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CAP sceptical over used electric van residual prospects

CAP has forecast a residual value of 20% for the first fully electric van, at 3yrs/30,000 miles which it believes reflects conservative views in the trade about the future prospect of used electric vans.

Despite the benefit of extremely low running costs – which currently include a 100% congestion charge discount for operators in London – CAP believes electric vans face being penalised in tomorrow’s used market for a range of reasons.

The Azure Dynamics Transit Connect, launched into the UK market this summer through a small network of selected Ford commercial dealers, is the result of collaboration between Ford and Canadian company Azure Dynamics.

With a new list price of £39,999, the van is forecast to retain a value of £8,000 after 3yrs/30,000 miles.

CAP’s opinion has been that the commercial viability of electric vans remains fraught with uncertainty, especially for second users.

One of the major issues has been the still largely unknown potential for the need to replace expensive battery packs.
The prospects of persuading second users to pay a premium for technology that remains in its infancy remain slight, in CAP’s view.

Tim Cattlin, CAP commercial vehicle monitor editor, said: “We have no wish to dampen enthusiasm for any new development in the light commercial vehicles sector but at this point the prospects for all-electric vans are fraught with difficulties, despite the clear operating advantages of using one for specific kinds of work.

“We are looking to the future and a typical trader’s willingness to risk purchasing such a vehicle for stock. At this point it seems unlikely that the risk around battery life alone will be considered reasonable until a real track record of reliability has been established, along with a clear understanding of battery longevity.

“Another serious sticking point is the risk to an end user of having to spend several thousand pounds additionally on a replacement battery pack on a five to 10 year old vehicle.

“Our current residual value forecasts are therefore conservative, having taken all of the relevant factors into account. However, our minds remain open and as more market experience is gained the industry can rest assured we are closely monitoring for everything that can be learned about this new emerging sector.

“We also recognise that although these vehicles are likely to cause sleep loss for a fleet manager, to the marketing director of an environmentally conscious business with a proactive desire for a pioneering green image, their value is not entirely tied to the balance sheet.”

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