Market evolution: Stéphane Renie on ALD’s EV plans

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ALD Automotive’s head of CSR, Stéphane Renie, sets out the company’s plans for dealing with a growing electric vehicle parc.

ALD Automotive’s head of CSR, Stéphane Renie

How important has the EV market become to ALD in recent years?

Vehicles that are in some way electrified have become a sizeable part of the business. Some 9% of the new contracts generated in 2018 were for greener vehicles, ranging from hybrids to pure electrics. By the end of the year, we had more than 100,000 vehicles that were either battery electric, plug-in or traditional hybrid. Already in volume terms it is quite significant – we have 1.6 millions vehicles, so 6% of the running fleet – and the share is increasing.

How do you anticipate EV numbers to change in the future?

For 2019, the evolution of the EV market will be similar to previous years, but we see a real breakthrough from 2020 onwards. It’s difficult to say what the mix will be, but in the context of EU CO2 targets, we will have a situation where much more production volume is available and because product scarcity is a factor today, this will be changed from Q4 this year and through 2020.

I can’t commit on what the market might look like, but our target is that by the end of 2020 to reach 200,000 green vehicles under management.

How have your customers responded to the changing vehicle market with EVs?

It’s fair to say some customers have been a bit lost in this transition period. There is complexity in the decision-making process in terms of the ‘right’ technology to choose. Taxation is changing, technology is evolving and the enforcement of WLTP has brought about a lot of disruption. There are a lot of questions from consumers but also a lot of interest and a determination to go greener.

There are some use cases that are the perfect fit for EVs and each company has the potential for a sizeable amount of their fleet to be electric. From our side, we have to have the right products, services and consultancy to accompany that process and help our clients make the right informed decisions.

What are the biggest challenges with such a big change to the automotive landscape?

The main challenge is to address each and every part of our value chain and to see if they are compatible with electric vehicles. All the way from residual

value settings, through consultancy capabilities to how we procure and remarket used cars – we must ensure the offers are EV-compatible and recognise the opportunities that come with EVs.

For us as a leasing company, the elephant in the room is RV setting, which is very difficult for conventional cars, let alone EVs. But we need to offer a one-stop-shop that goes well beyond contract hire or long-term rental – and also include charging capabilities, reimbursement of electricity taken at home, an app that provides route planning and charge points, etc.

What changes have you made to your product offering to reflect the increase of EVs and hybrids?

There are two main angles, the first being an augmented full service offering that includes home and office charging and EV specifics that are not present in the package for a diesel car. These specifics include the right partnerships with charge point operators or e-mobility service providers for the package, as we are not going to start producing electricity or wall boxes any time soon!

The second angle is specific products that we call EV enablers, such as ALD Switch, which is already running in three markets. The idea is to have an EV as a company car most of the time, but also provide access to a traditional ICE vehicle for up to 60 days a year when

you want to go on holiday or need to undertake a long journey. Everything is bundled into one monthly payment. That specific new offering is something that removes some of the range anxiety that people experience.

How do you manage the demands and requirements of different global markets?

Our EV fleet is concentrated in fewer than 10 markets, including Norway, the Netherlands, France and Italy. We are looking to move all markets towards electrification but with a strong focus on western Europe where you have the most relevant combination of an EV-friendly taxation environment, the relevant product offering from OEMs and reasonably high purchasing power from the clients.

Things are moving very quickly: in Spain two years ago, nothing was happening. But then there were driving restrictions in Madrid and new taxation rules and things changed.

What can customers expect with regards EVs in the future from ALD?

Consultancy and change management is going to be a big area for us. Electrification is a long and complex journey for our customers because it involves a lot of internal decision-makers. Our role is to be able to accompany our customers on that journey with the right skills and capabilities and tools. That is a very important part because if we assume that the choice is obvious and it will happen automatically with the right taxation, there might be a few headaches and delays along the way.

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