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Electric vehicle depreciation is the drop in an EV’s market value over time, measured against what the vehicle originally cost. It is the same change viewed from the other side as residual value, which is the share of the original price still left after a set number of years. Depreciation is always defined relative to a starting price, a period, a market, and a measurement method, so there is no single EV depreciation rate that applies everywhere.
What electric vehicle depreciation means
A US Senate hearing glossary, published through GovInfo, defines depreciation as the portion of an asset’s initial value lost after a period, and residual value as the portion of the original purchase price that remains after a number of years. Those two definitions describe one change in value. If a car keeps 70% of its price, it has depreciated by 30%.
| Term | What it measures | Simple form |
|---|---|---|
| Depreciation | Value lost since the starting price | Original value minus current value |
| Residual value | Value still remaining | Current value, often shown as a share of original value |
| Value retention | Resale value expressed as a percentage of original value | Resale value divided by original value, times 100 |
Because the three terms describe the same change, a figure quoted as “retention” can be converted to depreciation, and vice versa, but only if the starting-price basis and the period are the same.
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Use this sequence whenever you compare an EV’s value with its original price:
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- Fix the original value. Decide whether you are using the sticker price, the price actually paid, or another defined purchase-price basis, and write it down.
- Fix the resale value and its date. Use a sale price or a valuation for the same vehicle condition and mileage on a stated date.
- Calculate value retention. Value retention (%) = resale value ÷ original value × 100.
- Calculate depreciation. Depreciation (%) = 100% − value retention (%).
- Calculate the cash loss. Value lost = original value − resale value.
Worked example (hypothetical figures, not a market measurement): a vehicle bought for $40,000 and resold for $28,000 has a retention of 70%, a depreciation of 30%, and a value lost of $12,000.
Record the vehicle’s age or elapsed period, the geography, the valuation date, and whether the figure describes one car or an average across a group of cars. Averages can hide large differences. The IEA’s 2026 report cautions that monthly transaction volumes do not always support sales-weighted annual averages, that its annual figure uses the last month of the year, and that its series is not corrected for the average age of vehicles sold. The same report describes its 2025 US values as estimates because the underlying data were unavailable.
Current regional evidence from the IEA
The International Energy Agency’s Global EV Outlook 2026 is the most useful current overview of EV resale values, and its figures run through 2025. The table below lists each figure with the market, measure, period, and caveat the report attaches to it.
| Market | Measure | Figure | Period | Qualification |
|---|---|---|---|---|
| China | Three-year-old electric cars, retained value | About 46% | 2024 | Compared with about 55% across the broader used-car market in the same report |
| China | Average BEV and PHEV resale value | About 42% | Late 2025 | Reported in the same discussion; a period snapshot, not a model-level value |
| Five European markets (France, Germany, Italy, Spain, United Kingdom) | BEV retention rate | About 50% falling to about 35% | 2022 to 2025 | The report links the decline to used-car supply and demand rebalancing after a period of tight supply |
| United States | BEV resale values relative to the overall used-car market | Roughly 25 percentage points below the market | End of 2025 | Estimate; the report marks its 2025 US values as estimates |
The report also links a sharp 2023 reversal in US used-EV values to new-car price cuts by Tesla. These are market-wide observations for specific periods. They are not forecasts for a particular model, and they do not tell an individual owner what they will realize on sale.
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The IEA draws on Autovista, Black Book, and Cox Automotive for these series, with iSeeCars used for the US 2025 estimate and CADA also cited. Its explanation of the retention concept is direct: “A retention rate of 70% means that a product purchased new will lose 30% of its original value, on average, and sell at such a discount relative to the original price.”
Why EV values fall: the main drivers
Resale value responds to the used-car market as a whole, not only to how many miles a car has covered. The factors below explain why a given EV may lose more or less value than another vehicle.
New-vehicle pricing and model competition
When newer models improve or new-car prices fall, older used examples can become less appealing or need to be repriced. The IEA describes rapid battery-technology advances as one reason newer Chinese-market models have drawn buyers away from older electric cars, and it links Tesla’s price cuts to the US used-value movements described above.
Incentives and the purchase-price context
Incentives and manufacturer discounts change the price of new vehicles, which in turn changes the competition faced by used examples. A 2020 Kelley Blue Book article, dated June 26, 2020, identified tax breaks and price cuts as pressures on used EV values at that time. Treat it as a record of how those mechanisms worked then. Its policy details do not describe current incentive rules.
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Supply, demand and market structure
The IEA describes European retention declining as pandemic-era tight supply eased and used-car supply and demand rebalanced. A high retention rate in one period can therefore reverse without any change in the vehicles themselves.
Battery health and perceived repair exposure
The IEA identifies concerns about battery health and the possible cost of major repairs as factors that can make older EVs less attractive to buyers. This does not mean every used EV needs a battery replacement, and battery condition alone does not set a vehicle’s price.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Battery condition and whole-vehicle value
Battery degradation and depreciation are different measures. Degradation describes how the battery’s performance or capacity changes; depreciation describes the market value of the whole vehicle. A battery can age in a way that matters to a buyer without that fact being the only reason a car’s price changes.
A 2015 conference paper by NREL researchers Jeremy Neubauer, Eric Wood, and Ahmad Pesaran explains the mechanisms behind battery value in second-use modeling. In their modeled analysis, capacity fade had a larger impact on second-use value than growth in internal resistance. Where calendar aging outweighed cycling effects, the average battery temperature during automotive service had the largest effect on remaining second-use value. The paper concerns second-use batteries, not used-car resale prices, so it explains why battery history can matter but does not supply a current whole-car depreciation formula.
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Comparing EVs with gas cars or other EV models
Most depreciation comparisons go wrong because the two sides were measured differently. Before comparing two vehicles or two periods, check the following:
- Geography and any local incentives in force on each valuation date.
- Powertrain: BEV and PHEV figures are not interchangeable.
- Vehicle age, mileage, trim, and condition.
- The original-price basis, including whether it is sticker price or the price paid.
- The valuation date and whether the figure is a monthly, annual, weighted, or estimated value.
- Whether the cohort in each series has a similar average age.
The IEA’s annual-data limitations make false precision the main risk. A difference of a few percentage points between two averages is often within the measurement noise, especially when one series is an estimate.
Sources and dates
- IEA, Global EV Outlook 2026: the source for the regional resale-value figures; data run through 2025, and the report states the caveats noted above.
- US Senate hearing glossary, hosted by GovInfo: the source for the depreciation and residual-value definitions. It is a practical glossary, not a binding accounting standard.
- NREL, 2015 conference paper by Neubauer, Wood, and Pesaran: the source for the battery second-use mechanisms only.
- Kelley Blue Book, June 26, 2020: historical context on incentives and price cuts; not a current rate or policy source.
Use each figure with its market, measure, period, year, and source. Figures from different series are not directly interchangeable.
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Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
