The Government must take action now to avoid further volatility in used electric vehicle values, the BVRLA has warned.

BVRLA chief executive Gerry Keaney launching the campaign in the House of Lords

Used EV values have fallen 50% over the last 24 months, and the UK’s vehicle rental and leasing association says further drops are likely if no action is taken.

Concerns are already mounting that falling values could see fleets hit by rising lease costs as finance companies seek to cover their potential losses.

And with ever-increasing numbers of ex-fleet EVs set to hit the used market, particularly as the new government reinstates the 2030 ICE phase-out, the BVRLA has warned of a “negative loop set to accelerate in the coming years”.

Its analysis shows the number of used electric vehicles entering in the market will double over the next two years, but used buyer demand is not enough for even current levels of supply.

This imbalance in used EV supply and demand could hit demand for new EVs. By 2027, Oxford Economics believes that the collapse in used EV values will have resulted in nearly 300,000 fewer new electric cars being sold.

BVRLA’s chief executive Gerry Keaney said: “Vehicles start depreciating as soon as they are sold, particularly over the first few years. This is a fact of life and the cost of this loss in value is absorbed into the vehicle finance agreements that are responsible for around 90% of all new car and van sales.

“What is unprecedented and unsustainable is the scale of depreciation we are now seeing. Over the last two years, used EV values have dropped by 50% and are set to fall even further.

“These losses are being swallowed by the leasing companies and fleet operators that have championed the switch to zero-emission vehicles. They cannot continue to bear this burden alone. The Government needs to intervene now to help bring confidence and stability back to this vital part of the automotive ecosystem.”

The association issued the call for government action on EV values as part of its annual Parliamentary Reception, where it launched its #happyEVafter campaign.

Run in conjunction with Auto Trader, EVA England and the NFDA, the campaign outlines where policy changes, targeted incentives and collaboration between government and industry can create a smoother transition. It says work is needed to address three critical points: boosting confidence, balancing cost of ownership and expanding accessibility.

The BVRLA is also launching a full report exploring the used EV market next week (Tuesday 17 September). Compiled by Oxford Economics, it will outline the scale and severity of the challenges currently being experienced by the used EV market and all those who operate within it.

Cox Automotive recently warned that pressure on carmakers to hit ZEV mandate targets will impact future residual values. OEMs are expected to either prioritise pushing EV stock into the market through “aggressive” fleet and retail price strategies, or restrict the availability of ICE and PHEV derivatives to force EV sales – and likely both.

Philip Nothard, Cox Automotive’s insight director, said that without any government concession on the ZEV timetable or support mechanisms, this will result in fleets, dealers and private buyers being hit by “unpredictable” residual values when heavily discounted EVs start to flood the used market in 12-36 months.