Chancellor Rachel Reeves faces growing calls to introduce tax relief for drivers as the government prepares to announce its 2025 spending review on Wednesday, June 11.
Industry leaders want urgent support to encourage more people to buy second-hand electric vehicles (EVs), warning that the health of the used EV market is critical to the UK’s net zero goals and economic growth.
Reeves confirmed £15 billion in funding for transport upgrades, including expanded bus services, new tram stops, and better rail access. But experts argue this investment must be matched with stronger incentives for people considering an electric car—especially a used one.
The British Vehicle Rental and Leasing Association (BVRLA) is calling on Reeves to act quickly, highlighting that demand for used EVs still lags behind where it needs to be. The BVRLA has already raised the issue with Roads Minister Lilian Greenwood and has now written directly to the Chancellor.
The group says the falling value of second-hand electric vehicles is damaging both consumer confidence and the financial models that support leasing and finance options. According to the BVRLA, used EVs lose more than half their value within two years—much faster than petrol or diesel cars. This rapid depreciation makes them harder to finance and less attractive to buyers, which in turn affects the new EV market as well.
To stabilise the situation, the BVRLA is proposing a time-limited package of measures, including grants or tax relief for people buying used battery electric vehicles (BEVs). The association has shared detailed plans with Treasury officials, including a joint proposal with the Green Finance Institute for a potential Market Stabilisation Scheme.
They describe the upcoming spending review as a “key moment to restore confidence” in the EV market and to ensure the electric transition supports both the economy and the environment.
The Society of Motor Manufacturers and Traders (SMMT) is also pushing for change. It wants Labour to cut VAT on new electric cars in half and review the Expensive Car Supplement, making EVs more accessible to more people.
According to Auto Trader, the average used car in May cost £16,825. In comparison, the average used EV cost £24,370—though prices have dropped 7.4% year-on-year. Interestingly, three-to-five-year-old electric cars now cost slightly less (£18,266) than equivalent petrol models (£18,731).
Sales of second-hand electric cars are growing, with 65,850 sold in the first quarter of 2025—a record 3.3% of the used car market. But industry voices say further support is vital to keep the momentum going and make EV ownership a realistic option for more drivers.
