The used EV market is beginning to take shape in Australia—and fleet managers need to understand both its risks and opportunities.
Speaking at the 2025 AfMA Fleet Summit, Mike Costello (Corporate Affairs Manager, Cox Automotive) and Matt Hobbs (former CEO, MTAA) provided timely insights on how residual values are evolving and why battery State of Health (SoH) testing is becoming critical.
“We’re at the very beginning of this process of seeing former fleet sector EVs come through our auction lanes,” said Costello. “But we’re already collecting some pretty interesting insights.”
A Wave Is Coming
Since 2022, over 200,000 EVs have been sold in Australia. Many were fleet or novated lease vehicles.
“You do the maths—there’s going to be an enormous wave of these vehicles coming into the wholesale markets pretty much from the second half of this year onwards,” Costello warned.
Already, public EV auction sales are up more than 4x this year, though they still represent only 0.5% of public sales volume.
“Residual challenges clearly impact total cost-of-ownership calculations, offsetting lower running costs,” Costello said.
The Residual Value Gap
Costello shared current auction data highlighting the stark reality for used EVs:
| Model | Age at Sale | Average RV |
|---|---|---|
| Tesla Model 3 SR Plus | 3-4 years | 56% |
| Nissan Leaf | 4-5 years | 35% |
| MG ZS EV | 3-4 years | 41% |
| Hyundai Kona EV | 4-5 years | 40% |
By comparison:
- Nissan Qashqai ST: 63%
- Hyundai i30 Active: 67%
- MG ZS Excite: 60%
- Hyundai Kona Go (petrol): 72%
Why EV Residuals Are Under Pressure
Several factors are dragging EV resale values:
- Tesla’s price cuts across 2024.
- Chinese EVs entering the market with deep discounts.
- Older EV tech rapidly becoming outdated.
- Government incentives focused on new or near-new EVs.
- Consumer concerns about battery reliability.
“This will inevitably change,” Costello added. “More EV choice makes the market more robust. Battery health testing will become normal. Consumer sentiment will shift.”
The Value of Battery State of Health Certificates
Offering a battery State of Health (SoH) certificate is proving to be one of the most effective ways to boost used EV values based on experience from Europe.
“75% of buyers expect a State of Health certificate when buying from a dealer,” said Costello.
And the benefits are clear:
- 81% of buyers see dealers with SoH programs as more trustworthy.
- 22% more buyers would consider an EV if SoH is provided.
- 55% of new EV buyers would consider used if a battery SoH certificate is available.
The auction benefits are tangible too:
- EVs with a SoH certificate fetch €550–€1,100 higher value.
- 15% higher clearance rates.
- 23% more bidders.
“It’s an incredibly important part of the overall puzzle,” said Costello. “We need to make sure that we’re doing all we can to mitigate against the depreciation issue.”
OEM Tips to Support Used EV Residuals
Costello offered this advice for OEMs and fleet remarketing partners:
- Offer SoH at resale.
- Explore guaranteed future value (GFV) and buyback programs.
- Enable battery repair (don’t write off vehicles unnecessarily).
- Avoid open RRP price cuts that destroy used value.
- Share battery scores openly, following examples like Polestar.
“State of Health certificates will become just like an odometer check,” Costello predicted.
“It’s the new normal we need.”
Hybrid Strength Shows the Way
There is some good news in the electrified market—hybrids are currently performing very strongly.
Auction data shows:
- Toyota Corolla Hybrid RV = 90.7%, Petrol = 88.3%.
- Toyota Camry Hybrid RV = 89.5%, Petrol = 78.2%.
- Toyota RAV4 Hybrid RV = 94.6%, Petrol = 78.6%.
“Hybrid cars are actually incredibly strong,” Costello said. “That should give some confidence when it comes to procurement strategies, at least in the short term.”
The Message for Fleet Managers
Costello and Hobbs made it clear that fleet managers need to engage with this issue now:
✅ Understand EV residual trends—build realistic TCO models.
✅ Demand battery SoH testing at disposal.
✅ Push OEMs and FMO partners to offer SoH and GFV options.
✅ Watch hybrid performance—they remain a strong option while the used EV market matures.
“We all want the second-hand EV marketplace to be stronger than it currently is,” said Costello.
“State of Health is one of the key tools to get there.”
