Key Facts:
- The Loss: Leasing companies suffered five-figure losses (£10,000+) on certain EV disposals, per BVRLA’s January 2026 outlook.
- The Word: Industry report describes depreciation as “savage”—their terminology, not critics’.
- The Fix: Sale-or-return pilot schemes and extended lease terms now being used to prop up residual values.
- The Contradiction: Report claims battery fears “evaporated” while simultaneously admitting values stabilized “much lower than forecast.”
The Used EV Market Is Bleeding Harder Than a Punctured Battery Pack
If you’ve watched used EV prices tumble over the past 18 months, you’ve seen the chaos firsthand. But now the leasing industry is finally admitting what critics have been saying all along: residual value forecasts were wildly optimistic. The BVRLA’s latest leasing outlook reads like a Tesla owner watching their car’s value drop £5,000 in six months—except this time, it’s the finance companies eating the loss.
Who’s Behind the Numbers
The British Vehicle Rental and Leasing Association (BVRLA) represents the firms that actually set residual values for fleet and lease contracts. Their January 2026 report quietly admits leasing firms have taken five-figure hits on EV disposals. Translation: they bet these cars would be worth far more than the market would pay. It reminds me of Polestar’s pre-registration strategy flooding the market with nearly-new discounts—except this time, the damage is on the balance sheets, not just the showroom floor.
The ‘Savage’ Truth
Here’s the kicker: the report uses the word “savage” to describe EV depreciation. That’s not some angry YouTuber’s hot take—that’s the industry’s own language. They’re now drip-feeding used EVs to auctions, extending lease terms to 8-9 years, and piloting sale-or-return schemes with independent retailers. It’s the automotive equivalent of a manufacturer suggesting MSRP while everyone knows the real price is £10k lower.
What This Means for You
Private buyers have been more cautious than fleet customers for a reason—they’re spending their own money, not leveraging tax perks. The report notes EV uptake is stronger in salary sacrifice schemes, but that’s because employees don’t carry the residual risk. For retail buyers, the math is different: actual purchase price, actual resale uncertainty, actual hassle. No wonder they’re hesitating while businesses lock in subsidized deals.
The Broader Signal
This isn’t an EV failure—it’s a forecasting failure. Battery degradation fears have supposedly “evaporated,” yet values remain depressed. The contradiction tells you everything: the problem wasn’t public misunderstanding, it was inflated expectations. With the ZEV mandate looking increasingly unenforceable by 2027 and a proposed pence-per-mile road charge looming from 2028, the policy whiplash isn’t helping either.
Watch the BVRLA’s next quarterly report and Autotrader’s used EV inventory data—the real test is whether values stabilize without artificial propping.
