Residual values of electrical autos (EVs) are below stress as Authorities incentives to spice up new gross sales danger additional weakening the used market, in line with Cox Automotive.
The corporate’s information exhibits EVs as much as 24 months outdated are actually retaining 46% of their authentic price new when offered by commerce in July 2025. This compares to 85% for comparable autos in 2022.
Philip Nothard, Cox Automotive perception director, mentioned the sharp decline in residual values is straight linked to the heavy discounting seen within the new EV market.
He defined that whereas the Authorities’s newest incentives will assist cut back the upfront price of a brand new electrical automobile, they do little to assist the second-hand market, which performs an important position in trade profitability.
Nothard mentioned: “Residual values for EVs as much as two years outdated are actually at higher danger of additional depreciation if the Authorities fails to increase assist to used autos.
“The energy of the used sector is important to the success of internet zero ambitions.”
His feedback comply with this week’s announcement that consumers can obtain as much as £3,750 off the worth of a brand new EV by a the Electrical Automobile Grant.
The Division for Transport has now revealed steering on learn how to use the portal to file eligible EV gross sales and factors out to OEMs and franchised sellers that each one claims have to be verified earlier than grants are paid out.
Actual EV affordability is under £20k
Fraser Brown, managing director of consultancy MotorVise, believes the scheme falls wanting making a significant distinction.
He mentioned” “The grant solely applies to a slender choice of round 30 fashions and most consumers utilizing PCP finance gained’t see a significant drop in month-to-month funds.
“The vast majority of EVs on sale as we speak won’t qualify, and most reductions will doubtless be nearer to £1,500 than £3,750.”
Brown added that the Authorities would have made a stronger impression by supporting the used EV market as an alternative.
With 40% of used EVs promoting for below £20,000, he mentioned that’s the place actual affordability lies for on a regular basis consumers.
He added: “Serving to the used market would carry residuals for brand new EVs and cut back finance prices extra broadly.
“As a substitute, we danger a slowdown as consumers watch for readability on the scheme.
“The intent is constructive, however the execution must go additional to learn the typical motorist.”
