In 2025, China's new energy vehicle (NEV) market reached a historic turning point. Data from the China Passenger Car Association showed that the retail penetration rate of NEVs reached 52.3% for the full year of 2025, surpassing gasoline vehicles for the first time. However, in stark contrast to the booming new car market, the used NEV market faced a troubling reality: a collapse in residual values.
According to the 2025 Automotive Residual Value Report released by the China Automobile Dealers Association (CADA), the average three-year retention rate for pure electric vehicles was only 43.7%, compared with 57.6% for traditional gasoline vehicles. Some new energy vehicle brands saw their one-year retention rate fall below 60%, making the saying “lose half your money in one year” far from an exaggeration. Take a flagship model from a certain EV startup: priced at RMB 388,000 when new in 2023, its used car transaction price in 2025 was generally between RMB 180,000 and RMB 200,000 — a depreciation of nearly 50% in just two years.
Low retention rates have directly hampered the circulation efficiency of used NEVs. Data from multiple used car trading platforms show that the average inventory holding period for used NEVs is 60 days, nearly 20 days longer than for gasoline vehicles. Many dealers are reluctant to take in NEVs or will only offer very low prices. A used car dealer in Shenzhen admitted: “NEVs are being upgraded and replaced too quickly. A model bought last year gets a facelift this year, and battery technology is evolving fast. We’re afraid of being stuck with unsellable inventory.”
In response to this pain point, various industry players are exploring solutions. Battery makers such as CATL and BYD have launched battery testing and health grading services. NIO, with its battery-swapping model that allows independent valuation of the battery and the vehicle body, has achieved significantly higher used-car retention rates than its competitors. Tesla has tried to stabilise its price system through its official certified used car programme and limited-time guaranteed buyback offers. Industry experts point out that establishing a transparent and authoritative valuation system for used NEVs will be a key lever to unlock a multi-million-unit used NEV market.
