Government action needed to stabilise used EV values, urges BVRLA.

Government urged to act swiftly to prevent further depreciation in used electric vehicle prices

The BVRLA is sounding the alarm on the declining values of used electric vehicles, emphasising the urgent need for intervention to curb the downward trend.

Over the last two years, the prices of used EVs have plummeted by a staggering 50%, prompting concerns that if left unchecked, this trend could continue. The UK’s vehicle rental and leasing association warns that this could result in higher lease costs for fleets as finance companies scramble to cover potential losses.

As the government plans to reinstate the 2030 ICE phase-out and more ex-fleet EVs flood the market, the BVRLA predicts a concerning cycle of declining values that could intensify in the coming years.

An analysis conducted by the association highlights a doubling in the number of used electric vehicles entering the market over the next two years. However, the current demand from buyers is insufficient to absorb even the existing supply levels, creating an imbalance that could dampen the interest in new EVs.

By 2027, it is projected that nearly 300,000 fewer new electric cars could be sold due to the adverse impact of collapsing used EV values, according to Oxford Economics.

Gerry Keaney, BVRLA’s chief executive, expressed concern over the unprecedented and unsustainable scale of depreciation experienced by used EVs. He emphasised the need for government intervention to restore stability and confidence in the automotive ecosystem.

The BVRLA launched its #happyEVafter campaign at its annual Parliamentary Reception, calling for targeted policy changes, incentives, and industry collaboration to facilitate a smoother transition towards electric vehicles. The campaign focuses on boosting confidence, reducing ownership costs, and enhancing accessibility.

Additionally, the association will release a comprehensive report next week, compiled by Oxford Economics, shedding light on the challenges plaguing the used EV market and those operating within it.

Another voice echoing concerns over the impact of ZEV mandate targets on residual values is Cox Automotive. The company anticipates that carmakers will resort to aggressive pricing strategies to meet these targets, potentially inundating the used market with discounted EVs in the near future.

Philip Nothard, Cox Automotive’s insight director, warns that without government intervention or support mechanisms, the market could face unpredictable residual values as the industry navigates through the influx of electric vehicles.