EV values falling nearly twice as fast as hybrids

DESPITE policy changes, hybrids are holding their value better than EVs – unwelcome news for EV residuals and their impact on lease rentals.

New analysis from Cox Automotive shows that in July hybrid vehicles under 24 months old held 68% of their original cost new (OCN), down by 22%, while electric vehicles of the same age dropped by nearly twice as much, to 49%. This compares to November 2022 when hybrid and EV values were almost the same (90% versus 88% respectively).

Recent policy shifts may challenge this resilience, Cox says, as owners of hybrid cars registered after 2017 now pay the same vehicle tax rates as petrol and diesel vehicles. Further, the Zero Emission Vehicle Mandate will see the sales of these cars phased out by 2035.

For now, hybrid vehicles continue to grow in popularity in the UK. New consumer data from Regit and Cox Automotive reveals that almost one in three (29%) of drivers are considering hybrid for their next vehicle purchase. Latest new car registration data also shows that year-to-date, PHEV registrations are up by 31.5% and HEV is up by 6.5%.

“Hybrid vehicles offer drivers an alternative, cost-effective solution for buyers who want to transition to a more sustainable form of transport but have concerns around range or infrastructure.”

Philip Nothard, Insight Director, Cox Automotive Europe Tweet

“This is driving demand for them in the used car market, which helps support stronger residuals. Additionally, these vehicles have a lower cost of entry than their electric equivalents, which means they hold their value better when entering the used market.”

He continued: “Hybrid vehicles deliver a clear lifetime cost advantage over internal combustion and electric vehicles, making them an attractive option for buyers hesitant or cautious about making the full electric transition. Yet, evolving government policy could undermine this potential if hybrid ownership becomes less financially viable.”