Refocusing on fundamentals: Paul Hyne’s vision for 2025

Paul Hyne - Commercial Director

Lloyds Transport Division

Paul shares his thoughts on the the future of the market

The past year has not been an easy one for many businesses across much of the economy. Geopolitical and economic headwinds combined to make fleet planning and complicated decision making for the future challenging. The government’s Autumn Budget, which was speculated on for weeks in advance and ultimately brought various changes for business to consider.     

And the story is no different for the fleet and leasing industry. While the Budget provided some certainty on Benefit in Kind trajectories and finalised the ZEV mandate target, which helped businesses to make decisions about contract lengths, it’s clear that further stability is needed. 

The electric vehicle market has been volatile, particularly for used vehicles. That, in turn, makes it difficult for businesses to predict residual value patterns and plan for their own transition to a more sustainable fleet.      

While residual values stay stubbornly unpredictable, there has been a lift in the market in recent months, and with interest rates and inflation becoming more stable, Paul Hyne, Commercial Director across Lloyds Banking Group’s transport brands - Lex Autolease, Black Horse Finance and Tusker, is cautiously optimistic.

Here, Paul shares his insights on how 2024 fared for Lex Autolease, the current state of the market and his expectations for the year ahead.

Market stability and residual values

We open by asking Paul to compare how 2024 has compared to 2023. 

He says: "The biggest challenges we face as an industry have carried over. We first encountered issues with supply and the volatility of pricing in 2023, and while supply has normalised the pricing challenges persist.” highlighting the volatility in the used car market and residual values. 

He continues, “at Lex Autolease, we’re fortunate to have the support of Lloyds Banking Group, which provides us with the economic and financial backing to help navigate these challenges."      

But the market has proven resilient in recent months, he thinks.

He goes on: “While the first half of the year was volatile across segments, the second half has levelled out. Used Battery Electric Vehicles (BEVs) are particularly cheap now and are expected to become even more budget-friendly in the coming years. Our hope is that the market has found the base and will stabilise from here, rather than seeing further falls in residual values.”

This means, according to Paul, that Lex Autolease can be more stable in its residual value predictions, giving customers more consistent price and choice lists, allowing them to plan more efficiently. 

He continues: “As businesses are fighting fewer fires, they can spend more time on strategy, policy and thinking about the electric transition. It will also allow them to take advantage of the value-add parts of our offering, like telematics and connected vehicles.”

The rise of new entrants

The emergence of new electric vehicle manufacturers also continued to shake up the market last year, raising the game in terms of new products.

Paul is confident of the quality and potential of new entrants like Xpeng and BYD, the most mature entrant of recent years, but notes that it takes time and consistency to earn the trust of the market. "I see a lot of caution in the market with regards to new entrants, and while most are evolving pretty comprehensive parts, repairs and insurance networks, spurred on by the competition, I think new entrants still need to earn that trust".    

Paul emphasises the importance of a robust after-sales network. "It's all well and good having a car that looks great and does loads of miles on one charge, but corporate customers need reliable after-sales support.” He gives the example of a windscreen cracking, “If after-sales support isn’t there to get it back on the road on time, then it quickly loses its appeal.”

He goes on, “Our process for selecting partners is rigorous – it’s vital that the right after-sales solutions are there for our customers. This due diligence allows us to be confident that every vehicle is safe and reliable.”

Used vehicles are in demand

A year ago Paul told us about the launch of Lex Autolease’s used vehicle portal. Much work has gone into improving it since then. His goal was to launch and scale up gradually, taking the time to iron out any kinks, and the business has done just that. 

Now, with strong progress and take up, we have a growing number of customers signed up to the programme, Paul is pleased with the progress so far. “We’re growing all the time. We’ve worked hard to increase capacity in our refurb and logistics function and can look after a huge volume of vehicles now, and the reliability of used electric vehicles is really proving itself.” 

He continues: “And with that confidence, the lower cost and the flexible contracts we can offer, demand is ramping up. In fact, we’re looking to expand our distribution channels substantially next year to help meet that demand.”

Electrifying the UK’s fleets

After the ZEV mandate deadline moved from 2030 to 2035, a new government brought fears that targets would shift again for when the last ICE vehicles could be produced.

This uncertainty, Paul explains, has played on the minds of Lex Autolease’s corporate and public sector customers: “I’m hoping that the current ZEV Mandate consultation – named ‘Phasing out sales of new petrol and diesel cars from 2030 and supporting the ZEV transition’ - will bring much-needed certainty for customers and business alike, after all, this transition is a shared goal for the benefit of us all.”  

But there are other challenges associated with the electric transition, including supporting van customers in the move away from ICE vehicles.

One of the ways that Lex Autolease is doing this is by using AI to model vehicle use, Paul tells us. “We’re trialling using AI and telematics data to look at how our customers can transition part of their fleets in a more deliberate way, and it’s worked well – it just goes to show that you don’t have to transition the whole fleet all in one go.” If this continues to work as well as it has, he adds: “We can roll that out in a more consultative way”.

Here, Paul highlights the importance of managing the downtime associated with charging for those commercial fleets. 

“One of the biggest challenges for us is associated with charging downtime, which of course is an important consideration for businesses.”

He continues: “For us, it’s about having that conversation with our customers, and looking at how we can help them to manage that downtime. We’re looking at taking advantage of our infrastructure and charging network, opening payment solutions and exploring charging options during the working day.” Paul notes that this will be a key focus for the business going forward, as well as using partnerships to enhance service delivery.

Heading into 2025

Looking forward to 2025, Paul also expresses a renewed focus on providing a reliable service at a reasonable price, aiming to be an even better partner for customers.   

"The post pandemic period has meant much fire fighting, be it vehicle supply, shifting policy or market volatility. With that hopefully behind us now, I'd love to get back to basics a little bit and really re-engage with our customers to find out what's important to them," he says. “That could be, what more they’d like to see from us, but also what they receive but don’t use.”  

With the market back on stable footing, Paul acknowledges the challenges and opportunities that lie ahead. As the industry continues to evolve, he says, “while we may not change the world in one year, we’re committed to delivering exceptional customer service in 2025.”