Zenith, the UK's premier independent leasing, fleet management, and vehicle outsourcing business, has made a significant impact in the electric vehicle (EV) market by investing over £400 million in EVs in the past 18 months. As the demand for electric cars increases, the company has emerged as a frontrunner, having raised a £475 million green bond in the preceding year to support the financing and acquisition of EVs.
What started as a slow revolution a little over 10 years ago, has accelerated in dramatic fashion over the last three years. Two years ago, Zenith reported that battery electric vehicle leasing had taken number one spot – and that 54% of its new leases were for EVs. The company now expects to achieve the Government's target of ‘zero petrol/diesel vehicles' around 2025 – a full five years ahead of schedule.
According to Tim Buchan, Zenith's CEO, the green bond required them to procure £475 million worth of qualifying battery electric vehicle (BEV) assets within two years, a target they have successfully surpassed. This substantial investment has led to a remarkable growth of its EV risk fleet, with nearly a third of Zenith's funded car fleet now consisting of electric vehicles, excluding the managed vehicles.
The surge in interest for electric cars has primarily been driven by corporate customers, with more companies adopting EVs into their fleets and salary sacrifice schemes gaining traction in the market. However, Buchan acknowledges that electric vans are yet to see a similar uptake due to technological challenges and the need for more capable EV models to enter the market.
To address these challenges and meet the increasing demand for EVs, Zenith has undertaken various pilots, working with businesses to understand their specific requirements for battery electric vans. The company remains committed to its mission of decarbonising the UK's vehicle fleet while ensuring the transition to EVs does not come at the expense of its customers' needs.
Despite recent supply chain challenges stemming from geopolitical events and the pandemic, the new car market has seen considerable growth, with June reporting a 26% increase in overall new car sales. Fleet and business new car registrations experienced even greater growth, rising by more than 35%. This surge in supply has provided fleet customers with more certainty and helped address previous frustrations caused by long lead times and vehicle cancellations.
The return of employees to corporate car schemes has been attributed to the introduction of new benefit-in-kind (BIK) tax rates, which have been kept low for BEVs. Additionally, fixed-price motoring for three to four years in corporate schemes, even amidst high inflation, has also attracted more people to join these schemes.
Zenith's broad range of services, covering corporate vehicles, commercial vehicles, and its retail offering, ZenAuto, has been one of the key factors contributing to its success in the industry. The company's commercial vehicle division has seen growth since the acquisition of Contract Vehicle Holdings (CVL) and Cartwright Fleet Services, allowing Zenith to offer comprehensive services to customers seeking to minimise downtime and optimise fleet management.
Zenith's commitment to embracing digital technology has resulted in a £25 million investment in a purpose-built online portal called CVConnect, allowing fleet managers to access all vehicle data and manage fleet performance efficiently. Additionally, the company is transitioning to a seamless digital journey for corporate users, providing an improved experience for drivers in its corporate division.
As Zenith continues to lead the charge in the UK's electric vehicle market, the company remains focused on delivering exceptional services, reducing downtime for commercial customers, and providing tailored solutions for corporate and consumer markets alike.
Zenith says that while the prime motivator for leasing in the commercial sector is maximising the amount of time vehicles are on the road – when it comes to individual drivers, the emphasis is on the move away from fossil-fuels. That, says Buchan, is the reason his company has invested in four major workshops and over 100 mobile service units.