The latest Indicata Market Report issues a warning on the potential hit to BEV used car values as carmakers push to hit ZEV Mandate targets for 2026.
It said at the end of September, the UK new car market was around 265,000 BEV registrations short of meeting the ZEV Mandate’s year-end target of achieving 33% BEV sales penetration.
If OEMs decide to heavily discount new BEVs during Q4 to meet their individual ZEV Mandate targets, these discounts could “negatively impact” the recovery of used BEV prices.
In October cap hpi said competition in the new car market is affecting used values, with manufacturer discounts and pre-registered stock putting pressure on nearly new prices. Vertu Motors boss Robert Forrester has also said the new car market is now firmly in push mode.
“The ZEV mandate sets the share of new cars that must be electric and year-end discounts can work their way down the market and test the fragile recovery in used BEV values. We don’t want to get to a stage where residual values foot the bill for the industry chasing the ZEV Mandate targets,” explained Dean Merritt, Indicata’s National Retail Strategy Manager.
This coincides with used BEVs boosting the lowest Market Day’s Supply of any powertrain at 38 days during October. Demand continues to exceed supply with retail sales currently accounting for 10.0% of overall market sales against 7.75% of stock.
That compares with diesel where supply is exceeding demand due to high fuel prices. Diesel had the highest MDS of any powertrain at 56 days in October and accounted for 21.2% of used car sales against 25.1% of the industry’s stock.
MDS is derived from dividing the current supply of inventory by the average daily retail sales rate over the past 45 days. A lower number signifies high demand and quick sales.
Indicata has seen used BEV prices rise by 2% since the summer with demand fuelled by lower running costs compared with ICE cars, and a growing appetite from dealers to sell used BEVs.
Overall, the current used car market’s sweet spot is for three to four-year old cars which account for 24.0% of overall market stock and 27.1% of sales as buyers opt for a combination of age and price. With cars up to two years of age that balance is reversed accounting for 27.1% of market stock and only 23.5% of sales.
“The used market is delicately positioned as we move into the final few weeks of 2026. Following a quiet two weeks of trading over October half term we expect the used market to pick up until closer to Xmas and its seasonal slowdown,” said Merritt.
