New research has warned that the ZEV Mandate will continue to drive down residual values of electric vehicles.
According to Indicata’s latest Market Watch, the ZEV Mandate is now the main destabilising factor for residual values of electric vehicles.
Its data revealed in the last quarter of 2025 the market share of used electric vehicles remained static at 6.8% while stock levels rose to eight per cent. Prices meanwhile have remained constant for four months.
Dean Merritt, Indicata UK’s head of sales, said: “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 breakthrough in consumer demand.
“There remains a strong argument that unstable used values could slow overall EV adoption and it’s too early to tell whether cheaper new EVs being sold will translate into strengthening the second-hand market as only small numbers have reached auction.”
Electric vehicles
New electric vehicles made up 23.4% of all sales last year, behind the ZEV Mandate target of 28%. This is despite discounts from vehicle manufacturers of about £5bn, or £11,000 per car.
Merritt concluded: “The SMMT claims that discounting EVs has cost OEMs a total of £5bn but if this continues and the used market takes another dive it will further impact all those companies that underwrite used values.
“Retail prices of used EVs have already fallen by 20% since January 2024 and the industry cannot afford for a similar fall without compromising vendor profitability and higher monthly leasing and finance rates.”
