Used luxury electric cars are depreciating faster than petrol and diesel equivalents, according to valuation specialist Brego.
Citing forecast data for EV and ICE luxury models from Mercedes-Benz, Porsche, Volvo and Genesis, the company noted an average difference in retail residual values of 1.9% at one year old, 0.7% at two years, 0.9% at three years and 1.3% at four years – all in favour of the ICE version.
The models in question were the Mercedes EQS and S-Class, the Porsche Taycan and Cayenne, the Volvo XC90 and EX90 and the Genesis G80 and Electrified G80.
Mercedes saw the starkest difference between EV and ICE residual values, which broadly increased over time. There was a 5.9% advantage for ICE cars at one year old, 5.4% at two years, 6.3% at three years and 6.4% at four years.
Volvo was the only one of the four manufacturers with a retained value (RV) bias in favour of the EV, which was consistent over the four years and again increased over time. It was 0.8% at one year, 1.4% at two years, 1.6% at three years and 1.9% at four years.
“Generally speaking, the RV percentage is lower for the [luxury] EVs,” Brego’s head of insight and communication, Rupert Pontin, told Autocar. “I think the reasoning for this is that we’re going to start to seeing solid-state batteries coming in, and all of a sudden it will not be a 400-mile range or a 450-mile range, it will be double that.
“Who is going to want a luxury barge that will be used, in many cases, as a chauffeur car or for private hire, when at a year old – or in two, three or four years – it’s got that range? Even if you don’t jump to solid-state, the battery evolution is constant, so I think that is partially a driver.”
Although flagships such as the S-Class aren't typically found on conventional fleet choice lists, some company car drivers opted for prestigious, well-specified EVs when benefit-in-kind tax (BIK) tax on EVs was reduced to 0% in April 2020.
That has since risen to 4% and is poised to hit 9% in 2029/2030, but that remains significantly lower than BIK tax rates for ICE cars.
Where employers and suppliers have permitted it, drivers who may previously have chosen, say, a BMW 3 Series company car or equivalent have plumped for more aspirational models.
Peter Golding, managing director of fleet software and management specialist Fleetcheck, said expensive, heavily specified cars aren't helping EVs establish themselves in the used market and called for a greater emphasis on reasonably priced models with middling levels of equipment.
“The dilemma is changing now, because a lot of the Chinese imports are more economical and addressing the sub-£30,000-40,000 mark. What they will then do is feed that second and third owner with a desirable vehicle.
"But if you think of maybe a BMW 7 Series, for example, when you get to the third owner that vehicle is very, very cheap, because people are really concerned about it going wrong.
“I think some of the electric vehicles we’re dealing with have fallen into that trap, where they’re very complex and very expensive.
"What one has to look at is addressing the market in mind of third owners, and there are affordable electric vehicles that aren't necessarily loaded to the gunwales that attract that market.
"Companies can be a little bit more discerning with their choice lists and actually include vehicles that are going have better resale values in the long run.”
Pontin agreed that the used market would benefit from more affordable EVs and that reliability concerns have always dogged lavish cars but said there's nonetheless a market for them.
“There needs to be more cheaper EVs, because getting people into them is a cost thing," he said. "But when you come to the likes of the 7 Series, there is a market for that as a second, third and fourth owner, because people want to own the car that’s got all the kit on it. But by the time it gets to the second, third or fourth owner, there will be newer spec – suspension, the type of electric seat, the massage function, the panoramic roof – but they’re expensive to repair, and that’s where the big problem is.”
This isn't the first time that used EV values have been at the mercy of technological developments. The seminal Nissan Leaf and Renault Zoe came under frequent scrutiny in the 2010s, when specialists predicted that their desirability would be impacted when they were superseded by models with more advanced batteries and superior ranges, and battery development has consistently been on RV specialists’ lips.
EVs have been popular with used buyers seeking lower running costs since the Iran war began. Brego’s data reveals that used EV sales peaked at around 37,000 per month in March and April 2026, and although they softened to between 29,000 and 32,000 between May and August, they remained well above 2025’s monthly average of 22,790.