How carnage in the Used Car market is impacting BEV adoption in Europe

Munich, March 2024

How carnage in the Used Car market is impacting BEV adoption in Europe

Munich, March 2024



Governments in Europe unanimously share the vision that electrifying the vehicle fleet is the best way to achieve a more sustainable future. With its new regulation, which states that from 2035 all new cars and vans registered will have to be zero-emission versions, the European Union is a global front-runner in the adoption of electric vehicles.

However, this places OEMs under a lot of pressure to update their vehicle portfolio within a relatively short time span. In order to maintain a profitable business case, nearly all OEMs initially focused on producing rather pricy high-end SUVs. Cost parity between comparable new BEV and ICE vehicles has still not been achieved in most cases and, in particular, affordable vehicles in the smaller segments are yet to be launched. For instance, FIAT is offering the electrified version of its 500 with a premium of 78% and even Jaguar’s high-end SUV F-Pace is one third cheaper than its electrified brother (according to UK list prices). This pricing policy limits the overall size of the potential buyer group and prevents the BEV market from moving from early adopters to the mass market.

Average advertised prices of new electric vehicles in the UK

Source: AutoTrader as of 17.01.2024


After some initial strong growth – also fueled by high government tax incentive schemes – the relative market share growth of battery electric vehicles (BEVs) is gradually slowing down across Europe.


Increasing relative share of BEV in EU5 registration volume (2017-2023), (registered cars in thousands) 

Source: Berylls Strategy Advisors, ACEA

Whilst the share of BEV registrations across all drivetrain types is steadily increasing for the top 5 EU markets (14% in 2023), the momentum of growth is slowing down (+23% in 2023 vs. +103% in 2021 for the top 5 EU markets). BEV customer subsidies are being increasingly reduced in many EU markets (e.g., subsidies for corporate and private cars in Germany were terminated at the end of 2023).


Increasing size of registered BEVs in EU5 (2017-2023), (registered cars in thousands)

Source: Berylls Strategy Advisors, ACEA

However, differences in BEV adoption exist across EU5 countries, with every fifth newly registered car being a BEV in Germany in 2023 whereas only every 20th to 25th new car was a BEV in Spain or Italy.


Increasing relative share of BEVs per EU5 market registration volume (2017-2023), (all figures in %)

Source: Berylls Strategy Advisors, ACEA


We identify the BEV used car market as one of the key reasons for this slowdown, combined with affordability issues due to challenging economic conditions with high interest rates.

Used BEVs are performing significantly worse than ICEs throughout top European markets with regard to their residual values. On average across Europe, more than 50% of the initial value is lost after an average of three years and 60,000 kilometers.


Comparison of residual values along drive trains (BEV, Diesel, petrol), (all figures in %)

Source: Berylls Strategy Advisors, Autovista24, part of the Autovista Group

The situation is leading to a significant excess value loss for BEVs compared to ICEs, especially when factoring in the higher initial new car prices of BEVs.

In Germany, on average BEVs had an excess residual value loss of 13% compared to petrol vehicles in December 2023. The rest of Europe’s top 5 markets displayed similar tendencies with excess residual value losses ranging from 13% (Spain) to 21% (Italy) when comparing BEVs to petrol vehicles. Apart from Spain and France, used cars in all top 5 European markets have lost drastically in residual value. In the UK, the residual value of BEVs plummeted dramatically from 63% to 40% in the course of 2023.

Based on an average new BEV list price of EUR 43,529 as stated by Autovista Group for Germany in December 2023, the absolute amount of excess loss of an average BEV compared to an average petrol vehicle is 13%, which equals EUR 5,659 compared to the initial list price. Looking at a 36-month lease contract with a total of 60,000 km, this would make a BEV EUR 157 more expensive per month compared to a petrol car, just to cover the excess loss and excluding interest effects, in addition to the higher lease installments due to the higher list price.

Likewise, lower residual values also affect new car lease contracts, as providers will try to pass on higher depreciation to their customers. An analysis conducted by Transport & Environment in 2023 reveals that across major European markets, leasing companies charged consumers 57% more to lease an EV compared to an equivalent petrol model.


Comparison of residual values per car of BEV vs. Petrol and Diesel in DE, (rounded figures, December 2023)

Source: Berylls Strategy Advisors, Autovista24, part of the Autovista Group


The calculation is even more alarming when the initial incentives funded by taxpayers’ money are also taken into account. The current market & technology immaturity is turning out to be a gigantic value burn.

Just assuming the gap between the residual value developments of BEVs and petrol vehicles remains constant in the future, the additional value loss of all the 524,000 BEVs registered in Germany in 2023 in three years’ time compared to petrol vehicles will equal EUR 2.99 billion. The figure surpasses the total of German BEV tax incentives (BAFA environmental bonus) of EUR 2.4 billion for all eligible BEVs in 2023.


Excess in loss in residual value of BEVs outpaces environmental bonus in DE in 2023

Note: Excess in residual value loss as aggregation of excess loss of residual value per BEV to petrol (13%) of 524.000 registered BEVs at avg. list price of 43.529 EUR in 2023 in Germany

Source: Berylls Strategy Advisors, Autovista24, part of the Autovista Group

The value losses become even more apparent when comparing the residual values of similar BEV and ICE models:

Upfront price difference based on stock advertised on



In Germany, less than one third of new vehicles are bought by private customers. On the other hand, more than two thirds of all new cars are registered to corporate customers. The greatest share is the ‘true fleet’ segment, which comprises fleets of company cars, either for particular purposes or as an employee incentive. The second biggest segment comprises vehicles registered for tactical reasons by OEMs or their dealer networks, which are typically brought to the market later with discounts. Rental fleets also make up a relevant part of the total fleet.

Sales Split per channel in Germany in 2023 Total vs. BEV only

Source: Berylls Strategy Advisors, KBA

According to information from Dataforce, there was a setback in electrification following the final ending of the environmental bonus (BAFA) in 2023. During the last few months, the bonus was only eligible for private customers, which explains the decrease in the corporate segment. In the private market, the BEV-related share of new registrations fell from 35% in December 2022 to just 11% in December 2023. The share of BEVs in fleet registrations also remains at a low level.

BEV trend in vehicle registrations over the last 24 months in Germany (in thousand)

Source: Dataforce

A large number of these vehicles are sold via lease contracts that are typically returned to the leasing company at the end of the contract. Based on information from Dataforce, in 2023, 29% of private BEV customers opted for a leasing offer while the overall share of private customers taking the leasing option was only 7.2%. In the fleet segment, the majority of vehicles are bought via lease contracts.

In total, that leaves a majority of the residual value risk accumulating with the financial services companies of OEMs (Captives) or independent (Non-Captive) leasing companies.


Automotive dealers and OEMs are therefore currently seeing a drastic decline in demand for used BEVs, which is placing further pressure on resale values. As long as residual values continue to decline, it is hard to make a positive business case for buying a new or almost new electric vehicle due to this value loss. Even the cheaper cost of operation – drastically depending on actual cost for electricity – cannot compensate for this loss.

In an interconnected model, these factors also have an impact on demand and the sales prices of new BEVs.

Looking at the current price discounts for new BEVs in Germany, it becomes apparent that OEMs and dealers will need to continue discounting BEVs in order to stimulate at least a certain level of demand. A recent analysis presented by the German newspaper Auto Motor und Sport based on price data from leading automotive platforms (,, shows that in January 2024 the average discount was 18% compared with an average discount of 21% in 2023. This point is especially interesting as environmental subsidies (BAFA) were terminated at the end of 2023. Therefore, OEMs and dealers within the German market are giving discounts at their own expense to offset the lack of a government bonus.

Discount comparison for selected BEV models in the German market

Source:,,; all figures are rounded; last update: January 2024

From our perspective, there are several trends that reinforce one another, limiting the attractiveness of owning a BEV and potentially leading to a carnage in the BEV market in the coming months:

  • After years of disrupted supply chains, vehicle availability is back to a fast supply, which is generating an overstock of new BEVs. The situation is resulting in price pressure and reduced production shifts

  • In 2023, Tesla leveraged its healthy unit economics and initiated several rounds of price discounts that negatively impacted the residual values of the total existing BEV fleet

  • High stock levels at OEMs and dealerships are further aggravating the situation with BEVs continuously coming in from the first user cycle of early adopters of BEVs

  • New BEV market entrants from China are still behind with their sales targets and thus likely to use price reductions as a tool to win market share
  • Customers still have very little experience with BEV technology and wonder how long used batteries will last, what ranges are realistic, and at what mileage the carbon-intense battery production amortizes its footprint during use compared to an ICE. As technology is progressing, customers will expect more mileage in the future due to improved technology and rather postpone their transition towards BEVs

  • The state of battery health in used BEVs is still a big question mark for many potential buyers, as the charging behavior has a strong influence on the battery lifetime and limited information and standards on battery history are reducing customer trust
  • As described earlier, the lack of medium- to low-priced electric vehicles is still excluding large potential buyer segments from the BEV market. Although used car prices are strongly declining, overall price levels are still higher than what many customers can afford
  • OEMs are increasingly leveraging their financial services arms (Captives) to offer highly incentivized leasing rates to increase the ‘take’ rates of BEVs. In an environment of relatively high interest rates, competitive leasing rates can only be offered by anticipating relatively high residual values. As we illustrated before, this is not very likely and the pressure might increase once these leased vehicles return to the used car market in a few years, i.e., today’s sales volumes will be bought at the expense of future residual value losses
  • According to data from, search queries for BEVs decreased from 5.8 million in 2022 to 5.4 million in 2023. However, the number of BEVs offered on the platform significantly increased from 17,000 in 2021 to 74,000 in 2023. On average, list prices were EUR 42,718 for a BEV on However, the price customers are willing to pay stands at EUR 23,946. Therefore, the price gap between offering and demand is more than twice that of ICEs
  • The majority of BEVs were sold to fleet customers, especially rental fleets. Most of them are reducing the share of BEVs in their fleets, stating challenging residual values, low customer demand and high operating costs as the key reasons
  • Customers are concerned about an insufficient charging infrastructure withsstill a rather low ratio of registered BEVS to charging stations in most EU markets. We expect a rise from a ratio of currently 17 BEVs per public charging point in 2023 to 24 BEVs per public charging point in 2030 within the EU


Overall, the outlook for OEMs, their Captives, leasing companies, and auto dealers can appear rather daunting in the next few years with regard to electrification. In order to stay profitable in the BEV market going forward, we at Berylls see several levers that need to be utilized in order to be successful. In our upcoming series, we will further deep-dive into these fields.

  • Customer Experience & Sales Funnel Management: review your BEV Customer Journey and install intelligent BEV Funnel planning, steering and optimized media spend to accelerate omni-channel touchpoint conversions & drive conversions
  • Pricing: apply effective and consistent pricing strategies across the complete new and used BEV portfolio to secure and optimize profitability Learn more
  • Remarketing: centralize & optimize remarketing activities as well as establish digital direct-to-consumer remarketing channels to increase customer loyalty
  • Multi-cycle sales models: manage vehicles on one’s own balance sheet over multiple years via non-ownership Vehicle-as-a-Service models (VaaS) to control the residual value curve and maximize the vehicle lifetime value (VLV) Learn more
  • 4R (recycling, remanufacturing, reuse, refurbishment) & circularity: leverage upcoming stricter regulations regarding the recycling of batteries and vehicle components and apply different life cycles for the vehicle and the battery up to the recycling stage Learn more
Christopher Ley


Michael Dümig

Project Manager

Philipp Neubauer

Senior Consultant

Felix Riebel


Christopher Ley

Christopher Ley joined Berylls by AlixPartners (formerly Berylls Strategy Advisors) in October 2021 as Partner. He has over 14 years of top management consulting experience with focus on new business models and market expansions within the automotive & mobility industry. He is an expert around Vehicle-as-a-Service, comprising vehicle finance & leasing, fleet management and mobility services. Christopher Ley is advising OEMs, Captives, Financial Services Companies, PE & VC Investors, Leasing & Rental Companies, Fleet Managers and Mobility Startups around the transformation from one-time sales towards use-based multi-cycle business models on a global level.

Prior to joining Berylls, Christopher Ley has been working for other international management consulting firms, amongst others Monitor Deloitte and Alvarez & Marsal. He holds a diploma degree in business administration from Johannes Gutenberg-Universität in Mainz and an MBA from Colorado State University.