Residual value fears over ICE vehicles

FleetCheck says its customers are expressing fears over residual values when buying new diesel and petrol cars and vans ahead of the 2030 ban.

The fleet software company found that buyers are concerned about the prospects for internal combustion engine (ICE) models in the run-up to production ending in 2030.

Andy Kirby, customer success director at FleetCheck, said: “It’s important to put this into perspective that, while we are seeing an increase in EV adoption, many vehicles our fleets are buying still have petrol and diesel power.

“However, some – especially those that outright purchase – are very much aware that if, for example, they buy a panel van today and operate it for five years, that’ll mean they’ll be disposing of it in 2026, when 2030 will be very much in sight.

“The questions they’re asking are about how much this van might be worth at that point in time? Will ICE RVs be following a similar pattern to now? Of course, there is no easy answer. We have no useful historical precedent for what is happening with vehicle electrification.”

Kirby added that there are a wide range of possible scenarios for ICE residual values.

“We could be looking at a situation in 3-5 years where used buyers are moving to electric, resulting in a slump in diesel and petrol demand or, at the other extreme, that the looming end of diesel and petrol production makes them more sought-after.”

FleetCheck is recommending a phased introduction of EVs to its client base, with a planned move away from petrol and diesel over time.

“We believe that the first step should be to gain senior management buy-in over EV adoption, with a structured approach that sees ICE cars and vans replaced over time following normal cycles.

“There also need to be audits of charging availability at your premises and the homes of drivers, as well as assessments of different types of EV to ensure their suitability for different applications across your fleet,” Kirby concluded.