EVs and innovation help deliver 2.9% growth for Arval UK

A strong 2.9% organic fleet growth during 2023 has been announced today by Arval UK, in a challenging market constrained by new car supply and inflation.

The figure, released to coincide with the launch of the fleet and mobility company’s global results, brings the total UK fleet size to 192,068 at the end of December 2023.

Much of the rise has been powered by the ongoing transition towards battery electric vehicles (BEVs). Arval’s UK fleet now includes 44,021 BEVs which account for a 23% share of the total – up by 52% year-on-year. Also, 33% of new vehicle orders placed during December were for BEVs, so the transition away from petrol and diesel is set to continue.

Arval UK Managing Director, Lakshmi Moorthy, said: “The story of our growth in 2023 is very much centred on fleet adoption of zero-tailpipe emission vehicles. Businesses are rapidly moving in this direction, prompted by favourable benefit in kind taxation and a corporate desire to reduce their environmental impact.

“However, a further and perhaps unappreciated factor behind our success is that we are in a moment when leasing opens up new mobility options and helps customers to manage economic pressures. This is a key part of the organic rise in our fleet numbers.”

She added that 2023 had also been a highly innovative year for Arval UK, with additional products contributing to the growth of the company’s fleet and supporting customers on the transition to new mobility solutions. These included electric cargo-bike leasing, and Arval Re-Lease, which enables consumers to lease used vehicles.

Lakshmi said: “We unveiled our electric bike leasing programme last year. It is part of our concept of identifying the right vehicle for the right journey with optimum usage. Several customers are now using electric bikes for last mile deliveries in urban areas and to keep their staff mobile in cities with clean air zones.

“Notably, our electric bike fleet has grown by 133% in 12 months, primarily through electric cargo-bikes. We believe this is a market with huge promise. Similarly, our used vehicle product, Arval Re-Lease, has seen an 161% increase in lease numbers with a tenfold increase in the number of BEVs leased. This is supported by the rise in used BEVs now becoming available from previous leases. Again, we foresee further growth here in 2024 as this opens up access to attractive used vehicles, including BEVs, at a different price point for a whole new segment in the market. It also democratises access to EVs which may be perceived as expensive.”

Innovative products which are linked to driver safety grew strongly. Uptake of Arval Accident Management increased by 27%, as did Arval Total Care, a product which increased by 34% and enables customers to bundle most significant vehicle costs into a single monthly payment.

Finally, salary sacrifice has gained even more traction and fleet numbers have increased by 48% in 12 months and with more than half being BEVs.

Lakshmi said: “This is another area where the company car taxation advantages of BEVs are having a significant impact, making salary sacrifice initiatives very attractive to employees who want to lease a car by availing of the very attractive tax scheme in place."

As explained in the Arval global release, 2024 marks the final year of the Arval Beyond corporate strategy and its successor will be announced early next year.

Find out more about Arval UK here.