Heavy Discounts on New EVs Impact Nearly-New EV Values in Used Market

Luxury car dealership with nearly new EVs displayed, emphasizing discounted values.

Discounted New EVs Impact Used Car Market

The electric vehicle (EV) market has seen an exciting boost recently, with record-breaking new registrations across the UK. March 2025 alone witnessed the sale of 69,313 new EVs, primarily fueled by hefty manufacturer discounts. However, this surge is casting a shadow over the nearly new EV market, as demand for these vehicles encounters significant challenges.

Understanding the Drop in Nearly-New EV Values

According to analysis from Cox Automotive, the resale values for EVs aged up to 24 months have plummeted dramatically from 83% of their original value in 2022 to just 47% in April 2025. As a comparison, diesel vehicles within the same age category are retaining around 70% of their original cost. This sharp decline indicates a tough market environment for used EVs, leaving consumers with little incentive to purchase nearly-new models when they can opt for brand-new ones at similar prices.

Why Older EVs Are Holding Value Better

Despite the struggles faced by nearly-new EVs, those aged three to five years are experiencing a more stable performance in the used market. At auction, these vehicles have only seen a modest 15% decline in value. This resilience suggests that these slightly older EVs potentially attract a different demographic of drivers who may prioritize features over cost.

The Importance of the Used EV Market

The profitability derived from the used vehicle sector is vital for the automotive industry, especially amidst shifting consumer preferences and fluctuating market dynamics. As more new EVs flood the market, the industry's focus must shift towards enhancing support for nearly-new models to slow down depreciation rates and encourage consumer interest.

Looking Ahead: Supporting Used EV Growth

If the automotive sector hopes to thrive in a challenging marketplace, enhanced incentives for used EVs could play a crucial role. As manufacturers adjust their strategies to meet the evolving demand, investing in the strength of the used EV market becomes increasingly important. Ultimately, addressing these challenges head-on can help preserve the attractiveness and viability of electric vehicles for consumers.

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