Used luxury electric cars are depreciating faster than their petrol and diesel equivalents, according to valuation specialist Brego. The company cited forecast data for luxury models from Mercedes-Benz, Porsche, Volvo and Genesis, showing an average retail residual value difference 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 analysed were the Mercedes EQS and S-Class, the Porsche Taycan and Cayenne, the Volvo XC90 and EX90, and the Genesis G80 and Electrified G80. Brego's head of insight and communication, Rupert Pontin, told Autocar that the residual value percentage is generally lower for luxury EVs, pointing to the pace of battery evolution as a partial driver.
Mercedes shows the widest gap
Mercedes recorded the starkest difference between EV and ICE residual values, which broadly increased over time. The ICE version held a 5.9% advantage 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 bias in favour of the EV, consistent over the four years and again increasing 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.
Battery evolution cited as a driver
Pontin told Autocar that the reasoning is partly the arrival of solid-state batteries, which could double the range of today's luxury EVs. He questioned who would want a used luxury car, often used as a chauffeur or private hire vehicle, when at a year old or in two, three or four years it has that range. Even without jumping to solid-state, he said, battery evolution is constant and that is partially a driver.
The analysis covers forecast data for specific luxury models, not the entire electric car market. Brego's figures compare like-for-like pairs from four manufacturers, and the sources do not indicate whether the depreciation gap applies to cheaper electric cars or only to luxury models.
Tax changes shaped fleet choices
Although flagships such as the S-Class are not typically found on conventional fleet choice lists, some company car drivers opted for prestigious, well-specified EVs when benefit-in-kind tax on EVs was reduced to 0% in April 2020. That rate has since risen to 4% and is poised to hit 9% in 2029/2030, but remains significantly lower than BIK tax rates for ICE cars.
Where employers and suppliers permitted it, drivers who may previously have chosen a BMW 3 Series company car or equivalent have plumped for more aspirational models, according to Peter Golding, managing director of fleet software and management specialist Fleetcheck.
Cash values not disclosed
The sources give the residual value gaps only as percentages, not as cash amounts. Brego's forecast data does not state the monetary difference in pounds between the EV and ICE models at each age, and no cash values have been announced.
