Uncertainty over the performance of electric vehicles means reliable future residual value forecasting is currently impossible, according to UK-based CAP. CAP, established in 1979, is a leading provider of vehicle valuation data, new vehicle information and business solutions to the automotive industry.
Customers include the majority of leading finance institutions, contract hire and leasing companies, vehicle retail groups and insurance companies.
One of the major issues is that battery replacement costs threaten to render commercial electric vehicles in particular worthless after warranties expire, CAP believes.
A range of questions must be answered before end users can make truly informed choices. Contract hire or leasing operators and funders will also need substantially more information before they can clearly understand their risk position.
CAP is now closely investigating the burgeoning electric vehicle sector to determine the current facts and understand the future intentions of manufacturers bringing all-electric offerings to market.
One of the problems of this sector at the moment is the diversity of approaches being taken by manufacturers. Our customers are asking for clear information to enable them to plan their future vehicle mix strategies but there is still very little confirmed information from manufacturers around crucial questions such as battery finance options, battery life, anticipated replacement costs, charging systems and overall running costs.
This means we are unable to realistically offer a view on future residual values and only when those questions are answered will we be able to do so. For example, with some battery replacement costs mooted to approach the £10,000 mark it currently seems unlikely that a high mileage commercial vehicle in particular approaching the end of its warranty period will have any residual value at all.
We are speaking to all manufacturers involved so we can definitively address these questions as soon as possible. This is necessary to enable potential owners, operators and funders to understand their future risk position and where all-electric vehicles potentially fit into their future operations.—Mike Hind, CAP Communications Manager
CAP is now undertaking a major review of the sector and will report on its findings and future residual value forecasting position as soon as sufficient reliable information is available.