Study finds electric vehicle depreciation gap smaller than leasing firms suggest

Transport & Environment research across four European countries reveals that electric vehicles lose value less dramatically than the leasing industry portrays, with industry claims overstating the depreciation gap by around 80 percent. When accounting for subsidies, tax differences, inflation, and fleet composition variations, the actual depreciation difference between electric and conventional vehicles shrinks from 12.9 percentage points to 2.6 percentage points. The findings suggest that stronger fleet electrification policies could create market stability that allows leasing companies to better manage vehicle depreciation risks.

Transport & Environment's research examined second-hand vehicle pricing across Germany, France, Italy, and Spain, comparing how electric and petrol-powered cars lose value over time. The analysis identified that industry depreciation estimates fail to incorporate multiple relevant factors, including government purchase incentives for new EVs, vehicle acquisition taxes, economic inflation rates, and variations in fleet composition across different markets.

Beyond these adjustments, additional factors related to price stabilization in the emerging EV market further narrow the depreciation gap. T&E argues that predictable regulatory frameworks create market conditions where leasing companies can better anticipate and manage financial risks associated with vehicle value retention, potentially enabling longer lease terms and expanded second-hand EV availability.