The global car leasing market is poised for significant growth, with a projected compound annual growth rate (CAGR) of 15% between 2025 to 2034, driven by rising demand in urban areas and the rise of smart city initiatives.
Despite facing challenges such as regulatory changes and uncertain economic conditions, the market is buoyed by technological advancements and a rising demand for mobility solutions. Over the next decade, key trends are expected to include a surge in electric vehicle (EV) leasing due to environmental concerns and government incentives, as well as the growing popularity of subscription-based and flexible leasing models.
JATO’s industry experts Helen Fisk, Head of Leasing, and Jesper Rolink, Head of Leasing Sales, have over 35 years of knowledge combined. In this article, they share their perspectives on the key issues and trends that are evolving the industry now, as well as predictions about the future.
Challenges for 2025
One of the most pressing challenges for the industry is the push towards net zero emissions. Helen Fisk highlights the difficulties posed by the low residual values (RVs) of electric vehicles (EVs):
"The push for reaching net zero, coupled with the low used values of EVs, is probably the biggest challenge [facing the leasing industry]. Manufacturers have reduced prices to push EVs, leaving leasing companies on the wrong side of the residual values (RVs).
“Additionally, low consumer interest in EVs affects used vehicle values, making it difficult to balance profitability with net zero targets. Dispelling myths about EVs could help increase consumer uptake."
Jesper Rolink echoes these concerns, noting that "the most significant challenges include navigating the transition to EVs, managing residual value risks, and coping with economic pressures such as inflation and rising interest rates. The industry must invest in flexible leasing models, enhance risk management strategies, and collaborate with stakeholders to stabilise supply chains."
Technological shifts
The rise of digitalisation, data-driven decision-making, and connected vehicles is transforming the way leasing and fleet companies operate. As Fisk points out, "businesses and consumers now expect to access information on demand, online, rather than through traditional methods. This shift necessitates that leasing companies have data readily available to meet these expectations."
Rolink adds that "digitalisation enables real-time fleet management, predictive maintenance, and personalised customer experiences. Data-driven decision-making enhances operational efficiency and customer satisfaction, while connected vehicles provide valuable insights into usage patterns, allowing companies to offer more tailored and flexible leasing solutions."
While autonomous vehicles are still some way off from full commercial viability, both experts agree that elements of autonomy will continue to increase. Fisk notes that "key factors, such as handling insurance risk, need to be resolved before full autonomy can be achieved." Rolink suggests that "businesses should invest in understanding regulatory landscapes, collaborate with tech providers, and prepare their infrastructure and workforce to integrate autonomous technologies seamlessly."
Customer expectations
Customers are increasingly prioritising flexibility and convenience over ownership, and the leasing industry must adapt to meet these evolving expectations. Fisk observes that "the shift towards usership has led to a rise in leasing, with customers demanding more options in terms of shorter durations and flexible early termination policies. Leasing companies should offer on-demand transport options alongside other forms of transport to meet environmentally friendly, sustainable, and cost-effective travel needs."
Rolink concurs, advocating for "subscription-based models, flexible lease terms, and bundling of services like insurance and maintenance. Enhancing digital platforms for a seamless user experience will also be key in meeting the demand for convenience and flexibility."
Sustainability and green innovation
Effectively transitioning to electric fleets is a top concern for many businesses. Fisk and Rolink agree that barriers like infrastructure and cost can be overcome by forming strategic partnerships with charging infrastructure providers, offering incentives for EV adoption, and focusing on total cost of ownership (TCO) to highlight the long-term benefits of electric fleets. "Innovation in battery technology and government subsidies can also support the transition to electric powertrains," notes Rolink.
"A business will need to map the usage of the vehicles with the range and battery capacity of the vehicle, coupled with charging facilities in the optimum locations," explains Fisk. "It will be important to consider home charging, public charging availability, but also depot charging if the business can accommodate this. In-depth analysis is required to look at how different EVs have significantly variable charging downtime costs and should inform vehicle selection."
Balancing sustainability with profitability requires a dual focus on operational efficiency and value-added services. "Companies can invest in green technologies that offer long-term savings, such as energy-efficient vehicles and telematics, while maintaining competitive pricing through economies of scale and innovative financing options," says Rolink.
The competitive landscape
With new players and disruptive technologies entering the market, established businesses must adopt strategies to maintain their edge. Fisk emphasises the need for leasing companies to "offer more online services to cater for on-demand travel." Rolink suggests that established businesses should "focus on innovation, customer-centric services, and leveraging their market experience to offer differentiated value. Building strong ecosystems through partnerships and continuously upgrading digital capabilities will also help maintain a competitive edge."
Looking ahead
Despite the challenges, there are emerging opportunities for the leasing and fleet industry. Fisk highlights the importance of being consultative and aiding customers through vehicle selection for their fleet. "The complexities of choosing the right EV for business needs require intelligent data solutions. Offering a broader portfolio of mobility solutions to cater to evolving changes is also crucial."
Rolink sees growth in mobility-as-a-service (MaaS), the integration of AI for smarter fleet management, and expanding into emerging markets as key opportunities. "The focus on sustainability will create demand for green leasing options and eco-friendly fleet solutions."
Over the next decade, the leasing and mobility sectors will become more integrated, with seamless transitions between different mobility options. "The adoption of EVs, autonomous vehicles, and smart city initiatives will drive innovation, while customer demand for sustainability and flexibility will push the industry toward more personalised and environmentally conscious solutions," concludes Rolink.
JATO is dedicated to supporting leasing businesses in overcoming their most pressing challenges, including regulatory compliance, operational efficiency, and cost management. With our comprehensive data and insights, we help businesses transition smoothly to EVs, optimise fleet strategies, and stay competitive.
Partnering with JATO offers key benefits such as reduced costs, improved compliance, optimised vehicle lifecycle management, and data-driven strategies to meet ESG targets and operational objectives. We equip businesses with the insights and capabilities to act decisively and drive long-term success.
We currently work with over 300 leasing businesses globally and our trusted data is used daily by over 1,000 fleet managers - get in touch today to discover how we can help you and your business.