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Knowledge base · 11 May 2026

EV depreciation in 2026: why this isn't 2023

The used EV market took a brutal hit in 2023 and 2024. The numbers in 2026 look different, and the reason matters for anyone buying used now.

EV depreciation has done most of the damage already. That's the short version.

A 2023 Tesla Model Y sold new for £52,000. By the end of 2024, the same car as a used 12-month example was changing hands for around £32,000. That's roughly 38% in twelve months, against a typical petrol equivalent that loses around 20% in its first year.

Two years on, the curve has flattened. The same 2023 Model Y at three years old is trading in the £24,000–£27,000 band today, against £32,000 at one year old. That's a further 22% over two years, or roughly 11% a year. Closer to a petrol car, well below the panic levels of 2023.

Why the 2023 collapse happened

Three things landed at once.

  1. Tesla cut new-car prices repeatedly through 2023. Every cut dragged the residuals of the same cars down with them. A used Model Y could not be worth more than a discounted new one.
  2. The salary sacrifice market matured. New EVs on three-year salary sacrifice leases started flooding back into auctions in 2023 and 2024, with the supply outstripping retail demand.
  3. Range anxiety lingered in the used market. Buyers were paying premiums for new long-range models and discounting used ones with less, even when the used ones easily covered most use cases.

All three pressures applied to the first three years of the used EV cycle. By 2026, the cars hitting the market are coming off auction at prices that already reflect every one of those forces.

What this means if you're buying now

You're buying after the dip, not into it. A 2023 car bought today at £25,000 is most likely worth £18,000–£20,000 in three years' time. That's £2,500 a year of depreciation, against a typical petrol equivalent at the same age losing perhaps £1,800 a year.

Yes, that's still faster depreciation. But the gap is roughly £700 a year, and the running cost saving on an EV at 12,000 miles a year is typically £1,500–£1,700 cheaper than the petrol equivalent. Net annual cost of ownership ends up lower, not higher, even allowing for the depreciation difference.

What still depreciates fast

Not every EV is at the bottom of its curve. The cars where depreciation remains brisk in 2026:

  • Very early Chinese-brand models with thin UK service networks. Resale demand hasn't built yet.
  • Long-range premium variants where the new-car price keeps moving (anything where the manufacturer announces a "more efficient battery" or "longer range" replacement).
  • Cars with non-replaceable batteries approaching their 8-year warranty cliff. The market discounts hard at year 7 even if the battery is still healthy.

What's holding value well

  • Mainstream family EVs from established UK brands (Skoda Enyaq, VW ID.4, Hyundai Ioniq 5, Kia EV6, Tesla Model 3 and Model Y in trims with reasonable range).
  • Specs that match the bulk of buyer demand: real-world range over 220 miles, DC fast charging over 100 kW, a heat pump, sensible boot space.
  • Cars under the £40k expensive car supplement threshold when bought new (relevant for VED implications on used resale).

The honest read

If you've been waiting for EV depreciation to "stabilise" before buying, 2026 is the year it has. The first three years of any new tech category eat the residuals; we are past those three years.

A used EV's future depreciation depends materially on its battery state of health at purchase — a car at 95% SOH today will lose less proportional value over the next three years than one at 88%. If you're buying used, the SOH report is the single most important due-diligence check, more than service history and more than mileage.

If you're buying a 2023 used EV at a sensible price today, the curve from here on resembles a petrol car more than a smartphone. Plan on £2,000–£3,000 a year of depreciation, factor it into the running cost comparison, and the maths usually still favours the EV.

A buyer report won't change market depreciation, but it will tell you which specific cars in your budget have already absorbed the worst of it, and which still have further to fall.