Additional dangers highlighted for used EV market on account of new automobile grant
Residual values of electrical automobiles (EVs) are beneath strain as Authorities incentives to spice up new gross sales threat additional weakening the used market, in accordance with Cox Automotive.
The corporate’s information exhibits EVs as much as 24 months outdated are actually retaining 46% of their unique value new when bought by means of commerce in July 2025. This compares to 85% for related automobiles in 2022.
Philip Nothard, Cox Automotive perception director, mentioned the sharp decline in residual values is instantly linked to the heavy discounting seen within the new EV market.
He defined that whereas the Authorities’s newest incentives will assist scale back the upfront value of a brand new electrical automobile, they do little to assist the second-hand market, which performs an important function in trade profitability.
Nothard mentioned: “Residual values for EVs as much as two years outdated are actually at larger threat of additional depreciation if the Authorities fails to increase assist to used automobiles.
“The energy of the used sector is vital to the success of internet zero ambitions.”
His feedback comply with this week’s announcement that patrons can obtain as much as £3,750 off the worth of a brand new EV by means of a the Electrical Automotive Grant.
The Division for Transport has now printed steering on use the portal to report eligible EV gross sales and factors out to OEMs and franchised sellers that every one claims have to be verified earlier than grants are paid out.
Actual EV affordability is beneath £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 slim collection of round 30 fashions and most patrons utilizing PCP finance gained’t see a significant drop in month-to-month funds.
“The vast majority of EVs on sale right this moment won’t qualify, and most reductions will possible be nearer to £1,500 than £3,750.”
Brown added that the Authorities would have made a stronger affect by supporting the used EV market as an alternative.
With 40% of used EVs promoting for beneath £20,000, he mentioned that’s the place actual affordability lies for on a regular basis patrons.
He added: “Serving to the used market would raise residuals for brand new EVs and scale back finance prices extra broadly.
“As a substitute, we threat a slowdown as patrons watch for readability on the scheme.
“The intent is optimistic, however the execution must go additional to learn the typical motorist.”
