Diverging captive PCP APRs for BEV and ICE underline the growing role of finance policy — not just pricing — in influencing retail demand.

Of late, industry reports have been awash with stories about weak EV residual values. ASI offers an alternative lens.

The narrative is familiar: EVs depreciate faster than ICE vehicles, residual values are under pressure, and electrification presents an increasing challenge for finance providers.

The data certainly appears to support that view when Guaranteed Future Values (GFVs) are measured against manufacturers' list prices.

But what if we're using the wrong benchmark?

At ASI, we looked at the same question through a different lens: transaction prices.

After all, very few customers pay list price. Across the market, government grants, finance incentives, discounts and retailer contributions mean the actual transaction price is often materially lower than the headline price used in many residual-value comparisons.

When EV GFVs are measured against transaction prices rather than list prices, the picture changes significantly.

The average EV GFV rises from 38.7% of list price to 45.4% of transaction price — an uplift of 6.7 percentage points.

Using ICE vehicles as a reference point tells a similar story. On a list-price basis, the gap between EV and ICE GFVs stands at 3.7 percentage points. On a transaction-price basis, that gap falls to just 0.7 percentage points.

This doesn't mean residual-value challenges have disappeared, nor does it suggest every EV is performing strongly in the used market.

However, it does suggest that some of the more alarming depreciation narratives may be overstating the issue by relying on list prices that bear little resemblance to what customers actually pay.

The lesson is simple: the benchmark matters.

When residual values are measured against real-world transaction prices, EV performance looks considerably more resilient than many headlines suggest.

Source: Automotive Services International / Kantar promoCAR