The worst new vehicle supply problems in a generation are causing the fleet industry huge problems, including sky-rocketing daily rental rates and lead times that are the longest in living memory.

Fleet Evolution founder and managing director Andrew Leech

So says Andrew Leech, founder and managing director of EV salary sacrifice and fleet management specialist Fleet Evolution, who describes the current situation as “the worst I’ve known in my 20-plus years in the automotive industry”.

Leech said that the sector was seeing a very limited supply of certain EVs with longer and longer lead times, due mainly to the global shortage of semiconductors but also the impact of the war in Ukraine on parts manufacture.

And while turning to rental suppliers to fill the gap while waiting for a new vehicle for a customer is usual practice, the sector is seeing unprecedented increases in daily rental rates – which are as much as £950 a month – and lead times.

Leech explained: “We work with most of the major rental providers and they are putting their rates up by as much as 60% on all plug-in hybrids and battery electric cars.

“Rental lead times are going from hours to days and even weeks in some cases. It’s a case of supply and demand and, with very limited supply, suppliers are increasing prices by levels I would not have thought possible only a short time ago.”

“There is no easy solution to any of this,” he added. “At Fleet Evolution, we are in favourable position because of the way our salary sacrifice schemes are set up and the fact that we self-insure.

“That means that when an EV comes back from a customer for reasons such as redundancy or leaving the business, we are able to reallocate it to another driver, even at another customer.

“This is not the case with some of our competitors whose insurance cover means they have to sell the car when it’s returned to them. We are able to retain returned cars, even though we could probably sell them at a profit because of the way resale values have risen, and pass them on to our customers who are desperately waiting for new EVs.”

Leech said that, despite the problems, Fleet Evolution was enjoying a ‘frenetic sales period, the busiest in the last 10 years due to high demand for electric cars.

“We have had to take on extra office space and more staff to cope with the rising demand as more organisations look to switch to electric vehicles. Our frustration is that, because of these once-in-a lifetime supply issues, it is taking longer and costing more than we would like to meet that demand,” he finished.