Labour has been urged to intervene and rescue the collapsing used electric vehicle market, which could impact the UK’s net zero plans.
Earlier this week, a letter was sent to the Transport Secretary, Heidi Alexander, by the British Vehicle Rental and Leasing Association (BVRLA) alongside 30 companies calling for urgent action to help increase uptake in EVs.
In the letter, the companies warned that without swift action to support the used battery electric vehicle (BEV) market, the UK's Zero Emission Vehicle mandate faces serious jeopardy.
The signatories urged the Government to allocate a substantial portion of the £1.4billion committed last month for electric vehicle uptake to help stabilise the second-hand market through targeted financial support.
Do you have a story you'd like to share? Get in touch by emailing motoring@gbnews.uk
The UK car industry has called on the Transport Secretary to allocate more funding to the second-hand EV market
GETTYThe letter revealed that used electric vehicle values have plummeted by nearly 60 per cent since September 2022, far exceeding the depreciation of petrol cars and creating unprecedented market volatility.
The association warned that this dramatic collapse threatens the financial foundations of the entire electric vehicle ecosystem, as almost all new vehicle purchases in the UK rely on finance arrangements underpinned by future residual values.
The coalition said that supply-demand imbalances in the used BEV market have led to steep depreciation that is "undermining established business models and market confidence".
According to the BVRLA's recent Road to Zero report, the average used EV price fell 46 per cent between 2021 and 2024, compared to just 19 per cent for internal combustion engine vehicles, costing the fleet and leasing sector hundreds of millions of pounds.
Used EV values have dropped by nearly 60 per cent since September 2022
PAThe industry has now called for targeted grants and subsidies to help more households and SMEs access used electric vehicles, emphasising that the second-hand market offers "the best value-for-money opportunity for Government to accelerate BEV uptake".
Beyond direct financial support, the coalition demanded broader interventions, including investment in skills and training, public information campaigns, and clear battery health standards to build consumer confidence.
The letter highlighted that over 86 per cent of consumers view current support programmes as insufficient to make the switch to electric vehicles, with many finding these vehicles unaffordable.
The signatories stressed that stabilising used values must be a focus of the Department for Transport's spending allocation, warning that without intervention, "the transition will stall" as the supply of used BEVs increases rapidly.
LATEST DEVELOPMENTS:
BVRLA chief executive Toby Poston said: "The used car market is nearly four times the size of the new one. Maintaining healthy demand and values for second-hand electric vehicles is essential if we want to deliver a sustained transition."
He warned that low residual values increase financing and leasing costs for new vehicles, particularly impacting consumers and SMEs while suppressing demand across the entire BEV ecosystem.
Poston described the letter as an example of continued collaboration between industry and Government to ensure the funding achieves "the best return on investment".
The 33 signatories included major leasing companies such as Alphabet, Arval UK, Ayvens UK, and Zenith, alongside manufacturers BYD UK, MG Motor UK, Polestar, and VW Financial Services.
Experts have called for more grants to be introduced to help encourage drivers to buy electric cars
PAInsurance giant AXA UK & Ireland joined trade associations including the Association of British Insurers, the Association of Fleet Professionals, and the Electric Vehicle Association England.
The coalition also featured Autotrader UK, Cox Automotive Europe, Motability Operations, and the National Franchised Dealers Association, demonstrating widespread concern across vehicle sales and remarketing channels.
Other signatories included the Institute of the Motor Industry, National Association of Motor Auctions, and Vehicle Remarketing Association.
Other companies such as MJ Quinn, Sanctuary Housing, and Speedy Hire reflect the breadth of businesses dependent on a healthy electric vehicle market.