Values of used electric vehicles halved due to discounts on new cars

Discounts on new electric vehicles (EVs) is dampening demand for nearly-new plug-in models in the used car market, new analysis suggests.  

Registrations for EVs reached record volumes in March, with the surge predominantly driven by manufacturer discounts, according to Cox Automotive.

The Society of Motor Manufacturers and Traders (SMMT) estimated that discounts on EVs cost carmakers in region of £4 billion in 2024.    

New analysis from Cox Automotive illustrates the impact of these discounts on the used market.

Looking at residual values, EVs aged up to 24 months old held an average of 83% of their original cost new (OCN) when sold to trade in 2022.

This is in stark contrast to April 2025, where vehicles with the same age profile retain only 47% of their original cost new.

For context, the average diesel vehicle selling to trade with this age profile today is expected to retain 70% of its original value.

Graph illustrates average yearly trade sale price for EVs under 24 months old as a percentage of original cost new. Source: Manheim Auction Service 

Philip Nothard, insight director at Cox Automotive Europe, says that 2022 saw used vehicle prices reach a peak following the supply constraints around the Covid-19 pandemic.

However, he explained: “The current performance of nearly-new EVs in the used market is still much lower than we would anticipate for vehicles in this age profile.

“The heavy discounts offered on new vehicles mean that consumers can pick up a brand-new model for the same price as a nearly-new model.

“This gives consumers very little incentive to consider them, which is a real blow to a market that needs all the incentives it can get its hands on.”  

On the flip side, EVs between three to five years old are performing strongly.

At auction, these vehicles have seen only a modest drop of 15% in the same time period as they aren’t impacted as severely by heavy manufacturer discounts and tend to attract a different driver. 

Nothard concluded: “The used market is a crucial source of profitability for the automotive sector. Within increasingly volatile market conditions, the strength and consistency of used operations are crucial. To ensure this, more support for the used EV sector is needed to put the brakes on the rapid pace of depreciation.” 

Figures from the SMMT for the used market show that used battery electric cars recorded the highest growth in quarter one of this year, increasing by 58.5% to 65,850 units and a record 3.3% share of all transactions.