Electric vehicles lose more than 50 per cent of their value in the first two years of ownership, according to new research.
The residual value of an electric vehicle at 24 months old held an average of 83 per cent of its original cost new (OCN) value when sold in 2022.
However, in April 2025, vehicles with the same age profile retained just 47 per cent of their original value when sold to trade.
In comparison, a 24-month-old diesel vehicle being sold is expected to retain an impressive 70 per cent of its original value.
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Research showed that the value of electric cars halves within two years of ownership
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Cox Automotive, which conducted the research, suggested that this trend was in line with a surge in electric vehicle registrations, which is having a knock-on effect on the used market.
Data from the Society of Motor Manufacturers and Traders (SMMT) reported that almost 70,000 new electric vehicles were sold in March 2025 - a record month for sales of the green powertrain.
Analysts from Cox Automotive claimed this was driven predominantly by manufacturers offering discounts, alongside March being a historically successful month for new car registrations.
Many manufacturers cut prices of new electric vehicles ahead of car tax changes, which launched in the new financial year from April 1.
Vauxhall, for example, cut prices of its entire electric vehicle line-up to below £40,000 so drivers can avoid the Expensive Car Supplement tax.
Philip Nothard, insight director at Cox Automotive Europe, acknowledged the impact of the Covid-19 pandemic and how used vehicle prices peaked in 2022.
He added: "However, the current performance of nearly-new EVs in the used market is still much lower than we would anticipate for vehicles in this age profile.
"The heavy discounts offered on new vehicles mean that consumers can pick up a brand-new model for the same price as a nearly-new model.
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"This gives consumers very little incentive to consider them, which is a real blow to a market that needs all the incentives it can get its hands on."
Despite the initial drop in value, electric vehicles between three and five years old only see a modest fall of 15 per cent in the same time period.
Cox Automotive said this was down to the fact that they are less likely to be impacted by heavy manufacturer discounts and will be desirable to a different group of motorists.
Northard said the used car market remained a "crucial source of profitability" for the automotive sector.
March saw record sales of new electric cars, with almost 70,000 registered
GETTYSince the start of the year, used electric vehicle sales surged by 58.5 per cent, with a record 3.3 per cent share of the second-hand market.
Meanwhile, used diesel cars dropped by 3.1 per cent and petrol sales only grew by 1.9 per cent in the first four months of the year.
Northard added: "Within increasingly volatile market conditions, the strength and consistency of used operations are crucial.
"To ensure this, more support for the used EV sector is needed to put the brakes on the rapid pace of depreciation."
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