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LONDON, 26 October 2023: KBRA UK presents a comprehensive research report delving into the residual values (RV) of battery electric vehicles (BEVs) and hybrid electric vehicles (HEVs) within the European Union (EU) and the UK auto markets.
This analysis comes at a time when the adoption of eco-friendly vehicles has witnessed substantial growth in these regions. KBRA’s research reports have previously highlighted this transformative trend. However, the question arises as to whether these green vehicles maintain their value in the secondhand market after years of proliferation. In this report, we delve into the recent trends in the value of used cars in the European auto market.
Residual Values Amid Supply and Demand Dynamics
The research reveals that the pandemic-related supply-and-demand dynamics continue to exert a significant influence on the secondary market values of vehicles. The disruption in the supply of new vehicles during the pandemic led to an increased demand for used vehicles. Buyers shifted their attention to available products, resulting in elevated values for most secondhand cars.
Declining Resale Values of BEVs
Notably, the research brings to light a sharp decline in the values of used battery electric vehicles (BEVs) in both the UK and EU. Several factors contribute to this decline, including increased secondary market supply for BEVs, new vehicle incentives such as grants and tax breaks, technological advancements that extend the range of newer vehicles, and challenges in infrastructure and the industry, particularly related to charging, repairs, and insurance.
Powertrain Values and Growth
The research further explores the values of three-year-old used vehicle powertrains. These values are dependent on jurisdiction and powertrain type. In most cases, these values are currently above their pre-pandemic levels from January 2020.
Comparison of Residual Values
The research provides a detailed comparison of residual values (RVs) for various vehicle categories:
- RVs for EU and UK petrol vehicles have seen increases of 16.5% and 27%, respectively.
- RVs for EU and UK BEVs have experienced declines of 6% and 31%, respectively.
- HEVs have shown more resilience in retaining their secondhand values, with RVs for the EU and UK up by 7.5% and 11.3%, respectively.
Role of BEVs and HEVs in the Secondhand Market
Despite the significant growth in new vehicle sales in recent years, BEVs and HEVs still constitute a relatively small part of the overall secondhand market. Transaction volumes for secondhand BEVs represent 3.8% of EU market sales and 3.7% of UK market sales. In the case of HEVs, they represent 12.2% of EU market sales and 13.3% of UK market sales.
Conclusion
KBRA’s research sheds light on the complexities of resale values for eco-friendly vehicles in the European auto market. While the pandemic has driven a surge in used vehicle demand, BEVs face specific challenges that impact their secondhand value. Understanding these dynamics is crucial for buyers and sellers in the rapidly evolving landscape of electric and hybrid vehicles. Stay informed to make informed decisions in this shifting market.
