Europe Car Leasing Market Trends

European governments are enforcing strict emission standards and incentivizing electric vehicles (EVs). Fleet leasing companies are shifting to EVs to meet CO2 reduction targets and sidestep carbon emission penalties. Companies operating in the market are forming strategic partnerships to facilitate the transition to electric vehicle fleets across Europe. For instance, in July 2024, Ayvens, a player in sustainable mobility, signed a MoU with BYD, a new energy vehicle (NEV) manufacturer. This collaboration aims to bolster their business relationship and enhance the distribution of electric passenger cars and light commercial vehicles (LCVs) for both corporate and retail clients in Europe.

Moreover, various European firms are emphasizing sustainability, integration Environmental, Social, and Governance (ESG) principles into their core strategies. Leasing EVs aligns with their sustainability commitments, helping them reduce their carbon footprint while meeting corporate social responsibility goals.

Major players operating in the market are emphasizing on mergers & acquisitions to enhance their car leasing comparision. For instance, in October 2024, Carwow Group acquired Gridserve Car Leasing from Gridserve, a UK based on-the-go electric vehicle (EV) charging company. The acquisition is in line with company’s strategy to speed up in online car changing marketplace with major focus on EV lease deals. The acquisition will also enhance company’s car leasing comparision engine and will offer Carwow users with an broader range of car leasing options from various brokers acorss UK.

In the Europe car leasing market, a major risk revolves around the unpredictable residual values of leased vehicles. Leasing firms depend on precise predictions of a vehicle's end-of-lease value to set lease rates. However, the swift technological changes and evolving consumer preferences, forecasting a car's future value has grown more challenging. For instance, internal combustion engine (ICE) vehicles depreciate more rapidly than anticipated as the market pivots to electric and hybrid models. Such unpredictability poses a financial risk for leasing companies, especially if vehicle depreciation outpaces their forecasts.