Solving the Social Leasing Challenge

Social leasing as a concept has been regularly mentioned and referred to as a method or tool to facilitate EV uptake and perhaps ameliorate some of the identified negative aspects of the electric transition, such as affordability and mobility poverty for lower socio economic classes. Based on discussions that have taken place with various Commissioner Cabinets as well as Commission officials, Social Leasing encompasses  a multitude of financing solutions, from pure operating leases without transfer of ownership to true consumer finance.

The idea is that social leasing can make EVs and other cleantech products accessible to lower- and middle income groups by offering affordable monthly leasing options at subsidized rates. However, the consequences of any socialised leasing scheme for BEVs may have multi-pronged issues for existing business models.

The two readily identified issues relate to an immediate credit risk  attributable to a higher percentage of those that seek a socially leased asset under a financial arrangement, and secondly the impact the schemes, if rolled out at scale, would inevitably have on residual values (already under pressure for EVs).

Leaseurope has urged the Commission to ensure any guidance maintains a healthy competitive environment in between all different forms of financing. Moreover, given that a lot of problems at present stem from an underdeveloped second hand market, Leaseurope has also urged the Commission to consider a support scheme for the acquisition of second hand vehicles.