EV Resale Value vs Petrol and Diesel Cars: How They Really Compare in 2026

Depreciation at a glance (typical ranges)

The headline: EVs depreciate faster — on average

Depreciation is usually the single biggest cost of owning any car, and on this measure EVs have, on average, fared worse than combustion cars. Recent analyses put average five-year EV depreciation close to 59%, against roughly 45–46% for vehicles overall. Looking at three years, most non-Tesla EVs lose 45–55% of their value, compared with 35–45% for comparable petrol or diesel models.

That is the average. The spread around it is so wide that the average alone is almost misleading — which model you choose matters far more than whether it is electric.

Where the gap actually opens

In the first year, EVs and petrol cars depreciate similarly — both commonly lose 20–30% as they leave the showroom. The divergence happens in years two and three. Petrol cars typically shed another 15–20% in that window, while some EVs lose 25–35% as newer models arrive with more range, faster charging and better software at similar prices. In a fast-moving technology, last year's car ages quickly.

This pattern also explains why depreciation is so model-dependent. A petrol car competes mainly on mileage, condition and trim; an EV competes on all of those plus a rapidly improving spec sheet. The cars that hold value are the ones still seen as competitive two or three years on — strong range, good charging, ongoing software support — while those quickly outclassed by newer rivals fall hardest. Brand reputation and charging-network access widen the gap further, which is why two EVs launched at the same price can sit at very different values by year three.

Why EVs have depreciated faster

1. Rapid technical progress: each model year brings meaningful range and charging gains, making older cars feel dated.
2. Off-lease supply: a wave of leased EVs returning to the used market has outpaced demand and pushed prices down.
3. Incentive shifts: the end of the federal $7,500 new-EV credit (after 30 September 2025) cut new prices, dragging used values with them.
4. Battery uncertainty: buyers worry about battery health, even though large studies show packs hold up well — uncertainty alone depresses prices.

The big exception: strong-brand EVs hold up

Some EVs depreciate no worse than good petrol cars. The Tesla Model 3 and Model Y retain roughly 60% of value after three years and close to 40% after five — comparable to strong combustion performers — and used Teslas actually rose about 4.3% in early 2026 while the rest of the used EV market dipped. At the other extreme, several premium EVs such as the Porsche Taycan and Mercedes-Benz EQS have frequently lost 60–65% of their value by year five. The lesson: resale value is a model decision, not a fuel decision.

How to protect resale value

1. Choose a model with a proven resale track record and strong software support.
2. Keep the battery healthy — moderate daily charging, avoid extremes, and keep a recent state-of-health reading.
3. Maintain full service records and keep the car's software up to date.
4. Avoid over-customising; neutral, in-demand specifications resell better.
5. Be mindful of timing — values can drop when a longer-range successor launches.

The bottom line

Treat EV resale value as the largest uncertainty in any EV ownership calculation. On average EVs depreciate faster than petrol cars, but a well-chosen model with a strong reputation can match or beat combustion equivalents, while a poorly chosen one can lose far more. Run your own total-cost numbers with realistic — not optimistic — resale assumptions before you buy.