Nearly-new EVs lose over half their value amid surge in discounts

Electric vehicles (EVs) less than two years old are now retaining just 47% of their original value, a dramatic fall from the 83% seen in 2022, according to new data from Cox Automotive.

The collapse in value is being driven by an influx of heavily discounted new EVs entering the market, with trade-in values for nearly-new models falling steeply as a result.

In March, EV registrations hit record highs in the UK, with 69,313 new electric cars sold. This surge was fuelled by significant manufacturer discounts - estimated to total around £4 billion in 2024 - combined with a wave of new model launches and the arrival of fresh competitors into the UK dealership landscape.

The flood of discounted new models has eroded demand for nearly-new EVs. According to Manheim Auction Service data, EVs aged under 24 months now fetch, on average, just 47% of their original cost new (OCN) at trade auctions. In contrast, similar-age diesel vehicles are currently retaining around 70% of their value.

Philip Nothard, insight director at Cox Automotive Europe, noted that while 2022’s high used car prices were partly a result of post-pandemic supply constraints, the current depreciation rates for nearly-new EVs are unusually severe.

“The heavy discounts on new EVs have essentially cannibalised demand for those just one or two years old,” said Nothard. “Why would a buyer pay almost the same price for a used model when they can get a brand-new one? This is a huge setback for the used EV market, which needs every incentive it can get.”

There is a brighter outlook for older electric vehicles, however. EVs aged three to five years have only seen a modest 15% drop in value since 2022, partly because they attract a different buyer profile and are less affected by new vehicle incentives.

“The used car market is a vital source of profit for the automotive industry,” Nothard added. “With conditions becoming increasingly unpredictable, stability in used EV values is essential. Greater support is needed to slow the pace of depreciation and strengthen this emerging segment.”