Who sets the Apps, Motability or the Manufacturers?
Motability ultimatelyset the AP based on several factors.
Misleading at best.
Of course it’s “ultimately” set by Motability, they decide whether or not to take an offer. The reality is, the actual deciding factors are resale value as well as the conditions at which they can get the car.
In case of EVs, it’s the one surefire way for manufacturers to reach their quotas – which is why they offer them at favourable conditions to fleet operators.
Unlike ICE cars, car manufacturers can and do sell EVs at a loss. To put differently: 22% of new car sales in the UK in 2024 have to be EV, rising to 28% next year. If a manufacturer exceeds that target, they can either bank an allowance in quota or trade the excess quota with manufacturers who didn’t meet the target (bit like carbon trade).
If they fall short, on the other hand, they’ll pay a £15.000 (15k) fine for every single non-EV car sold over the allowance. I don’t think i need to explain why a car manufacturer isn’t particularly keen to pay a 15 grand fine on a 25 grand car – so you bet your chops that manufacturers push EVs to favourable conditions, because even if they sell more than they have to, they can either sell the credit or save some for a rainy day/year (since the quota rises steeply annually).
To further point out the obvious, even if they sell an EV at a loss, they still might break even (or make profit) from the resulting credit, as well as the averted fine for that car. So even if they lose 10 grand on an EV, they still save 5 grand over the fine plus whatever the credit goes for between manufacturers (which won’t be a tenner, considering that each single credit is basically worth a 15k fine – my guess would be maybe around 1500 to 2000 quid per credit).
So, as i mentioned before, no. Motability isn’t “setting these AP”, it’s the result of taking the best offers they can get. To put vice versa, a removal of all BEVs tomorrow would not result in cheaper APs for ICE cars. They’ll stay the same.
Prior: SEAT Ateca Xcellence Lux 1.5 TSI DSG MY19, VW Golf GTE PHEV DSG MY23
Current: Hyundai Ioniq 6 Ultimate
Next: we'll see what's available in 2028.