Tesla and BYD dominance of leasing market shaken by MG, Volvo and plug in hybrids

Electric vehicles still account for more than half of new car sales in the novated leasing market, but the recent dominance of Tesla and its big Chinese rival BYD is being shaken by a number of rising EV brands, and the growing popularity of plug in hybrid vehicles.

Fleet Partners, a listed company that specialised in novated leases and managing corporate fleets, says the market is being driven by exemptions to the fringe benefits tax introduced by the federal government, particularly with individuals seeking novated leases.

It says that, for the moment at least, the top selling  Tesla Model Y, Tesla Model 3 and BYD Atto 3 electric vehicles remain the most popular EV models for novated leases.

“However, their proportion is reducing as a greater variety of makes and models becomes available, including a wider range of PHEVs (plug in hybrids),” the company said in a presentation to investors on Monday.

CEO Damien Berrell says it is clear that the growth of plug in hybrids is partly due to media reports about falling second hand EV prices. Mitsubishi, with its plug in Outlander, has been one of the biggest beneficiaries of this. Other companies doing well with their electric offerings are MG, Volvo and Hyundai.

Berrell told an investor call he is unsure how resilient the PHEV market will be once the FBT benefits are phased out next April – assuming that happens – but one of the big barriers to more widespread adoption is the lack of suitable electric utes and vans.

“(There is) no viable ute/van currently available,” the company says in its presentation deck. “PHEV utes (are) expected from late 2024 and BEVs from late 2025.”

Indeed, the BYD Shark PHEV ute has already reported strong early sales, and some companies – particularly mining fleets and others – are showing interest in models such as the Ford Lightning and Rivian utes that are being imported on a bespoke basis.

Fleet Partners does note that employees are accepting and liking EVs, and moving beyond the “early adopter” stage, largely because of the uptake in novated leases which has proved that range is not so much of an issue.

It is hopeful for more business to be generated with corporate fleets, particularly as they struggle with the charging requirements, either at work venues or at homes.

It says it is too early and there are too few dat points to “comfortably draw conclusions” on re-sale values of EVs, although data from Datium Insights indicates that used EV values reduced quicker than petrol used values in the second half of its calendar year, although the volume of used EVs sold was still low at 22 a month, albeit increasing from 11 per month in the first half.