Affordability and transition to electric vehicles

Motability Operations is not just a leasing provider; it is a catalyst for change. Catering specifically to the needs of disabled individuals, the company enhances independence and accessibility through its tailored mobility solutions. This vital service empowers its customers to navigate their lives with greater freedom and confidence.

At the heart of its activities is the Motability Scheme, which allows eligible customers to exchange their mobility allowance for leased vehicles, including cars, wheelchair-accessible vans, scooters and powered wheelchairs. The payments for these leases via the mobility allowance are facilitated directly by the UK Government, effectively eliminating credit risk for Motability Operations and ensuring affordability for its users.

Affordability is a cornerstone of the Motability Scheme, with leasing packages priced approximately 45% lower than alternative market options. But the company doesn’t stop there; it is also committed to advancing the transition to electric vehicles (EVs). Currently, EVs make up about 9% of its fleet, with the ambitious goal to reach 80% electrification by 2032.

Robust financial foundation

Motability Operations operates under a consortium of major financial institutions, ensuring a robust financial foundation. Importantly, the company does not distribute dividends; instead, it reinvests surplus funds into expanded customer support services, demonstrating its dedication to social impact. Between 2021 and 2023, these reinvestments have played a critical role in enhancing the services offered to customers.

The company boasts a strong credit rating (A2 by Moody’s, A by S&P), reflecting its resilience in the face of challenges such as fluctuating car prices and supply-demand imbalances in the automotive sector. This financial stability positions Motability Operations as a reliable investment opportunity for those looking to make a positive impact.

A clear fit

Through its affordability, EV transition goals and reinvestment of profits, Motability Operations continues to drive positive change in the mobility sector. By ensuring disabled individuals have reliable and cost-effective transport options, it solidifies its role as a leader in inclusive transportation solutions.

This makes it align perfectly with our impact bond strategy. The social bond, which is part of the Triodos Euro Bond Impact Fund and Triodos Sterling Bond Impact Fund portfolio, contributes to the societal transition, one of five vital transitions we aim to accelerate as an impact investor, alongside the food, energy, resource and wellbeing transitions.

Its proceeds will be used to finance both the existing fleet and the new vehicles added to the Motability Scheme, including ICEs, hybrids and EVs. All vehicles are for the use or benefit of qualifying disabled customers, consistent with the company’s business operation.

The bond’s framework is very transparent, disclosing its consistency with the issuer’s sustainability strategy, the allocation of proceeds to finance new projects or refinance existing projects, the look-back period (max 24 months, which is favourable from our perspective), the portfolio approach implying an annual impact report until full allocation, a clear process for project evaluation and selection and a well-defined methodology for impact indicators in the impact report.