Cheaper new EVs are good news for fleets but what are they doing to residual values?

A car salesperson handing over car keys to a customer.

Electric used-car values strengthened again in October, but Cap HPI is warning that aggressive new-car pricing is continuing to put pressure on younger vehicles.

Its November market overview shows battery-electric cars were comfortably the strongest-performing fuel type at three years/60,000 miles, with average values rising 0.6% during October. That compares with falls of 2.6% for diesel, 2.2% for petrol, 1.8% for hybrids and 1.9% for plug-in hybrids.

Nearly half of BEV models increased in value, while Cap HPI is also seeing more independent dealers returning to the electric market as used EVs become commercially attractive.

However, there is an important qualification for fleets.

Cap HPI says younger used EVs remain particularly affected by new-car offers, with both the Government Electric Car Grant and manufacturers' own discounts creating pressure on nearly-new values. It expects that effect to continue into November.

For fleet managers, that reinforces the need to look beyond the acquisition discount.

A heavily supported new EV may deliver an excellent lease or purchase price today, but the effect of that discount on future disposal value still needs to be included in whole-life-cost calculations.

Stronger used-EV demand is encouraging, but fleets should assess acquisition price and future residual value together rather than treating either in isolation.

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