seeking affordable options . A sound second-hand market relies on buyers feeling confident in the product they are purchasing . Whilst there are tools and services available to build buyers ’ confidence – such as battery degradation testing – more widespread adoption of these tools is needed to support continued growth of the EV market .
Rethinking residual value
When transitioning to EVs , fleet managers and business executives need to consider a total cost of ownership ( TCO ) model rather than traditional depreciation or amortisation modelling . EVs often have a higher upfront cost and currently unclear depreciation schedules compared with equivalent internal combustion engine ( ICE ) vehicles .
22 ISSUE 51 FEBRUARY 2025 / WWW . AFMA . ORG . AU