Leasing buoys EV truck market amid resale uncertainty
EV leasing increased 88% through Q3 2024
Leasing models are forging a more viable path to EV truck adoption as traditional financing is hindered by higher upfront costs and uncertainty over residual values.
An EV truck typically costs more than twice a comparable diesel truck. A new Class 8 EV, for example, may cost more than $400,000 while a comparable diesel costs about $180,000, according to the American Trucking Association.
Purchasing an EV would not be possible for many fleet owners without state and federal incentives, but President Donald Trump has suggested eliminating some subsidies.
As EV affordability remains a hurdle, leasing is one way to mitigate risks for both lenders and fleet owners, especially since small fleets account for roughly 85% of the industry, Lisa McGhee, zero-emission vehicles programs and affairs manager at Santa Fe, Calif.-based dealership Tom’s Truck Center, told Equipment Finance News.
“Yes, leases are solutions,” she said. “The OEMs need to take something up front and be the lessor in the deal. Or maybe they find a partnership with the dealer and a finance company. We have to do more than the average sale, because the price right now is too unaffordable. And when you take the 85% population [of small fleets], you’ve got an issue.”
A fleet of less than 15 trucks is generally considered small, according to commercial vehicle manufacturer GM Envolve.
Short-term leases also allow fleet owners to determine if EVs are right for their businesses before making the long-term financial commitment, Tom Gmahle, manager of van and fleet finance at Mercedes-Benz Financial Services (MBFS), told EFN last week during Work Truck Week 2025 in Indianapolis.
“Not a lot of customers want to own [an EV] right now,” he said. “So, we’ve shifted to leasing. If you could do a short-term lease for 12, 13 months and then just turn it in and walk away, I think that’d be more palatable for the customer.”
MBFS has seen an 88% lease penetration for its commercial EV sales so far this year, Gmahle said.
Lack of resale data drives demand
EV leasing volume increased 88% over the first nine months of 2024, according to data analytics firm J.D. Power.
EV truck leasing is becoming more popular partly because of residual value uncertainty, Jim Castelaz, founder and chief technology officer at Foster City, Calif.-based Motiv Electric Trucks, told EFN at the event.
“I think when customers are looking to finance these trucks, maybe they’re looking at a lease structure where it’s a lower residual at the end of the lease, primarily because there’s not a strong secondary market of used electric trucks yet,” he said. “We’ve certainly seen fleets take advantage of leasing structures to make it a little bit easier.”
Conventional lending could increase once the used EV market becomes more robust and lenders are able to better price residuals, Castelaz said.
The third annual Equipment Finance Connect at the JW Marriott Nashville on May 14-15, 2025, is the only event for both equipment dealers and finance providers. Learn more and register here.
