A wave of used electric vehicles is building and for carmakers, it could become a financial storm.
By 2028, as many as 800,000 off-lease EVs are expected to enter the used car market. What once helped accelerate adoption is now exposing a growing problem; electric vehicle depreciation is happening faster than the industry predicted.
EV Leasing Losses Surge as Residual Values Collapse
Leasing made EV ownership easy and lower monthly payments and government incentives pushed more drivers to try electric cars without long-term risk.
But as those two- and three-year leases expire, automakers are facing a harsh reality. At the end of 2025, a typical three-year-old EV retained less than 50 percent of its original value.
That is a sharp drop from 2022, when many EVs held close to 90 percent of their value over the same period. The result is mounting EV Leasing Losses, with analysts estimating an average loss of about $10,000 per vehicle, adding up to $8 billion by 2028.
Automotive Residual Value Risk Hits Major Brands
Brands with heavy leasing exposure are expected to feel the greatest pressure. These include Tesla, General Motors, Hyundai-Kia, and Ford.
The issue lies in Automotive Residual Value Risk, the gap between what a car was expected to be worth and what it actually sells for. For EVs, that gap is widening fast.
Rapid advances in battery range, charging speed, and software mean that a three-year-old model can feel outdated. Unlike petrol cars, which age gradually, EVs are evolving at tech speed.
EV Battery Degradation Concerns Weigh on Buyers
Another factor dragging prices down is uncertainty around EV Battery Degradation. While studies suggest batteries last longer than many fear, buyers remain cautious. Unlike traditional engines, battery wear varies depending on usage and charging habits, making resale values harder to predict.
This uncertainty often pushes buyers to demand lower prices.
Certified Pre-Owned EV Programs Offer a Lifeline
Automakers are now looking for solutions. Many are expanding Certified Pre-Owned EV Programs to boost confidence in used vehicles. Others are working with dealers and auction platforms to move inventory faster.
Lower prices are also attracting budget-conscious buyers who want EVs without paying new-car costs. Still, the scale of incoming supply may test the system.
A Market at a Crossroads
Real-world experiences highlight the problem. One owner of a Porsche Taycan GTS said he paid around €65,000 to buy out his lease only to find the car now worth about €40,000.
“That’s the market,” he said, noting he would sell it for even less.
As the flood of used EVs approaches, the industry faces a key question, can demand keep up with supply?
The answer will determine whether this becomes a thriving second-hand EV market or a costly lesson in overestimating the future.
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