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EV residual values 2026: assessing purchase risk

How technology changes, battery ageing and market prices affect EV residual values — and how to model that uncertainty.

An electric car's future value depends on model changes, battery health, charging performance and used-car demand. These factors make residual-value forecasts uncertain, so the cost comparison should treat residual value as an editable assumption.

Why technical development affects residual value

New model generations may offer more range, shorter charging times or different battery technology. This can change demand for older models. The effect on an individual vehicle also depends on price, use, condition and available charging infrastructure.

Four factors that affect resale

1. New battery and vehicle technology

Manufacturers are developing solid-state batteries and more efficient lithium-ion systems, among other technologies. New technology may change demand for existing models. Its timing and price effect cannot be predicted reliably for an individual vehicle.

2. Battery health

State of health (SOH) describes the battery's remaining capacity. A documented battery report can help buyers assess its condition. The effect of capacity loss on price depends on factors such as range, age and warranty cover.

3. Manufacturer price changes

Lower new-car prices or larger discounts can put pressure on the resale price of young used cars. The effect does not have to match the new-car price change. Model, specification and regional demand also matter.

4. Tax and incentives

Changes to incentives, tax or usage rules can affect both ownership cost and demand. The direction and size of any price effect depend on the specific policy and market conditions.

How leasing allocates residual-value risk

With a mileage-based lease, the leasing company estimates the future vehicle value. Market-related differences from that estimate generally remain with the leasing company. You remain responsible for the agreed mileage, servicing and vehicle condition.

What matters at return

You return the vehicle under the conditions set out in the agreement. Excess mileage, missed servicing or damage beyond normal wear may lead to additional charges. The general market price is a separate issue.

Conclusion: compare residual-value assumptions

Buying gives you the future sale proceeds and exposes you to the risk of a lower market price. Leasing limits that market risk but adds contract costs and return conditions. Compare both options using several residual-value assumptions rather than one forecast.

Compare residual-value assumptions

About the author

Hi, I'm Michael. I wanted to compare leasing and buying for my own car decision using the same assumptions, including tied-up capital. My Excel model became Carculated.

Email Michael