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The Automotive Update: What fleets learnt about electromobility at Flotte

Fleets flocked to Flotte in Germany, with industry experts taking to the stage to share vital insights. Autovista24 editor Tom Geggus finds out what happened at the event in the latest Automotive Update podcast. In this episode, Dr Christof Engelskirchen, chief economist and director of professional services, Europe, JD Power, shared his Flotte insights. This includes electrification, the role of fleets, and the opportunities and risks for these businesses. Subscribe to the Autovista24 podcast and listen to previous episodes on Spotify, Apple and Amazon Music. Fleets and Flotte Taking place between 25 and 26 March in Düsseldorf, Germany, Flotte welcomes Germany’s fleet industry experts and decision makers. Among them was a team from JD Power, including Dr Christof Engelskirchen, who gave a presentation at Flotte. His session was titled ‘E-mobility in the headwinds – fleets as a beacon of hope and risk factor’. Speaking with Autovista24 editor Tom Geggus, he outlined some of the major points from this presentation. Of all the topics that could be presented to a room full of fleet professionals, one stood out: electrification. Fleets play an important role in the push towards electric vehicles, while the technology presents big risks and opportunities. Fleets behind the steering wheel In major EU new-car markets, electrification continues to be a subject in the headlights. Battery-electric vehicles (BEVs) currently make up under 30% of new-car registrations in each of Germany, France, Italy and Spain, according to ACEA. ‘That is a long way to go when you consider what the EU has been prescribing, which used to be a 100% tailpipe CO2 emission reduction by 2035 and is now becoming a 90% reduction,’ Engelskirchen said. ‘So, we have that gap that needs to be bridged.’ One of the biggest markets in the region, contributing heavily to the powertrain development, is Germany. With a large fleet industry making a significant proportion of registrations, these businesses will be vital to electrification. Weighing things up at Flotte There are sizeable opportunities for fleets within this transformation. Engelskirchen outlined that one of the biggest opportunities is the additional volume that is running through leasing companies and banks. Other buyers, such as private consumers and other companies, may not want to hold BEV asset risks. But this is not a result of disliking the powertrain. It is because it is not their core business to manage asset risks. Instead, this is the business of banks and leasing companies, Engelskirchen outlined. Leasing companies are now shifting their portfolios from what was 95% internal-combustion engine vehicles towards a greater balance. By 2035, it is conceivable that these fleets will have changed massively in favour of BEVs. However, this transition brings about its own risks. ‘You do need to get your head around the different residual value and depreciation profiles of electric vehicles. It is very dynamic,’ said Engelskirchen. ‘It certainly requires additional variables to consider in your risk management.’
3D Thermal Image of Minivan Car Model||||| Government

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How AI, data and telematics are transforming commercial vehicle fleet operations

Commercial fleets have access to more accurate data, stronger system integration, and advanced artificial intelligence (AI) applications. How exactly will this improve efficiency and enhance fleet decisions? Autovista24 journalist Tom Hooker investigates. The face of global light-commercial vehicle (LCV) fleets is changing rapidly and becoming increasingly technological. Today, fleets have multiple data points, software systems and AI tools at their disposal. At this year’s Commercial Fleets Summit 2026, industry experts focused on the different ways these technologies can benefit businesses. This ranged from enabling predictive maintenance to AI-based driver coaching. However, unless developments like these actually resolve key fleet concerns, they will remain inconsequential. So, can a more connected fleet really improve on important metrics such as return on investment (ROI), productivity and uptime? Fleet productivity and the wider ecosystem For some, the future of connected fleets is about much more than the vehicle itself. ‘Today is not about having the best van. It is about having the integration of the whole system,’ explained Jeronimo Saiz, head of fleet operations at Kia Europe. ‘You need to look at not only purchasing the van, but also having the telematics, a fantastic upfit and the best financing partner. It is a huge advantage. You are going to save money with energy consumption, route planning, how and where you service the vehicle, and how you forecast,’ he added. From left to right: Ben Varey, commercial fleet expert at Nexus Communication. Jeronimo Saiz, head of fleet operations at Kia Europe. Thomas Herzog, head of key account management international, MAN Truck & Bus AG. Thomas Unger, chief marketing officer at Sortimo. Steven Schoefs, head of strategic relations at Nexus Communication For this advantage to come to fruition, fleet connectivity across the whole ecosystem is vital. Telematics partners, maintenance partners, and the vehicle itself all need to work together. However, for many, that potential is yet to be realised. ‘Most of the large fleets are not yet fully connected. We are not getting the very best out of what we could. Connectivity, together with AI, should drive savings, more efficiency and better fleet management,’ projected Saiz. Yet any advantages may not just appear in the balance sheet. With the help of AI, a more connected LCV fleet may present other material benefits. ‘When you talk about normal wear and tear, this is what I think could be the biggest advantage of AI, to reduce [unnecessary] stops,’ highlighted Thomas Herzog, head of key account management international, MAN Truck & Bus AG. ‘Yes, we make revenue in our workshops. But if we can reduce it and help to have the van only stop working once per year, then that is beneficial for all of us,’ he added. ‘What we are facing is the chance with AI to escape from routine work and daily routines to have more time and capacity to interact with customers.’ AI agents in fleets Some of the most advanced fleets are using AI to help operations. However, the effectiveness of these agents is still reliant on data from the field. ‘How do we see fleet management in the future? At the centre, there should be an AI agent that brings the data of various systems together,’ stated Fabian Seithel, associate vice president of sales and business development EMEA at Geotab. Fabian Seithel, associate vice president of sales and business development EMEA at Geotab ‘Today, data is siloed far too much. That makes it very difficult for AI to act. A lot of it depends on input. So, the future should be an AI agent acting independently but supervised by a fleet manager who sets the tone for the agent,’ he commented. A clear shift This marks a clear shift away from using multiple telematic systems and towards more unified and automated operations. ‘Telematics started with track and trace a long time ago. Then it moved to data extraction: I want to know the fuel level [of a van in my fleet] or a fault code. But now, we are in the AI-powered phase,’ Seithel said. These systems can observe, plan, act and evaluate. For fleets, this means they can identify a problem, decide what to do and trigger the next step. Seithel cited maintenance as a clear example, outlining Geotab’s analysis of data from 5.8 million vehicles. The aim was to understand breakdown patterns and engine faults, providing an actionable risk model for fleets. ‘So, we quantify the risk of breakdown, such as 50%, then a fleet can use those predictions. Some fleets are more risk averse then others. For example, maybe in December, a delivery fleet takes the risk of a 50% breakdown to get as many parcels out as possible. We cannot drive the decision, but we can quantify the risk and explain it using contextual data,’ he explained. Another use case presented was a video-based AI coach. Observing driver behaviour, the coach could give instructions in real-time. For example, it can suggest removing a distraction or taking a break. Goldmine of fleet data Some experts argued that a major issue commercial fleets face is getting concrete value from multiple data points. ‘Every fleet is sitting on a goldmine of data. The issue we have across the industry is getting the value out. That data is a challenge for us, because the industry keeps calling what we call faster clipboards,’ said Danielle Walsh, founder and CEO of Clearly. ‘Back in the day, we held a physical clipboard and wrote down what was wrong with our fleet and how it could be managed. We then moved to the electronic age, putting data into a spreadsheet or an electronic form,’ she said. ‘That moved into the connected age, with a lot of connectivity, and we created dashboards or spreadsheets in the cloud. Now, we are in the intelligence era, and we are stuck,’ Walsh stated. She highlighted that on paper, a vehicle may appear to be in an acceptable condition. Yet, once maintenance, fuel, and finance data are combined, the story can change. Perhaps the vehicle needed servicing, not replacement, for example. ‘You can do three things when you connect your data. First, you can see what drives your cost. Is it across driver behaviour, the maintenance or the asset? Second, you know when to replace the asset, not when the lease says so. Instead, drive the decision by data. Third, make decisions on data, not policy,’ said Walsh. Ultimately, better fleet data should not just confirm prior assumptions but inform what decisions are made. Tactical fleet electrification After fleet managers discover the recommended outcomes, the next step is to act. However, when it comes to electrification, there are barriers to overcome in building confidence in these decisions. ‘The fleets responsible for ordering the vehicles have environmental, social and governance (ESG) targets, net-zero targets, or regulations asking them to electrify faster,’ outlined Alfred Richard, co-founder and CEO of Nelson. Alfred Richard, co-founder and CEO of Nelson ‘However, you have an operations manager slowing down the entire process because they are afraid of the productivity loss. How do you convince managers at the head office level and site level?’ he questioned. The solution may be connected fleet software. With more transparency and openness, the gap between aspirational fleet managers and hesitant site teams could be bridged. Before making decisions, Richard argued that fleets need to simulate real-world scenarios using a digital twin. Driver profiles, charging needs and route patterns all matter. ‘Simulation is a powerful thing. When you know what is happening, when you can control your current usage, you may anticipate what comes next. Thanks to all the existing data layers, you can build a digital twin of your fleet and simulate scenarios,’ he said. This can also help avoid oversimplified fleet strategies. Richard warned that when talking about the transition to electric LCVs, there is no one-size-fits-all solution. ‘You can run scenarios on the digital twin and see what the priority is. The goal is to know your fleet’s EV suitability at a global scale, but also have information driver by driver. It is not about electrifying everyone. It is about electrifying the suitable drivers,’ he said. Connected fleets are moving into a more active and autonomous phase. Fleet managers still want control, but less clutter. Accessing actionable insights coming from one unified source will be key. Those who can achieve this will have a distinct advantage over others.
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The Automotive Update: EU reveals Industrial Accelerator Act proposal

What can be expected from the much-anticipated Industrial Accelerator Act (IAA)? Plus, an exclusive report from the Commercial Fleets Summit. Tom Geggus, Autovista24 editor, presents the Automotive Update podcast. This episode takes a look at the recently unveiled IAA and what it could mean for the European automotive industry. Also, Autovista24 journalist Tom Hooker dials in from the Commercial Fleets Summit, hosted in Brussels. Subscribe to the Autovista24 podcast and listen to previous episodes on Spotify, Apple and Amazon Music. EU reveals the Industrial Accelerator Act The European Commission has proposed the long-anticipated Industrial Accelerator Act. Central to the legislation is the enhancement of localised EU industrial competitiveness and promotion of low-carbon production methods. The IAA aims to increase local value creation and strengthen the region’s industrial base. This comes amid perceived unfair global competition and dependencies on non-EU suppliers. The act will look to boost manufacturing's share of EU GDP to 20% by 2035. However, the IAA also outlines that the EU should remain open to outside investment. A Q&A published by the European Commission highlighted that low-carbon requirements will be created for steel and aluminium used by the automotive industry. ‘Made in the EU’ standards will also apply to aluminium. Provisions will also apply to electric vehicles and their components. The proposal builds on previous EU legislation, further streamlining the deployment of clean technologies across numerous European industries. For the automotive sector, the proposal follows last year’s Automotive Package announcement. The IAA will be negotiated by the European Parliament, and the Council of the European Union, before its adoption.  Commercial Fleets Summit reveals The Commercial Fleets Summit is a two-day international event held in Brussels. It focuses on a wide range of key issues and trends impacting the global commercial vehicle sector. Several key themes have already emerged at this year’s event, centred specifically on light-commercial vehicles. These included environmental regulation, fleet electrification, plus the incorporation of connected vehicles and use of artificial intelligence (AI). In terms of electrification, discussions centred on issues surrounding charging infrastructure efficiency. ‘There is less talk about if fleets are going to electrify. Instead, it is more about how fast, and how they are actually going to achieve that,’ stated Autovista24 journalist Tom Hooker, from the event. ‘Charging infrastructure is being seen as both a bottleneck and an opportunity. You then obviously have the interaction with the electricity grid, and this is certainly emerging as a new consideration,’ he added. The event also touched upon the future for commercial fleets. Looking ahead, these could be further integrated with digital ecosystems, with brand loyalty becoming less of a factor. Instead, digital-led frameworks could become increasingly important when selecting vehicle type and brand. Additionally, technology and AI will play an increasingly crucial role. ‘I think one of the first AI use cases will be helping fleet operators to manage and reduce fuel costs,’ Hooker said. ‘This, in turn, is having a high return on investments in some other areas. One thing I think I will hear more about later, is route optimisation and energy efficiency gains.’
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The Automotive Update: What does China’s slowing EV market mean for global sales?

What is happening in China’s electric vehicle (EV) market? How much is Uber investing in autonomous vehicle charging hubs? Can Europe build its own EV batteries? Tom Geggus, Autovista24 editor, discusses these points in The Automotive Update podcast. In this episode, Autovista24 analyses China’s slowing EV market and reveals the best-selling models in the country. Plus, how has Tesla avoided suspension of its dealer and manufacturer licence in the US? Subscribe to the Autovista24 podcast and listen to previous episodes on Spotify, Apple and Amazon Music. China’s slowing EV market Globally, China accounts for 59.1% of battery-electric vehicle (BEV) sales and 70.3% of plug-in hybrid (PHEV) deliveries. But despite dominating the figures, the country saw its total EV numbers struggle in December. Figures rose by just 0.5%, according to the latest data from EV Volumes. Despite total plug-in sales increasing between January and December last year, this was not helped by the country’s PHEV market. It experienced a run of monthly declines from July onwards. One reason for this poor performance was the decline of BYD. The brand accounted for 33.3% of total EV sales in China during 2025 and dominated the PHEV market. Yet its sales were down 9.9% across the year. However, with new players entering the PHEV market, 2026 will see more brand diversification. This could help boost figures, while new BYD models will also help impress buyers. BEV sales rose by just 4% in December 2025 following a run of double-digit improvements. China’s carmakers will be hoping this is not the start of a new trend, especially if the PHEV market continues to struggle. Tesla avoids suspension Tesla has avoided a 30-day suspension of its dealer and manufacturer license in California. This follows the brand halting its use of the term ‘Autopilot’ in its vehicle marketing in the state. The Department of Motor Vehicles adopted a decision that the use of the term is ‘misleading and violates state law’. This is linked to Tesla’s use of Autopilot to describe its advanced driver-assistance systems. Uber invests in autonomous charging Uber Technologies will invest more than $100 million (€84.9 million) into autonomous vehicle charging hubs, according to Reuters. The company will deploy DC fast charging stations at its fleet depots and other locations throughout priority cities. This is expected to begin in the Los Angeles Bay Area as well as Dallas, before hitting other hubs. Uber will also work with charge point operators to establish ‘utilisation guarantee agreements’. This will support the rollout of hundreds of new chargers in cities across the world. EV charging offer in the Netherlands Leasing provider, Ayvens, has launched a new EV charging offering. Ayvens Power promises customers in the Netherlands access to over one million charging points across Europe, spanning different operators. Drivers will get real-time availability and pricing details before arrival. Meanwhile, a fleet portal will provide charging insights, cost visibility and reporting tools. The solution is due to roll out in France, Germany, Italy, Belgium, and the UK later in 2026. Can Europe build EV batteries? Yann Vincent, CEO of the Automotive Cells Company (ACC), has questioned who will make batteries for Europe’s domestic carmakers. ‘One crucial question remains: who will manufacture the batteries for European cars?’ Vincent asked. ‘Asian players, particularly Chinese giants, as is already the case for 99% of them? At the risk of putting the strategic independence of European car manufacturers solely in the hands of BYD, CATL, LG, etc?’. The CEO also confirmed that the ramp-up of ACC’s gigafactory in Hauts-de-France is taking longer and costing more than expected. This is weakening the company’s financial position. He also stated the goal of building the factory was ‘too close to give up on.’
Agent signs a contract for the purchase or Leasing of a new car. New car keys in the foreground. Dealers

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What is car financing?

Car financing is key to the automotive ecosystem. It can heavily influence how cars are bought and sold, plus, it provides consumers with multiple purchasing options. But what exactly is it? Tom Hooker, Autovista24 journalist, explains how the process works from start to finish. Finding a vehicle purchase can be difficult for buyers. Car financing allows customers to possess a vehicle without paying for its full value upfront. It converts a large, one-off purchase into a series of predictable payments. In turn, it plays a vital role in how cars are priced, sold, and managed across the automotive industry. https://www.youtube.com/watch?v=wZqEZdeIVUk Car financing simultaneously prices the value of the vehicle today and its forecast residual value (RV). It also determines the cost and risk of lending money over time. The payment method links the car itself to an agreement. This sets how the car is paid for, who takes on the financial risk and who earns money from the deal. Furthermore, it establishes when the value of the car is recovered. This could be retrieved upfront, gradually through monthly payments, or at the end of the contract. Why does car financing exist? For many consumers, tying up money in a depreciating asset may not be a desirable financial decision. Car financing solves this by spreading the cost over time. It aligns payments with consumer income, usage, and expected vehicle depreciation. Meanwhile, for manufacturers and dealers, it can support consistent demand. Customers may be more willing to buy when monthly payments feel manageable, instead of paying one lump sum. This can allow dealers to sell higher-value vehicles and avoid sales declines. It can also enable them to have more influence over what models customers choose through finance offers. From a commercial standpoint, car financing is a framework made up of different structures that allocate risk in different ways. Some finance products prioritise ownership, while others prioritise usage. Sometimes, RV risk sits with the lender, and in other cases, it remains with the customer. These RVs directly influence pricing competitiveness, profitability, and used-car market performance. Accurate RV forecasting can support lower monthly payments and healthier margins. Conversely, poor forecasting could lead to stock imbalances or value erosion later in the vehicle lifecycle. Where do finance and insurance fit in? In most retail transactions, the finance product is sold by the dealer on behalf of a finance provider. Some finance providers are captives, and others are independent finance houses. These providers supply the funding that allows dealers to present finance agreements to customers. Once a customer has chosen a vehicle, the focus shifts to the design of the finance agreement. This turns the vehicle price into a specific, personalised offer. This stage aims to bring everything together into a single agreement. The contract must meet lender requirements and comply with regulations. Clarity is particularly important, as this part of the process is often unfamiliar to customers. Ultimately, car financing can influence which vehicles sell and how often customers return to dealerships. It also plays a vital role in residual value management and how risk is distributed across the automotive ecosystem. As vehicle prices rise, financing could play an increasingly important role in shaping the automotive industry.
Car of the Year at the Brussels Motor Show 2026 Leasing

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Key highlights from the Brussels Motor Show 2026

With model debuts and the European Car of the Year award, the Brussels Motor Show is an important automotive event. Autovista24 special content editor Phil Curry presents highlights from this year’s show. The Brussels Motor Show has grown in stature in recent years. Since the doors closed on the Geneva International Motor Show (GIMS) in Switzerland, automotive brands have shifted their focus to the Belgian event. As the first automotive event of 2026, the Brussels Motor Show also provided a look at potential upcoming market trends. Talks of fresh partnerships, new brands, plus continued fleet electrification highlighted Europe’s developing automotive market. Autovista24 looks at a selection of new models and interviews the winners of the European Car of the Year 2026.  https://www.youtube.com/watch?v=IJhAc0V5cTI Plenty to see at Brussels Motor Show The halls at the Brussels Expo were packed with carmakers, many bringing new or refreshed models to display. This included the Kia EV2, a new battery-electric vehicle (BEV) which completes the Korean brand’s EV line-up. By adding a small city-car model to its range, the company can cater to many different drivers. Kia also introduced an expanded GT model range, including the EV3 GT, EV4 Hatchback GT and EV5 GT. Opel used the show to reveal the new Astra, with an improved ‘Vizor’ headlight profile. This features an illuminated badge sitting central to new lighting strips. The Stellantis Brand also redesigned the interior to make it more comfortable. Subaru arrived at the event with two BEVs, the e-Outback and the Uncharted. Both cars feature all-wheel drive, keeping the brand’s offroad credentials intact. Mitsubishi used the show to highlight its new range, as it makes a European comeback. Models included the ASX, the Eclipse Cross, the Grandis and the Outlander PHEV. With the brand working in partnership with Renault, it will be hoping to re-establish a foothold in the European market. Another brand that will be working with Renault is Ford, which confirmed two new small cars will arrive in 2028. The carmaker brought its Ranger plug-in hybrid (PHEV), alongside a mix of passenger cars and light-commercial vehicles. Central to this was a remote-control car racing track, with drivers able to race using simulation rigs. Who won European Car of the Year 2026? The Brussels Motor Show is also the new home of the European Car of the Year awards. A shortlist of seven new models was judged by automotive journalists from across Europe, with points awarded to each. This year, the Citroen e-C5 Aircross, Dacia Bigster, Fiat Grande Panda, Kia EV4, Mercedes-Benz CLA, Renault 4 and Skoda Elroq made the shortlist. Of these, judges awarded the Mercedes-Benz CLA the most points, giving it the 2026 title. This was the first time the German carmaker won European Car of the Year since 1974. The result also broke a two-year winning streak for Renault. It saw its Scenic take the title in 2023, and the Renault 5 in 2024. ‘It really means a lot to me, and also the Mercedes-Benz team, many hundreds and thousands of people who worked to make this car happen. It is a great reward to get this trophy from journalists across the whole of Europe, especially with many countries voting the CLA in first place,’ Oliver Löcher, vice president, overall vehicle integration at Mercedes-Benz, told Autovista24. ‘In some aspects, the CLA is a pivotal car. It is the first on our new compact platform, on which we will now roll out derivatives, like the GLB, which we launched at Brussels. It is also the first car with our latest generation e-drive, featuring 800-volt, high-efficiency fast charging. It is also the platform for our new MBO operating system. The CLA is, therefore, the frontrunner of a new generation of Mercedes-Benz cars,’ he added. ‘This year will see a lot of new-car launches from ourselves, making it a very exciting and busy year. But for now, we have the CLA, and I am very happy to see it win the European Car of the Year,’ Löcher concluded. Awards come to Brussels Motor Show The European Car of the Year award continues to be coveted by carmakers. This was clear in the reaction of the Mercedes-Benz team, with celebrations continuing throughout the event. ‘Even though the European Car of the Year award has been running since 1964, it is still very relevant. For consumers, today they face a lot of new technologies, and even new brands that were not heard of some years ago,’ commented Søren W. Rasmussen, president of the jury at the European Car of the Year. ‘This means they need guidance, and the Award winner, and its finalists, all help guide consumers directly to the best cars in the market. It is, therefore, very important for carmakers to have this prize,’ he added. The European Car of the Year award was a staple of the Geneva International Motor Show. But moving to the Brussels Motor Show has allowed the award to provide a full year of benefits for the winner and the finalists. Yet while the Mercedes-Benz team celebrate winning the 2026 prize, attention has already turned to the 2027 award. ‘We now start looking into the cars which can be candidate cars for the prize next year. As we walk around this exhibition, we can see already now there are some very good cars which will be definitely on the long list, and may make the shortlist for the end of 2026,’ concluded Rasmussen.
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What do fleets need to look out for in 2026?

What automotive trends have fleets navigated this year? What do these companies need to prepare for ahead of 2026? Tim Wellman, enterprise sales director at Autovista Group, answers these questions and more with Tom Geggus, editor of Autovista24. How have fleets been performing this year? What are their big takeaways from 2025? This year has been reasonably positive for fleet customers in general. Certainly, the post-pandemic supply shortages are well behind us, and new vehicle availability seems reasonable. I do see some movement in terms of who is taking market share in the fleet sector. We have seen some changes across selected fleet companies throughout 2025. But overall, the fleet sector seems a reasonably positive segment. Supply chains have been back in the news with the potential disruption of Nexperia chips, causing carmakers some alarm. Has it also concerned fleets? Fleet clients predominantly source their vehicles via OEMs. So, any manufacturer lead concerns will naturally impact fleet suppliers. Constriction on supply chains due to the Nexperia chip shortages will inevitably wash through to fleet operators. The COVID-19 pandemic was a huge lesson for the whole industry in terms of supply chains. How have fleets tried to prepare themselves for disruptions ahead? Post pandemic, we have seen significant valuation volatility, and the push and pull of supply and demand are playing their part. There certainly has been some stabilisation post pandemic, but not across all fuel types. There are still prominent spikes evident in our data when comparing battery-electric vehicles (BEVs), internal-combustion engines (ICEs) and plug-in hybrids (PHEVs). This typically varies by each European market. Fleet providers definitely have an appetite for data insights and intelligence around valuation movements. This is unsurprising given the overarching financial and regulatory frameworks mandating responsibility for the asset portfolios under their care. Fleets boosted by BEVs? Speaking of regulation, electrification has been a big deal for fleets. Do you think BEVs have provided them with positive results? What has the reality been of defleeting these models? The onward march to carbon net zero is critical, and fleets take up around 60% of new vehicle registrations across Europe. So, this is naturally going to be a BEV route to market for many consumers and businesses. Many all-electric registrations throughout Europe are driven by government grants, but also by advantageous breaks in company car taxation. This drives the adoption of cleaner, greener vehicles superbly well. However, there are some headwinds that interlace with all of this in terms of the used BEV market. While we see good numbers of all-electric registrations being driven to market by legislation, that does not exist for second-ownership. This is having a material impact on resale values that are under constant pressure. We have seen residual values (RVs) for BEVs impacted quite heavily this year, certainly in some European markets. Is there anything that fleets can do when it comes to observing those values? Every fleet operator needs to understand the month-to-month valuation movements in their asset portfolio. With the relevant insight and intelligence across those asset portfolios, fleet operators can make informed decisions on whether to extend the leasing agreements or look to remarket assets sooner. We are seeing an emerging trend among more fleet operators. They are now looking very closely at their remarketing efforts. Where it is evident, there is a disparity in resale values across European countries. It may be the case that a given tranche of vehicles may afford a better remarketing price in a neighbouring market. So, being acutely aware of valuation trends across borders, particularly throughout Europe, is really important. If you are seeing potential BEV losses in France, for instance, you may be able to mitigate some of those losses by remarketing in Germany or Spain. Attentive fleet managers are looking to those neighbouring markets to optimise their remarketing revenues and alleviate unplanned losses. New brand boom for fleets? Europe has seen the entrance of new brands over the last few years. Are these newcomers going to see a spike in fleet purchases given their affordability and advanced technology? Or are established brands going to hold firm? We know some of the Chinese brands coming to market are doing so very professionally, with some fantastic products. These products will naturally challenge some of the established, traditional OEMs. There are only so many consumers and businesses across Europe that are going to purchase cars. This means there will be fluidity in which brands these people gravitate towards. One thing that will always remain fundamental in the fleet, finance, and leasing sectors is the importance of both RVs and cost new prices. A strong brand with robust RVs is better positioned to compete across European markets, standing firm against other OEMs. Ultimately, list price and RVs are critical factors that drive competitiveness and long-term performance. One technology we have seen become increasingly prevalent is advanced driver-assistance systems (ADAS). Are fleets demanding this kind of technology, or is it just an added cost? There is an important balance to consider here. As a responsible employer, there is a duty of care owed to company car drivers and vehicle owners. Providing a vehicle equipped with ADAS not only supports that duty of care but also demonstrates a commitment to protecting employees in the best way possible. While there may be additional costs associated with this, the value of safeguarding employees while they are on the road representing the business is significantly greater. Health and safety considerations within fleet management are central to this approach. Enhancing vehicle safety features remains a key component of responsible fleet operations. How can fleets prepare for 2026? What do you think are the biggest challenges for fleets in 2026, and what are the greatest opportunities for them? In terms of the biggest challenge, we are seeing a huge uptick in BEV fleet adoption. We have already discussed the value volatility of used BEVs. We have also got new battery technologies and competitive entrants coming to market. There will always be some downward pressure on older batteries being surpassed by newer technology. We will also see positive adoption of challenger entrants. The RVs of all-electric models will continue to come under pressure in the foreseeable future. With that in mind, this will certainly be one of the biggest challenges for fleet companies in 2026 and potentially for years to come. The biggest opportunity in these scenarios is being as agile as possible; Looking at new strategies for remarketing these BEVs and ensuring that any fluidity in those residual values is managed in the best way possible. I think fleet companies that are agile, reactive and keep a very close eye on what is going on in the market will fare best.
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How are the latest EV battery developments impacting automotive fleets?

From repair to solid-state advancements, electric vehicle (EV) batteries are a complex equation for fleets. How can these businesses better understand and work with the technology? Autovista24 journalist Tom Hooker assesses the latest battery advancements. The battery-electric vehicle (BEV) share has grown across Europe this year. In major new-car markets such as France, the fleet sector is a driving force behind electric registrations. Fleet-oriented incentives have helped encourage uptake, as in Germany. This shift makes it vital for those in the sector to understand the batteries powering their vehicles. In turn, they can make smarter purchasing decisions, optimise maintenance and retain the highest profit margins when defleeting. Cloud-based battery management Digital battery health certificates and data can provide clarity for both private consumers and fleets. It can also help increase transparency, streamline remarketing and maximise residual values. From February 2027, EV batteries sold in the EU must have a Battery Passport. The digital identity will be similar to a vehicle logbook, where battery charge cycles, energy efficiency and degradation trends must be included. How can fleets stay informed until then? One solution is a cloud-based battery management solution that supports the resale of EVs. ‘Together as leaders in mobility and technology, we have the unique opportunity, especially for EVs, to use remarketing and the right point of resell to make not only a transaction out of it but make it a data-driven business model,’ outlined Christiane Soppa, director of business development at Bosch, at Fleet Europe Days. Bosch conducted a pilot programme together with European mobility and car rental company Drivalia. This involved monitoring the data of approximately 100 vehicles between January and June 2025. ‘The heart of an EV is the battery. So, we took the heartbeat of the EV and put it online. The target was to take away the EV friction we have in remarketing. We looked at stress factors and anomalies based on very simple data,’ explained Soppa. Drivalia CEO Roberto Sportiello. From transaction to database There are three steps to the process. Once the EV is connected, data can be collected. Bosch was able to track battery temperature, voltage, charging behaviour and driver usage. This provided a real-time picture of the power-storage unit. Second, a cell-by-cell digital twin of the battery was created in the cloud. This combined AI machine learning with data taken from 150,000 vehicles tracked by Bosch worldwide to regularly review its algorithm. Third, the system detected anomalies and any battery issues. ‘The twin can completely monitor the battery. By spotting issues very early, you can redesign the right point of resell. We take the battery measurements, the state of health and anomalies before the decision point when you sell the car, not afterwards,’ she stated. ‘That is turning remarketing from a transaction to a database strategy. As a fleet manager or a leasing company, this is changing everything, because you suddenly get into the driver's seat,’ Soppa continued. Bosch was also able to produce a certificate at any time, revealing driving behaviour, anomalies, and charging history. ‘You could even use this data to discuss with your clients early, to change their behaviour. Decision making is not a best guess or dependent on lifetime and mileage anymore. It is based on data. What we see from all the pilots we did in the past years, in Bosch and all the data we have, sales can be boosted by up to 4% on average for resale,’ she commented. However, Soppa highlighted that this requires monitoring of the battery to optimise the point of resale. ‘This is a very important digital platform that will permit the company more in the future to retrieve and collect data from the fleet, and let the company adjust it as best as possible,’ highlighted Drivalia CEO Roberto Sportiello. Is battery repair the solution? While Bosch’s tool can be used to boost resales, another way to maximise profit margins within a fleet is to reduce maintenance costs. So, what options do fleet managers have in this instance? According to Gablini Automotive Group, the cost of repairing a battery pack is around 80% lower than replacing it. This makes battery repair more financially attractive while supporting circular economy goals. ‘To be sustainable, we cannot throw away a 10-year-old vehicle. We should keep it on the road. Because, if we throw it away, the environmentally friendly behaviour of EVs will not be there anymore,’ stated Daniel Pataki, general manager of Gablini Automotive Group, at Fleet Europe Days. Gablini Automotive Group general manager Daniel Pataki. ‘The question is if we can repair the battery packs in case of any failure, because OEMs are not interested in selling battery packs. They are interested in selling new vehicles,’ he said. Pataki explained how demand for battery repair is growing. As old EVs are getting cheaper, people are beginning to use them as an entrance point to the EV sector. However, he highlighted that an EV with a faulty battery has a resale value of close to zero. Repair constraints Pataki presented a diagram of a dismantled EV battery pack. He explained that if one cell has a lower voltage than the rest, this affects the entire battery’s performance. By replacing the module containing that cell, the EVs' range will improve. The battery management system and thermal management system can also be replaced. ‘If one sensor gets broken in a battery pack and you cannot repair it via the OEM, you should replace the battery pack due to the fault of a €10 sensor. This is not sustainable. You should be able to repair this,’ said Pataki. However, he explained that there are some constraints. There are still no standard criteria for technicians looking to repair high-voltage batteries. Pataki said that OEMs do invite technicians to their headquarters to get a certificate. ‘According to our experience of more than 12 years, 85% of faulty battery packs were economically repairable. That means only 15% of the battery packs coming to us needed to be replaced,’ he noted. Pataki pointed out that buying parts from the OEM will mean reduced margins compared with individual battery repair. For a 14-hour job, a profit margin of around 40% to 60% can be achieved Pataki calculated. He highlighted that the solution opens up profit potential within the after-sales process. ‘You will provide sustainability. You will gain customer satisfaction because all customers will come back to you for battery repair. We can reduce waste, we can extend the lifespan of vehicles, we can have high-margin jobs in the workshop, and we can make the customer happy,’ outlined Pataki. Battery market domination So, the fleet sector needs to be aware of current battery developments, such as real-time data analysis and battery repair. However, it is equally important to know what to expect in the future. Currently, the EV market is dominated by lithium iron phosphate (LFP) and nickel manganese cobalt (NMC) batteries. From January to August 2025, these two chemistries accounted for over 90% of the megawatt-hours installed across the global passenger car market, according to EV volumes data. However, the market’s composition could change over the next few years. Mix and match approach ‘What we see is quite a detailed chemistry layout. In the US, you have the nickel cobalt aluminium (NCA) component that is mainly used by Tesla. While in Europe, you have NMC batteries. In China, you have the majority of vehicles or batteries that are LFP batteries,’ said Octavian Chelu, advisory director at Frost&Sullivan at Fleet Europe Days. ‘You might think the picture is quite clear. The US, Europe and China use a certain technology. It is not that easy. When we look towards the future, what we see happening mainly is the fact that carmakers are going to match certain batteries, technologies and chemistries depending on the type of vehicle and its use, he added.’ ‘Carmakers are going to try to mix and match from now on. This is something that is going to be keeping revenue from the remarketing business because it needs to juggle very well between different types of technologies, different battery markers, the degradation of those batteries and how much the residual value is going to be impacted by all of that,’ Chelu explained. ‘We have NMC and LFP; those are the main two technologies being used today. However, we also see a lot of heavy research and development, encouraged by all major governments worldwide, because they want to break dependencies,’ Chelu highlighted. ‘We are trying to find alternatives, so that our batteries and our vehicles are not going to be dependent on one source,’ The next battery technologies Chelu explained that sodium-ion batteries are the next technology being tested. In China, the first vehicles using this technology have already been seen. There are also solid-state batteries in development. However, he believes both chemistries will not completely wipe out LFP’s market share. ‘We are still going to be dependent on precious materials for quite a while. There are pluses and minuses with all these new technologies,’ he said. Chelu estimated that in the future, sodium-ion batteries are likely to be 30% to 50% cheaper than their LFP counterpart. They also perform extremely well in cold temperatures. This means vehicles using the chemistry can have better charging cycles. However, sodium-ion batteries have a lower energy density than LFP units. So, models using the chemistry instead of LFP on a like-for-like basis will have less range. Yet, this does mean the emerging technology is slightly safer, due to it being less reactive. Chelu noted the emerging technology could be well-suited to last-mile deliveries, but less so for long-range vehicles. Meanwhile, solid-state batteries are safer and more stable than LFP ones, with no flammable liquid electrolyte. Chelu also pointed to a higher energy density, enabling longer distances and faster charging. However, the new technology will be much more expensive to begin with. ‘Sodium-ion is the next to come in line, not to replace LFP batteries, but as a new technology. Solid-state batteries are not going to happen before 2028 and probably will be fully commercial by 2030,’ Chelu concluded.
Smart driving Dealer

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How are AI and automation transforming automotive remarketing?

Today, nearly every business is using artificial intelligence (AI) and automation in some form. The automotive remarketing sector is no exception, with efficiency and data-driven decisions key to fleet efficiency and profitability. Tom Hooker, Autovista24 journalist, reviews its current applications and future impact. As AI continues to develop, so too do the use cases within the automotive industry. From production to in-vehicle applications, logistics to fleets, there are many applications for the technology. Automotive executives anticipate big things from AI, even within the next three years. The technology is expected to increase the perceived value of products by 22% and the value of digital services by 37%, according to IBM. This acceleration in automotive AI applications underlines the industry’s push for smarter, more connected, autonomous, and software-defined vehicles.  Carmakers are partnering up with AI specialists to maximise their knowledge and potential in this field. These collaborations include Hyundai Motor Group and Nvidia, Stellantis and Mistral AI, and Volkswagen Group and Amazon Web Services. Unsurprisingly, AI and automation also present key growth opportunities in the remarketing sector. This involves reselling used vehicles, typically owned by businesses or fleets, through wholesale channels. This often occurs before hitting the retail market. In this space, AI can enable predictive pricing, automated inspections, automatically adjusted inventory management, and automatic sourcing. These tasks help to maximise turnaround speed and recovery value, two of the major goals in remarketing. So, how are remarketing companies currently using AI, what benefits are they seeing, and what could the future hold? AI sourcing To benefit from high resale margins and fast-turning stock, the right amount of quality vehicles must be quickly sourced. ScaleVoice and AURES Holdings are already using AI to source vehicles and improve response times. From left to right: Mike Allen, AURES Holdings member of the supervisory board. Martin Rezab, ScaleVoice chief revenue officer. The two companies presented their Voice AI solution at the Fleet Europe Days. The AI agents can reportedly handle outbound and inbound calls, schedule trade-ins and update systems in real time. Voice AI conducts proactive sourcing to find hidden opportunities in the marketplace. It grades adverts by predicted profit margin, stock turn and competitiveness, such as targeting private sellers with price drops. The solution can then contact the seller and schedule dealership appointments. It also uses reactive sourcing. This means responding to incoming web form leads in under 30 seconds to catch customers in a selling mindset. Unlike a human agent, the AI can do this anytime on any day of the week. The insights gathered can then be used for future marketing and sales operations. In a 60-day test that compared human agents to Voice AI, the latter generated 7,277 appointments. This returned a 49.2% conversion rate. ‘We had a round robin of leads, one half of the leads went to us [Voice AI], and the second half went to people, and they measured the volume of people that showed at branches. We outperformed people by two percentage points,’ highlighted ScaleVoice chief revenue officer Martin Rezab. How to automate at scale Other companies in the remarketing and leasing space are building AI-first cultures. One of these is the car leasing service Lizy, which has embedded automation steps into multiple processes. A quarter of Lizy’s remarketing workload is handled without human intervention, with AI performing over 45,000 actions every month. This includes tasks such as pricing and workflow optimisation. New processes are automated across the company weekly. For example, its paper mail and email workflows have been automated, freeing up time for employees to work on more challenging tasks. ‘We have two types of companies today. We have companies that are writing emails and recording meetings with AI. Then, you have companies that are actually fully automating their back-end processes with AI,’ explained Lizy CEO Sam Heymans. Sam Heymans, Lizy CEO. ‘It is fine if you are in that first category today, but if, in five years, you are still only doing that, I think you will really suffer. I think for the leaders of our industry, we should make sure that we adopt AI and embrace it, because it will be shaping the future of automotive,’ he added. AI inspection An essential part of the defleeting process is inspecting vehicles. This can determine residual values and sales channel selection, while reducing risk by identifying damage, wear or missing equipment. However, this can be a particularly time-consuming process, especially for fleets processing hundreds or thousands of cars at once. Automated inspection tools can help by reducing lead times and improving accuracy. From left to right: Marina Picard, Stellantis head of supply chain, business unit pre-owned vehicles. Bertrand Chataing, Autobiz Group chief sales and development officer. Carcheck.AI, developed by Stellantis and Autobiz Group, can use a smartphone camera to create a digital scan of a vehicle. In just a few minutes, it calculates the costs of reconditioning the model before resale. According to Autobiz Group, the system is already being tested at Stellantis fleets in Hordain, France and Madrid, Spain. It is expected to save up to three weeks in the vehicle resale process. Automated fleet workflow system BCA Europe and Alphabet International displayed another example of automation at the Fleet Europe Days event. The pair demonstrated a fleet workflow system integrated into an auction platform across European markets. From left to right. Tobias Münch, BCA Europe chief commercial officer. René Lorr, Alphabet International head of international operations. The solution optimises fleet visibility across logistics, pricing, sales, and post-sales. In turn, delivering detailed information, a smooth buyer experience, and fast vehicle remarketing. Real-time tracking is also possible, meaning shortened delivery times, improved operational control, and boosted stock rotation. ‘It has been deployed in nine markets. It consists of two main components. One is the workflow system, and that covers the process over the entire vehicle lifecycle. The second one is the auction platform,’ outlined Alphabet International head of international operations René Lorr. ‘We found a way to build up every unified process into one single workflow. I think it is the backbone of the remarketing process by Alphabet, because this system connects the people, the data and the processes together, and it brings it to a very efficient and value-driven system,’ concluded BCA Europe chief commercial officer Tobias Münch.
Podcast mic graphic| Leasing

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The Automotive Update: Fleet Europe Days and a possible semiconductor crisis

What are the major themes from the Fleet Europe Days event? Could a new semiconductor crisis be brewing? How long did Italian electric vehicle (EV) incentive funding last? Tom Geggus, editor of Autovista24, discusses the week’s news in The Automotive Update podcast. In this episode, Autovista24 journalist Tom Hooker discusses his time at one of Europe’s biggest fleet events. Then, as the industry prepares for a potential semiconductor crisis, the importance of Nexperia chips becomes apparent. Finally, understanding the popularity of EV incentives in Italy. Subscribe to the Autovista24 podcast and listen to previous episodes on Spotify, Apple and Amazon Music. Important topics for Fleet Europe Fleet Europe Days took place in Luxembourg this week. It included a thought-leadership conference, exhibitor displays and the opportunity to test drive vehicles. There were 84 exhibitors over the two-day event, including carmakers, fleet, leasing and rental companies, technology start-ups and giants, EV charging providers and more. Many of these companies were also involved in the conference area, discussing key automotive trends. Two big topics covered were AI and software. One remarketing presentation focused on vehicle inspections and how the process can be automated with AI to improve processing speed. Another showed how an automated fleet workflow system can be integrated into an auction platform. Other themes included sustainability and ESG, distribution models and gender diversity. Overall, the conference highlighted how complex the automotive industry is becoming. This makes it crucial for those within the sector to understand it from all angles.  A semiconductor crisis for Europe? Several carmakers have highlighted concerns with vehicle production due to a disrupted supply of semiconductors from Nexperia. Volvo, Volkswagen, Honda and Nissan have all discussed the possibility of temporary production pauses, the Guardian has reported. This follows the Dutch government taking control of the Chinese-owned chip company last week. Hildegard Müller, president of the VDA, recognised Nexperia as a major supplier of semiconductors. These components are used in electronic control units for vehicle electronics systems, alongside other relevant industries. ‘The situation could soon lead to significant production restrictions, or even a stop in production, if the interruption of Nexperia chip deliveries cannot be resolved in the short term,’ she commented. Italy’s new incentive scheme This week, the Italian Government launched an incentive scheme to help boost zero-emission mobility in the country. When scrapping an older internal-combustion vehicle up to the Euro 5 standard, private buyers could receive up to €11,000 towards the purchase of a new electric car. Meanwhile, small businesses were eligible for up to €20,000 off an electric light-commercial vehicle. This scheme was backed by €595 million, with some funds supplied from the National Recovery and Resilience Plan. However, the funding lasted just over 24 hours before being exhausted. A total of 55,680,000 vouchers were generated, reserving all of the subsidy funds, according to the ANSA news agency. One reason for this quick depletion could be that applications had to be submitted before the new vehicle was purchased. However, any funds that become available again will be reactivated for new applications. Editor's note: article has been updated. According to ANSA, 55,680,000 vouchers were generated, not 55,680 as previously stated.
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The road ahead: Residual value trends and the next market shift

A tense and uncertain economic environment is increasing pressure on Europe’s automotive market. But how will this affect residual values (RVs)? In a new webinar, Autovista Group experts discussed emerging trends and used-car impacts with Autovista24 journalist, Tom Hooker. RVs across Europe have continued to decline in 2025, amid falling used-car prices and an unstable economic environment. Meanwhile, powertrains are seeing varied performances, with one particular technology providing a surprise. But is this decline expected to continue into 2026? Autovista Group’s latest webinar, The road ahead: Residual value trends and the next market shift, answered this questions. The panel featured Dr Anne Lange, product director, valuation apps at Autovista Group, Robert Madas, regional head of valuations (DACH and CEE)​ at Autovista Group and Javier Salgado, director of valuations and forecast experts at Autovista Group. https://www.youtube.com/watch?v=o9ZEJQtcbHk European market faces uncertainty In the first half of 2025, Europe’s economy appeared to be stabilising after a period of stagnation. However, Lange showed how both inflation and the consumer price index have risen. This is mainly due to ongoing geopolitical tensions and conflicts. These trends have hurt the automotive industry. Stagnating economies have led to affordability issues and reduced investment. Additionally, ongoing tariff negotiations have caused delays in investment and supply. There has also been a market push for more affordable battery-electric vehicles (BEVs). Meanwhile, the market has seen battery technology become cheaper and more efficient. ‘We are in a phase of a lot of technological challenges. We have a massive electric vehicle (EV) push that is putting pressure on manufacturers to become more profitable,’ Lange noted. Furthermore, used-car prices are still dropping, albeit at a slower rate. This is despite an apparent stabilising trend in the first half of 2025. Yet, the uncertain economic environment was just one factor affecting this decline. Residual value decline expected RVs presented as a percentage of new list price (%RV) in most of Europe’s major used-car markets have continually fallen. However, the pace of this descent has now slowed compared to previous years. Madas explained that this year, %RVs remain well under 2024 levels. They are also under those recorded in 2023, 2022 and 2021 when %RVs were greatly inflated. This can be seen as a continuous market normalisation following the COVID-19 pandemic and the supply crisis. Specifically, there is growing pressure on three-to four-year-old vehicles. This age group has seen an increasing number of stock days and price changes over the last few months across all powertrains. BEVs still sell the slowest and record the highest amount of price changes in this age group, followed by plug-in hybrids (PHEVs). Overall, pressure on %RVs is forecast to remain across Europe’s major used-car markets in 2026. In particular, passenger cars at 36 months of age and above will be affected more than younger vehicles. ‘The market outlook for 2026 is still negative. We expect some more adjustments, but at a slower pace,’ Madas stated. Increasing market pressure Madas then showed how %RVs for vehicle age groups have developed differently over the last four years. The youngest used vehicles have seen %RVs reach 2021 levels in many markets. This has been caused by supply exceeding demand. Meanwhile, %RVs of cars aged 36 months and above are still relatively high. There is significant room for correction, as supply levels are expected to return in this age group. This is due to recovering new-car registrations in 2023, following particularly weak years in 2021 and 2022. Madas broke %RVs down by powertrain, where he noted that BEVs have struggled. Meanwhile, PHEVs have performed significantly better. In some markets, such as Germany, younger PHEVs have developed better than BEVs, causing the gap between the two technologies to widen. This overarching trend in Europe is caused by differences in supply. PHEVs have considerably smaller volumes in the used-car market and can be better absorbed by current demand than BEVs. Finding the fleet recipe However, Salgado pointed out that these trends do not necessarily translate directly into individual fleets. ‘Most market changes are already included in our forecast values. Ideally, reforecasts should stay quite stable, which would show that our assumptions were accurate when we first forecasted the value of the vehicle,’ Salgado commented. With most leases in Europe lasting around three and a half years, the first forecast is completed long before the car reaches the used market. When conditions change, such as demand or stock levels, forecasts are updated to include those new elements. Salgado then presented two artificial fleets of around 10,000 vehicles in Spain and Germany, with analysis completed in each quarter. The %RV of both fleets remained stable over the last year. The Spanish fleet saw the biggest change, with a small 0.5 percentage point decline. He highlighted that every fleet is unique. Even in one country, results can change depending on the powertrain or brand perception. Salgado also showed that while PHEV %RVs have provided a surprise, they are evolving similarly to petrol and diesel models in some fleets. Moreover, in this artificial fleet, full-hybrid values saw a comparatively larger drop at the end of the lease contract. This is despite the technology maintaining the highest %RVs of any powertrain in Europe. Enjoyed The road ahead: Residual value trends and the next market shift? Then sign up for Autovista Group’s next webinar: Global new-car market outlook 2026. It will take place on 25 November 2025 at 09:30 BST / 10:30 CET. Register for your place today.
Graphic showing vehicle depreciation| Insurance

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What is depreciation?

Vehicle depreciation affects every part of the automotive industry, providing clarity on profitability and financial risk. But how can this be used to benefit both companies and consumers? Tom Hooker, Autovista24 journalist, explains. From manufacturers planning models, to customers collecting a car, and businesses devising fleet strategies, depreciation is central to understanding value. It means buyers and sellers can get to grips with how much money a vehicle may lose. How is it calculated, where does it tie into residual values (RVs), and what makes depreciation such a crucial topic? https://www.youtube.com/watch?v=DEp0a1BfOI4&feature=youtu.be Understanding depreciation Depreciation is the amount of value a car loses over time. This can be calculated by subtracting the absolute RV from the new list price. The absolute RV represents the car's monetary value after a defined time and mileage. For example, a car may cost €40,000 brand new. After three years and 60,000km it might see an absolute RV of €18,000. This means a depreciation rate of €22,000, or 55% of its list price. Importantly, the rate of a car’s depreciation is not linear. Cars lose value more rapidly in the years following registration. This rate of decline then slows over time. However, depreciation is not the same for all cars. Factors such as age, mileage, powertrain, competitors, condition, design, service history, reliability, warranty length, fuel economy, owners, and volume can all affect depreciation. Understanding depreciation is beneficial for sellers and buyers. Sellers can better calculate financial risks. Fleet, leasing, and finance companies can decode the biggest points of depreciation and try to minimise their losses. Meanwhile, buyers who focus on cars with lower depreciation rates will take on less financial risk. This can mean getting more money back at the point of resale. Mainstream versus premium For example, comparing two compact crossover SUVs, one premium and the other mainstream, reveals the different rates of depreciation. The exemplar premium model has a list price of €55,900. After two years and 40,000km, it holds on to 58.4% of its list price, or €32,650 in absolute terms. Meanwhile, the mainstream model has a much lower list price of €43,050. However, it also retains less value at 49.8% or €21,450. While the premium model loses €23,250 after two years, the mainstream model loses €21,600. So, even with the premium car’s higher percentage and absolute RVs, its depreciation is still comparatively higher. However, if the mainstream model had a worse rate of value retention, it could indicate a desirability issue. How is depreciation used? Carmakers can compare the depreciation of one of their more luxurious models to a compact car or a direct competitor. However, this does not provide the full picture, as the two vehicles may have vastly different production costs. Understanding depreciation is also vital for fleet and leasing companies. It helps these businesses compose their fleets, with lower levels of depreciation meaning less loss. Finance companies and banks also use this metric. With accurate depreciation forecasts enabling risk and price assessment, they can manage interest rates and risk premiums accordingly. In summary, depreciation is the counterpart to residual values. It gives another lens into used-car performance, depending on the strategic focus of the company or individual.

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