Second-hand EVs retain their value better than industry claims, study

Electric cars are retaining their value better than the leasing industry claims, new T&E analysis shows. This has major implications for potential buyers and the pricing of leasing deals and puts pressure on leasing companies, carmakers and governments to accelerate the EV shift, says T&E.

The discrepancy stems from how the value loss is calculated. The industry commonly relies on used-car transaction estimates for leasing and financing deals. In the four largest EU markets – Germany, France, Italy, and Spain – 2025 data on used transactions shows a 12.9 percentage point depreciation gap between combustion and electric cars [1]. However, T&E analysis reveals five key variables are omitted from these calculations. Adjusting for them reduces the gap by 80% to just 2.6 percentage points.

The industry’s figures overlook the fact that subsidies lower EV purchase prices, while acquisition taxes raise those for fossil-fuel cars. These two factors, together with inflation and fleet composition ―two further key parameters― cut the original 12.9 percentage point gap by more than a third (5.2 percentage points) [2]. Falling new electric car prices will bring down the average depreciation of EVs by a further 5.1 percentage points [3].

Leasing firms should capitalise on growing demand for second-hand EV leases and offer longer lease terms, says T&E. Meanwhile, carmakers must standardise battery health certificates and approved-used schemes to reassure buyers[4].

T&E also calls on EU lawmakers to support the upcoming Corporate Clean Vehicles Regulation (CCVR) which will set electrification targets for the fleets of large companies. The regulation will secure sustained EV demand while closing the remaining depreciation gap through a mature, predictable market, T&E argues.

Stef Cornelis, director of the Electric Fleets and Freight programs at T&E, said: “The industry is painting an overly simplistic picture of EV depreciation to justify opposing EU fleet electrification targets. In reality, binding targets create market predictability, allowing leasing companies to manage depreciation with greater certainty. Furthermore, targets will incentivise Member States with outdated car tax systems to adopt progressive reforms, which will ultimately reduce the real depreciation gap between powertrains over time."

Such policies would back growing consumer confidence in second-hand EVs. The analysis finds that, across the four markets, the volatility of EV depreciation matched that of fossil-fuel cars in both 2025 semesters.

Drivers’ reaction to volatile oil prices stemming from the Hormuz blockade points to further reduction in the depreciation of EVs. In Ireland, the rise in used EV values was almost double that of petrol and diesel cars, year-on-year, in July 2026, according to the country’s largest online car marketplace. In Germany, sales of used battery-electric vehicles (BEVs) increased 64% year-on-year in the first seven months of 2026 —a surge that is expected to drive up German used EV values as well. [5].

Stef Cornelis adds: “With high fuel prices hitting EU drivers hard, rapid electrification is the only real solution. Rather than subsidising fossil fuels, we must activate existing policy levers to support private drivers and businesses in making the switch. This will shield drivers from pain at the pump and truly back our automotive industry.”

NOTES TO EDITORS

[1] Data from Autovista.

[2] Inflation and compositional corrections are the remaining two metrics that official calculations neglect. Inflation reduces the gap (-1.9 p.p) for a simple reason: the nominal inflation included in the official residual value figures does not account for the depreciation of money over time. When an adjustment for the real value of goods over time is included, electric vehicles are less penalised because their lower residual values imply a smaller inflation-related adjustment. The only metric that increases the gap is a compositional correction (+1.6%) which corresponds to an older, higher-mileage fleet on the fossil-fuel side as a result of the continuous EV model turnover.

[3] As new EVs become cheaper, used EVs are also repriced downwards because buyers compare them with a lower new-car price. This effect should weaken over the next few years as new EV prices stabilise and converge with those of combustion cars.

[4] BCA, Europe’s largest car remarketer, found that certified EVs achieved around 1.4% higher resale value and were sold 2.7 days faster on average, while leasing giant Arval has issued over 30,000 battery health certificates across the UK and EU.

[5] Data published by the government entity that tracks vehicle registrations and the primary industry data body.