Automotive Business Magazine – Q2 2026 – Digital edition - Magazine - Page 22
OPI N I O N
R E TA I L
Used EVs on
a knife edge
→ Neil Frost is MD at Autorola UK
T
he zero-emission vehicle (ZEV)
mandate is set to continue
as the UK’s biggest risk to
future EV residual values.
The UK regulatory framework
– and the ZEV Mandate in
particular – now stands as a
key destabilising factor for
residual values in 2026.
EVs achieved a market share in 2025
of 23.4%, a figure that was only reached
through some aggressive marketing and
pricing from OEMs – The Society of Motor
Manufacturers and Traders (SMMT)
claims that discounting EVs cost OEMs
£11,000 per car. This was set against an
overall ZEV Mandate target of 28%.
Despite the industry not hitting
the 2025 target, the 2026 target has
increased to 33% in 2026. This suggests
further discounting and investment in
marketing will be needed to increase
new EV sales by a hefty 10% by the end
of the year, which sounds a big ask.
Autorola is encouraging the industry
to step up its EV education to grow
consumer demand for used EVs,
and joins The SMMT in encouraging
the Government to bring forward its
mandate review, as used values of EVs
are on a knife edge.
Under pressure
Data from used car pricing insights
platform Indicata, part of Autorola UK,
shows the rise of ex-fleet EV stock is
gradually translating into oversupply on
the used-car market, which puts residual
values under sustained pressure.
In the first couple of months in 2026
Indicata has seen EV sales rise to 7.8% of
all used retail cars sold while stock has
risen to an all-time high of 9.2%.
That means supply exceeds demand,
just as we approach an influx of more
used cars coming into the market on
the back of the March new registration
month. Last year, March accounted for
16% (357,000) of 2025’s total sales, 19.4%
22
AUTOMOTIVE BUSINESS Q2 2026
of which were EVs, which reinforces the
nature of the problem.
While EV prices remained static for the
final four months of 2025, in the first two
months of 2026 prices have fallen by just
0.2%, and only time will tell whether the
26-plate change will compromise prices
further.
Retail prices of EVs have
already fallen by 20%
since January 2024 and
the industry cannot afford
for a similar fall without
risking compromising
vendor profitability and
higher monthly leasing and
finance rates during 2026.
Indicata’s monthly
Market Watch used car
insights report uses Market
Days’ Supply (MDS) as an effective
indicator between used car supply-anddemand by fuel type.
MDS is derived from dividing the
current supply of inventory by the
average daily retail sales rate over the
past 45 days. A lower number signifies
high demand and quick sales. During
February, the MDS of all fuel types fell
dramatically, which is good news for
everyone. MDS figures range from 46
days for petrol cars to 62 days for EVs.
Overall, the UK used car market is no
longer about accelerating electrification,
but of managing its impact on the used
market. While ICE vehicles continue
to provide stability and anchor the
liquidity of the UK used car market, we
are waiting for lower used EV prices
to translate into a decisive rise in
consumer demand.
There remains a strong argument that
unstable used values caused by the ZEV
Mandate could slow overall EV adoption,
and it’s too early to tell whether cheaper
new electric vehicles being sold are going
to translate into strengthening future
consumer demand enough to balance
supply and demand.
The UK used
car market is
no longer about
accelerating
electrification"
