EV Depreciation Crisis: How Battery Uncertainty Is Undermining Global Fleet Sustainability

The resale value of electric vehicles is in freefall, sparking a financial crisis for ride-hailing, rental, and logistics fleets committed to sustainability. When India’s BluSmart—an all-electric ride-hailing pioneer—collapsed in April 2025, its fleet of cars, originally worth over $12,000 each, sold for a mere $3,000, flooding the market and exposing a harsh reality: EVs depreciate 42-60% within three years, far outpacing the 20-39% drop for gas vehicles. At the heart of this turmoil lies a technological blind spot—battery longevity. Unlike combustion engines with century-old valuation metrics, EV worth hinges on a single, enigmatic component, turning depreciation into an existential threat for operators who rely on predictable asset values.

The Stark Data Behind the Value Plunge

Recent studies quantify the crisis. In the U.S., a 2023 Tesla Model Y loses 42% of its value after two years, while a same-year Ford F-150 depreciates just 20%. Globally, three-year-old EVs shed over half their worth (vs. 39% for gas cars), with older models faring worse. The fallout is brutal for fleets: Hertz reported a $2.9 billion loss in 2024 after offloading 30,000 Teslas—purchased for $40,000+—at under $20,000 each. By October 2025, a Model Y listed at $27,000 reflected a 40% nosedive from its original $45,000 price.

Hertz resold Teslas like this Model Y at massive losses, highlighting fleet vulnerabilities.

“Fleets feel EV residual risk the most because they model total cost of ownership to the decimal and remarket thousands of units,” says Jack Carlson, CEO of Carvai.ai. “Retail buyers worry about battery health—fleets worry about exit prices.”

Why Batteries Break the Valuation Model

EV depreciation stems from inadequate frameworks for assessing battery health—the core determinant of value. Gas cars rely on odometers and maintenance histories, but EV batteries lack standardized lifespan metrics. Andrew Garberson of Recurrent explains: “Electric cars have fewer moving parts, and a lot of the value is tied up in one component. We’re rebuilding valuation models from scratch using real-time battery degradation data.” Regional factors compound this: North America’s vast distances and temperature extremes accelerate value loss compared to EV-friendly markets like China or Norway, where supportive policies and charging infrastructure bolster confidence.

Fleet Operators on the Brink

For corporations, depreciation isn’t just inconvenient—it’s catastrophic. Fleet vehicles in high-mileage markets like India degrade three to four times faster than personal cars. BluSmart’s collapse left Uber and rivals wary of purchasing its assets due to battery concerns, while Everest Fleet backer Anirudh Damani warns, “Without predictable residual value, even profitable fleets become unviable.” This jeopardizes global electrification pledges from Uber, Lyft, and others, with McKinsey reporting only 10-20% of consumers currently considering EVs.

Pathways to Stability: Data and Decoupling Risk

Emerging solutions focus on demystifying battery health. Recurrent’s research reveals modern EV batteries degrade just 1-2% annually, with only 1% of post-2016 models needing replacements (vs. 13% for older EVs). “Data is building confidence in used batteries,” says Garberson. “As that rises, so will resale prices.” Battery-as-a-service models—where operators lease batteries separately—decouple this risk, offering cost predictability. Certified pre-owned programs and standardized health reports are also gaining traction, slowing the innovation cycle that once spooked buyers. As EVNet’s Johnny Beckett notes, 2026 may bring a market reset, turning transparency into the cornerstone of EV sustainability.

Source: Ananya Bhattacharya, Rest of World