In this article
- How fast EVs really lose value: the segment numbers
- Model by model: the best and worst value-holders
- Why EVs depreciated so fast — four real causes, not a mystery
- The 2026 turn: used EV prices are converging with petrol
- New EVs are piling up while used ones fly off lots
- Battery health is now the number that sets the price
- The petrol comparison, done honestly — and the UK angle
- Depreciation is the biggest cost — but not the whole bill
- What this means if you're buying a used EV in 2026
- What this means if you're selling an EV in 2026
- The forecast: where EV residuals go from here
- Common questions
- About the author
- Sources
- Methodology & sourcing
EV Depreciation in 2026: How Fast Electric Cars Really Lose Value vs Petrol — With Real Numbers
By Liam Whitcombe, Used-Car & Residual-Value Analyst · Updated 17 June 2026
Here is the number that has scared buyers for three years: the average electric car loses 57.2% of its value in five years, against a market average of 41.8% and roughly 35% for a hybrid [1]. By that measure an EV is the worst-depreciating major segment on the road, and the reputation is earned. But here is the number almost no one has caught up to: in the first quarter of 2026 the average used EV sold for $34,821, just $1,334 more than the average used petrol car at $33,487 [6][8]. As recently as early 2023 that gap was more than $10,000. The depreciation story and the recovery story are both true at once, and which one matters to you depends entirely on whether you are selling an EV bought in 2022 or buying one in 2026.
This piece separates the two. EV depreciation is real, it was brutal, and it is now turning — and the same forces explain all three. Battery state of health, the death of the federal tax credit, the end of the new-EV price war and a glut of lease returns each pull on resale values in ways that are finally, in 2026, starting to point the same direction. Below: the model-by-model loss table, the mechanism behind it, the petrol comparison done honestly, and what the data says about timing a buy or a sale.
How fast EVs really lose value: the segment numbers
EVs depreciate faster than every other major vehicle type, but the whole market is holding value better than it did. The cleanest read comes from iSeeCars' value-retention study published in March 2026, which tracked retail prices from March 2025 to February 2026 [1]. It puts five-year EV depreciation at 57.2%, against 41.8% for the overall market, 35.4% for hybrids and 34.2% for trucks [1]. So an EV loses value about 15 percentage points faster than the average car and more than 20 points faster than a hybrid — the kind of spread that turns into real money on a $45,000 purchase.
Two things deserve emphasis. First, the market average itself improved: iSeeCars measured all-vehicle five-year depreciation at 41.8% in 2026, down from roughly 45% a year earlier, as the pandemic-era used-price spike continued to unwind [1]. Second, the EV figure, while still the worst, is being dragged in different directions by different models — the segment average hides a 9-point spread between the best and worst EVs, which is where the useful detail lives.
For a petrol benchmark: a typical gasoline car sits near the market average, losing around 40% over five years, while the best-retaining petrol models (sports cars and some trucks) lose far less [1][12]. Autoblog, summarising the same family of data, framed it as EVs depreciating "nearly 30% faster than gas cars" — a relative figure that sounds more dramatic than the absolute gap but describes the same reality [12].
Model by model: the best and worst value-holders
Brand and battery decide an EV's resale fate more than the badge "electric" does. The 2026 iSeeCars data shows the Tesla Model 3 holding value best among mainstream EVs, losing 54.6% over five years, with the Porsche Taycan essentially tied at 54.7% and the Hyundai Kona Electric at 56.5% [1]. At the other end, the Nissan LEAF is the worst value-holder of any EV at 63.1%, with the Volkswagen ID.4 at 62.1%, the Tesla Model S at 62.0% and the Tesla Model X at 61.2% [1].
The LEAF's position is instructive: it is an older design, many examples use air-cooled battery packs that degrade faster, and its modest range makes capacity loss bite sooner — exactly the traits used buyers now price in. The Model 3's strength is the mirror image: strong brand demand, a large used-buyer pool, and Tesla's own used-inventory machine setting a visible price floor. That Tesla's own flagship sedan (Model S) sits near the bottom while its volume sedan (Model 3) sits at the top tells you this is about specific models and their used-market dynamics, not "Tesla" or "electric" as a category.
| Vehicle | 5-yr depreciation | Retention | Verdict |
|---|---|---|---|
| Tesla Model 3 | 54.6% | 45.4% | Best mainstream EV |
| Porsche Taycan | 54.7% | 45.3% | Strong for a luxury EV |
| Hyundai Kona Electric | 56.5% | 43.5% | Above EV average |
| EV segment average | 57.2% | 42.8% | Worst major segment |
| Volkswagen ID.4 | 62.1% | 37.9% | Weak retention |
| Nissan LEAF | 63.1% | 36.9% | Worst EV retention |
| Market average (all cars) | 41.8% | 58.2% | Reference point |
| Petrol/gas (typical) | ~40% | ~60% | Holds value better than EVs |
| Hybrids | 35.4% | 64.6% | Best value retention |
The comparison table above lines these up against the petrol and hybrid averages. The honest takeaway is mixed: the best EVs (Model 3, Taycan) retain value close to the all-market average, while the worst (LEAF, ID.4) retain far less — and even the best EV still trails a typical hybrid by roughly ten points [1].
What that looks like in dollars
Percentages hide how much cash depreciation actually moves, so here is the same story in money. iSeeCars pins the five-year residual of a Tesla Model 3 at about $16,832 and a Model Y at roughly $18,868, after losses of 54.6% and 58.1% respectively [4][5]. Put a Model 3 next to a petrol benchmark that loses 40% over the same five years: on a $40,000 starting price, the EV sheds about $21,840 and the petrol car about $16,000 — a roughly $5,800 depreciation penalty for the EV, our calculation from the cited rates [1][4]. That is the real number behind "EVs depreciate faster," and it is large but not catastrophic — and it is partly offset by the EV's far lower fuel and maintenance costs over those five years. A LEAF tells a harsher tale: at 63.1% loss, a $30,000 LEAF retains only about $11,070, our calculation [1], which is exactly why early budget EVs became cautionary tales. The lesson buried in the dollars is that model choice, not the EV badge, governs most of the gap.
Why EVs depreciated so fast — four real causes, not a mystery
EV depreciation was never a single defect; it was four forces stacking. Naming them matters, because three of the four are now weakening, which is the whole reason 2026 looks different.
The first and biggest was the $7,500 federal tax credit. It applied only to new EVs and could not transfer to a second owner, so it permanently pushed new prices below where the used market wanted to sit [11]. When a new Model 3 could be had for $7,500 off, a one-year-old one had to be cheaper still to sell — a built-in discount cascading down the age curve. The second was price cuts on new EVs. Tesla's repeated 2023 reductions knocked used Tesla values down by close to 30% in a single year, and where Tesla led, others followed [12]. The third is the technology cycle: EVs improve on a roughly 18-month cadence — more range, faster charging, better software — so a three-year-old EV can feel a generation behind in a way a three-year-old petrol car never does [11]. The fourth is battery anxiety: even when real degradation is modest, the fear of range loss and a five-figure replacement bill depresses what buyers will pay [11].
Notice what changed. The tax credit ended on 30 September 2025, removing the single largest source of downward pressure on used values [11]. New-EV price cuts have largely run their course, with new non-Tesla EV prices down only 2.3% over the four months after the credit expired while Tesla used prices actually rose [2]. And battery anxiety is colliding with real-world data showing modern packs last far longer than feared (more below). Only the technology cycle still cuts cleanly against older EVs. Three of four headwinds are easing at once — that is not a coincidence, it is the inflection.
The 2026 turn: used EV prices are converging with petrol
The defining used-car story of 2026 is that EV and petrol prices have nearly met. Cox Automotive's Q1 2026 figures put the average used EV at $34,821 and the average used petrol car at $33,487 — a gap of just $1,334, versus more than $10,000 in early 2023 [6][8]. Used EV sales rose 12% year over year to 93,500 units, even as new EV sales fell 28% after the credit's end [8]. Buyers, in other words, fled the new market and poured into the used one, and the extra demand firmed prices.
The momentum reads clearly in the indices. The Manheim Used Vehicle Value Index ended 2025 at 205.5, up 0.4% year over year, and Cox forecasts a "relatively normal" 2026 with the index up about 2% [7]. Crucially, the EV slice of that index outperformed: EV values rose 2.5% year over year in December 2025 against just 0.4% for non-EVs, and EVs posted year-over-year gains for nine straight months [7]. iSeeCars' shorter-window data agrees on the split within EVs — between September 2025 and January 2026 used Teslas rose 4.3% while all other used EVs fell 3.6%, with the Model X up 10.3% and Model S up 8.5% [2].
This is why the headline 57.2% five-year figure and the near-parity pricing coexist. The 57.2% reflects cars bought new in 2020–2021, at high prices, that lived through the 2023 price collapse — it is a backward-looking measurement of the worst possible five-year window. The 2026 transaction data reflects forward-looking demand for those same cars now that they are cheap. A statistic about the past and a price about the present can both be right.
New EVs are piling up while used ones fly off lots
The clearest sign of where EV values are heading is the split between the new and used markets, which moved in opposite directions in early 2026. New EV sales fell 28% year over year in Q1 2026, to 212,600 units, as the loss of the $7,500 credit pushed the average new-EV transaction price to about $55,300 and left dealers sitting on 130 days of new-EV inventory — 46% more than the 89 days for petrol cars [8][6]. A new-car glut at high prices is a recipe for discounting, but with the federal credit gone, automakers are absorbing that pressure rather than passing a clean $7,500 down the chain.
Used EVs did the reverse. Volume rose 12% to 93,500 units, days' supply sat at a tight 42 days — barely above the 38 days for used petrol cars — and prices firmed [8][6]. The mechanism matters for residuals: when new EVs are expensive and scarce on incentives, the used ones a tier down look like genuine bargains, and that demand is what put a floor under used values for the first time since 2022. iSeeCars captured the same rotation from a different angle: used-EV market share slipped from 3.5% to 2.8% over the four months after the credit ended even as Tesla prices rose, meaning the buyers who remained concentrated on the models that hold value [2]. The new market's pain is, paradoxically, the used market's support.
There is a forward risk in this picture, and it is supply. Cox expects the EV share of wholesale auction volume to climb through 2026 as a wave of 2023–2024 lease returns matures and hits the block [7]. More used EVs arriving at once is the one force that could re-open the depreciation gap, which is why the timing advice later in this piece matters: the floor under used EV values is real but not unconditional.
Battery health is now the number that sets the price
In 2026, an EV's resale value is decided less by its odometer than by its battery's state of health. State of health (SOH) — the usable capacity remaining versus when the car was new — has become "the single biggest factor in used-EV pricing," with a car at 90%+ SOH commanding a clear premium over an otherwise identical car at 75% [16][17]. That is a genuine shift: petrol resale never had a single dominant mechanical metric the way EVs now have SOH.
The reassuring part is that real degradation is mild. Geotab's analysis of more than 22,700 EVs found average degradation of about 2.3% per year, leaving roughly 81.6% of original capacity after eight years [13]. The rate rose slightly from the 1.8%/year of Geotab's earlier study, driven by heavier fast-charging use: vehicles that DC-fast-charge above 100 kW for more than 12% of sessions degrade at up to 3.0% per year, double the rate of gentler users, and hot climates add about 0.4 points a year [13][24]. Newer chemistries do better still — Recurrent finds second-generation EVs have a battery-replacement rate of just 2%, against 8.5% for first-generation cars, and LFP packs appear to degrade more slowly [10]. The broader research has begun to flip the old assumption entirely: one widely-cited 2025 study concluded that in most cases the battery will now outlast the rest of the vehicle, reframing the pack from the car's weakest component to one of its more durable ones [15]. That reframing is slowly reaching used buyers, and as it does it removes the single largest source of the "battery anxiety" discount that dragged EV residuals down for a decade.
The age and mileage profile of today's used EVs reinforces the point. Recurrent's Q1 2026 data shows 55% of used EVs on sale are 2023-or-newer, 68% are 2022-or-newer and 82% are 2020-or-newer — overwhelmingly modern cars with liquid-cooled, longer-life packs rather than the early air-cooled designs that gave EVs their depreciation reputation [10]. As the fleet's composition shifts toward those better batteries, the segment's average residual should improve for reasons that have nothing to do with the economy and everything to do with engineering.
The practical consequence for resale is twofold. A well-kept EV — mostly home-charged, moderate climate, a Gen-2 or LFP pack — will increasingly hold value better than the segment average, because buyers can now verify its SOH and pay up for it. A hammered one — heavy DC fast-charging, hot region, early chemistry — will sell at a discount the market never used to quantify. For the first time, EV depreciation rewards how the car was used, not just how old it is. Any used-EV purchase in 2026 should start with an SOH report, not the mileage.
The petrol comparison, done honestly — and the UK angle
Against petrol, EVs still depreciate faster, but the gap is narrower than the scariest figures suggest and is closing. In the U.S., the petrol/market average loss is around 40–42% over five years versus the EV segment's 57.2% — a real difference, but one concentrated in the weakest EV models [1]. Hybrids are the genuine standout, losing only 35.4%, which is the value-retention case for a hybrid if depreciation is your top concern [1].
The UK market tells a similar but milder story, and it is worth a look because Britain's used-EV market matured a year ahead of America's. UK data from Cox Automotive Europe and Cap HPI puts average EV depreciation at roughly 38–42% after three years, against 35–40% for an equivalent petrol car — a gap of only a few points, far tighter than the U.S. five-year spread [16]. Some UK sources cite a wider divide (around 61% for EVs against 47% for petrol over three years), reflecting how badly early, short-range EVs fared, so treat any single UK figure as directional [17][18]. What both markets agree on is the trajectory: UK analysts expect EV residuals to "stabilise and improve" through 2026–2030 as the 2022–2024 fleet-return glut clears, battery transparency improves and confidence grows [16]. The convergence is a cross-Atlantic phenomenon, not a U.S. quirk.
One caveat keeps the comparison honest: the U.S. five-year and UK three-year figures are measured over different windows and markets, so they are not decimal-comparable. The pattern — EVs behind, hybrids ahead, the gap narrowing — holds in both; the exact numbers do not transfer.
Depreciation is the biggest cost — but not the whole bill
Depreciation deserves the attention it gets, because it is the single largest cost of owning almost any car — but read it next to the fuel and maintenance ledger before drawing conclusions. For a typical new car, depreciation dwarfs fuel, servicing and insurance combined over the first five years, which is why an EV's 15-point depreciation disadvantage looks alarming in isolation. The mistake is stopping there. The same EV that depreciates faster also charges for a fraction of petrol's per-mile fuel cost and skips oil changes, exhaust work, timing belts and most of the wear items that fill a petrol car's service history.
Put rough numbers on it. Take that $40,000 Model 3 losing about $5,800 more to depreciation than a petrol equivalent over five years [1][4]. Against that, a home-charged EV driven 12,000 miles a year can save well over $1,000 a year in fuel versus a petrol car at typical U.S. pump and electricity prices, plus several hundred a year in avoided maintenance — our illustration, not a quote — which across five years can recover most or all of the extra depreciation. The depreciation gap is real money, but it is not money that vanishes from the owner's pocket; a large share is handed back through the running-cost side that resale-value headlines never mention. This is exactly why a total-cost-of-ownership view, not a depreciation table alone, is the right lens for an EV-versus-petrol decision.
The corollary for buyers is sharper still. If you are buying used, you skip the steepest part of the depreciation curve entirely — the first owner already absorbed the worst of the 57.2% — while keeping the full fuel-and-maintenance advantage for the rest of the car's life. That combination is what makes a 2022 EV bought in 2026 one of the more rational value purchases on the used market, provided the battery checks out. Heavy depreciation is a wealth transfer from the first owner to the second, and in 2026 the EV market is unusually generous to whoever buys second.
What this means if you're buying a used EV in 2026
For a buyer, 2026 is arguably the best value window the used-EV market has offered. The price collapse that punished early owners is exactly what makes today's used EVs cheap, and the data backs the bargain: a used EV is on average a year newer with about 30,000 fewer miles than a petrol car at the same price, and for cars under $20,000 the EV is two years newer with 40,000 fewer miles [10]. Some 39% of used EVs sell under $25,000, and 55% are 2023-or-newer model years — recent cars at discounted prices [10].
The buyer's checklist is short but non-negotiable. Lead with the battery SOH report, because it now sets the price and the risk [16]. Favour a Gen-2 or LFP-battery model over a first-generation, air-cooled pack like an early LEAF, whose 63.1% depreciation is a warning as much as a discount [1][10]. Check the car's charging history if available — a life of gentle home charging beats one of constant high-power DC fast-charging [13]. And remember the running-cost side of the ledger: an EV bought cheap because it depreciated hard still charges for a fraction of petrol's per-mile fuel cost, which is where the total-ownership maths can swing back in its favour.
What this means if you're selling an EV in 2026
For a seller, the worst is likely behind you, and timing now favours patience over panic. If you bought new in 2021–2022 and have watched your EV shed half its value, the 2026 data says the bleeding has largely stopped: used EV values rose for nine consecutive months into late 2025 and three-year-old EVs have recently outpaced petrol equivalents [7][11]. Selling into a rising, supply-tight used-EV market beats selling into the 2023 rout that created these depreciation figures in the first place.
Two levers are within a seller's control. The first is proving battery health — getting an independent SOH report and leading the listing with it converts the market's biggest worry into your biggest selling point, especially if the number is 90%+ [16]. The second is timing against lease returns: Cox expects EV influence on used values to grow through 2026 as a wave of lease maturities returns to auction, which adds supply and caps prices [7]. Selling earlier in that wave, rather than into its peak, is the difference between a firm price and a soft one. The era of EVs being an automatic depreciation disaster is ending; the era of EV resale being a function of battery health and timing has begun.
The forecast: where EV residuals go from here
The base case for 2026–2028 is gradual improvement, not another collapse. The forces that crushed EV values — the transferable new-car credit, the new-EV price war, first-generation battery fear — have either ended or are fading, while the supports — tight used supply, modern longer-life packs, verifiable battery health, near-parity pricing — are strengthening [11][7][13]. Cox Automotive's read on the wider market is "a relatively normal year," with the Manheim index forecast up about 2% and EVs expected to gain influence as they hold value better than non-EVs [7]. That is the most constructive backdrop EV residuals have had since the segment went mainstream.
The honest counter-case is supply. A large cohort of 2023–2024 leases matures into 2026 and 2027, and if those cars hit auctions faster than demand absorbs them, the used-EV floor could soften again — the one scenario that re-widens the gap with petrol [7]. The outcome will not be uniform: strong-brand, good-battery EVs (Model 3, Taycan, newer LFP models) should keep converging toward petrol-like retention, while weak-brand, early-chemistry cars (older LEAFs, first-run compliance EVs) may stay near the bottom of the table regardless of the macro picture [1][16]. Depreciation, in other words, is de-averaging: the segment number matters less every year, and the specific car matters more.
For anyone weighing an EV in 2026, that is the practical bottom line. Do not buy or sell on the 57.2% headline — it describes the worst five-year window in EV history and a fleet of cars that no longer represents what is on sale. Price the individual car: its brand, its battery health, its chemistry, and the supply wave it is selling into. Done that way, EV depreciation stops being a reason to avoid electric and becomes just another line in the total-cost math — one that, for a used buyer, increasingly points in their favour.
Common questions
Do EVs depreciate faster than petrol cars? Historically yes. In 2026 EVs lost an average 57.2% of value over five years, versus a 41.8% market average and about 35% for hybrids [1]. But the gap is closing fast — used EV prices are now within roughly $1,334 of comparable petrol cars, and three-year-old EVs have recently held value better than petrol [6][7].
How much does a Tesla Model 3 lose in five years? About 54.6% of its value — the best retention of any mainstream EV in the 2026 iSeeCars data, better than the 57.2% EV average and close to the whole-market figure [1].
Which EV holds value best, and which is worst? Best: the Tesla Model 3 (54.6% loss) and Porsche Taycan (54.7%). Worst: the Nissan LEAF (63.1%) and Volkswagen ID.4 (62.1%) [1]. Brand demand, battery chemistry and range explain most of the spread.
Why have EVs depreciated so fast? Four forces: the $7,500 new-EV tax credit undercutting used prices, repeated new-EV price cuts (Tesla used values fell ~30% in 2023), a fast ~18-month technology cycle, and battery-life anxiety [11][12]. Three of the four are now easing.
Does the federal tax credit ending help or hurt EV resale values? It should help. The $7,500 credit only applied to new EVs, so it constantly pushed new prices below used ones; with it gone after 30 September 2025, that pressure on used values eases — part of why used EV prices firmed in late 2025 and early 2026 [11][7].
How much does battery health affect a used EV's price? It is now the single biggest factor in used-EV pricing — a 90%+ state-of-health car commands a clear premium over a 75% one [16]. Average degradation is mild, about 2.3% per year, leaving roughly 81.6% capacity after eight years [13].
Is 2026 a good time to buy a used EV? For value, yes. Used EVs are a year newer with about 30,000 fewer miles than petrol cars at the same price, 39% sell under $25,000, and prices have stabilised [10]. Get a battery state-of-health report before you buy.
About the author
Liam Whitcombe — Used-Car & Residual-Value Analyst. Liam tracks used-vehicle pricing and residual values for ChargeCostLab, reconciling auction indices, retail listings and battery-health data into a clear read on what a car will be worth later. He takes no payment from dealers, automakers or auction houses, and every figure in this article traces to the named market source listed below.
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© 2026 ChargeCostLab. Independent EV cost analysis. Depreciation and resale figures are market averages from the dates and sources cited and will change as supply, demand and battery data evolve. Informational only, not financial advice. Last reviewed 17 June 2026.
Methodology & sourcing
Scope. Five-year and three-year value retention for battery-electric vehicles (BEVs) versus petrol/gasoline cars, with hybrids and trucks as reference points. U.S. data leads; UK figures are included for cross-market comparison and labelled as such. Current to June 2026.
Depreciation figures. Five-year U.S. depreciation by segment and model comes from the iSeeCars value-retention study published 24 March 2026 (data March 2025–February 2026) [1]. "Depreciation %" is the share of original price lost; "retention" is its complement. Short-term price movements (the post-credit period) come from iSeeCars' EV market study [2]. UK three-year residuals come from Cox Automotive Europe and named UK sources [16][17].
Market and pricing. Used and new EV volumes, average transaction prices and the EV-to-petrol price gap come from Cox Automotive's Q1 2026 data [6][8] and the Manheim Used Vehicle Value Index [7]. Used-inventory age, mileage and price bands come from Recurrent's Q1 2026 used-EV report [10].
Battery health. Degradation rates and state-of-health figures come from Geotab's study of 22,700+ EVs [13] and Recurrent [10]. Battery state of health (SOH) is the usable capacity remaining versus when new.
Every number carries a source marker; any figure I computed is labelled "our calculation". Depreciation is path-dependent — trim, mileage, region, battery health and timing all move it — so treat model figures as averages, not guarantees.