The zero-emission vehicle (ZEV) mandate is set to continue as the UK’s “biggest risk” to future EV residual values.
That the view of Indicata from its latest Market Watch used car insights report.
Indicata believes the UK regulatory framework — and the ZEV mandate in particular — now stands as a “key destabilising factor” for residual values.
It said its data showed the rise in ex-fleet EV stock is gradually translating into oversupply on the used-car market, putting residual values under sustained pressure.
In the last quarter of 2025 and January 2026 Indicata saw the market share of used EVs remain static at 6.8% while stock levels continued to rise to 8%.
“While EV prices have remained static for the past four months the overall used market is finely balanced with fleet vendors cautious not to inject volumes of used vehicles faster than the market can absorb.
Indicata has seen Market Days’ Supply (MDS) increase from 42 days in October to 57 days in early January. MDS is derived from dividing the current supply of inventory by the average daily retail sales rate over the past 45 days.
“The UK used-car market is no longer about accelerating electrification, but of managing its impact on the used market. While ICE vehicles continue to provide stability and anchor the liquidity of the UK used-car market, we are waiting for lower used EV prices to translate into a decisive breakthrough in consumer demand,” said Dean Merritt, Indicata UK head of sales.
“There remains a strong argument that unstable used values could slow overall EV adoption and it’s too early to tell whether cheaper new EVs being sold will translate into strengthening the second-hand market as only small numbers have reached auction,” he added.
New EV sales achieved a market share in 2025 of 23.4% despite some aggressive marketing and pricing from OEMs, against an overall ZEV Mandate target of 28%. Despite not hitting the 2025 ZEV mandate target it increased to 33% in 2026.
