Oliver Phillpott, CEO of Generational, explores why battery condition is becoming an increasingly important part of understanding the value and risk of used electric vehicles. Drawing on Generational’s battery testing data, he looks at the limitations of relying on age and mileage alone, the role of State of Health and cell-level insight, and what needs to change to give fleets, lessors, remarketers and buyers greater confidence in the used EV market.
Used EV Week comes at an important juncture in the wider context of the automotive industry.
For leasing companies, rental businesses and fleet operators in particular, gaining a meaningfully detailed understanding of used EVs, and how to value and ultimately remarket those assets with confidence, is consistently high on the agenda.
As our transport electrifies, an increasing proportion of the industry’s balance-sheet exposure is effectively becoming battery exposure, which ultimately must lead to a fundamental recalibration of the residual value equation.
For decades the used car market has relied heavily on age and mileage as shorthand for vehicle condition. They remain useful indicators, but electric vehicles expose the limits of that approach. At the end of the day, the fact of the matter is that battery condition does not track neatly with either.
Our own data has repeatedly shown that two vehicles that have very similar age and mileage, can have batteries in very different conditions. Given that the battery is the main component of value in an electric vehicle, it is clear that battery State of Health should be taken into account as part of the vehicle valuation. In many ways, the State of Health of a battery is in fact a much more accurate and direct measure of value in an electric vehicle than mileage in the condition of an ICE vehicle.
Businesses with used EVs on their balance sheets should have access to the detail that demonstrates the full extent of the condition of those vehicles. Average age, mileage and specification is helpful, but by no means the final word.
There is another fundamental difference between an EV and the vehicles the used market has traditionally valued. At some point in an older combustion vehicle’s life, a sufficiently large mechanical repair can make the vehicle uneconomic. With an EV, battery condition is the thing that increasingly influences that point.
A replacement battery pack is unlikely to make economic sense in a vehicle worth only a few thousand pounds. That means the condition and repairability of the battery are intrinsically tied to the remaining useful life, and therefore value, of the entire vehicle.
Yet our valuation infrastructure does not fully marry up to that reality today. Battery condition is still not built into valuation guides; it is not routinely presented as structured, searchable information on used-car marketplaces, and different participants in the remarketing chain can still be looking at the same EV without a common, trusted condition signal.
Without visibility, the market prices in a degree of uncertainty. Good vehicles risk being undervalued because buyers cannot easily distinguish them from poorer examples. Vehicles with genuine problems risk being overvalued and disappointing customers because those issues remain hidden.
Somewhere in that process, the financial impact lands on the party carrying the residual value exposure.
The obvious answer is a standardised State of Health figure, which gives the market a straightforward indication of how much capacity remains compared with the battery when new. For a consumer considering a used EV, that is exactly the kind of headline measure the industry should be able to provide.
But this number does not describe everything happening inside a battery containing hundreds of individual cells. A battery that has aged relatively uniformly and one containing an emerging weak cell can potentially present similar headline capacity figures. Those are very different risk propositions, especially where the pack design does not allow individual modules to be replaced.
Capacity tells us how much energy a battery can hold. It does not necessarily tell us whether individual cells are behaving correctly, or whether an emerging problem is repairable. As a result, we need to look one step deeper into the battery.
An EV battery is built from several hundred cells, connected in parallel groups which are wired in series. The whole whole pack is limited by its weakest group. Charging stops when the first cell group reaches its upper voltage limit so a weak cell can limit the whole battery.
Our recent analysis of around 10,000 used EV battery tests illustrates why. The typical battery has very well balanced cells, with a median difference of approximately 8 mV between its highest- and lowest-voltage cells. But roughly one in 100 tests showed an imbalance above 50 mV that warranted deeper investigation, while around one in 200 showed a serious imbalance above 100 mV, which would likely warrant a module or pack replacement.
The vast majority of batteries are performing well; it’s important to remember that. This doesn’t represent another reason to fear EV batteries, far from it. It helps those in industry distinguish the healthy majority from the small number of vehicles that genuinely deserve closer attention. That is how a functioning market should manage risk.
State of Health belongs in the valuation. Cell balance belongs in the inspection, with an auditable result ahead of any change of ownership. A cell-level check at defleet lets the lessor decide whether to have an issue fixed – normally under warranty – before disposal, or to sell the vehicle as is. Trade buyers, in turn, will want comfort that the car will not come back to them with a battery problem after sale.
There is some progress on standardisation, with Euro 7 introducing an in-vehicle battery-health measure for new EU type approvals from November 2026, extending to all new registrations from November 2027. That is the sort of step towards making battery condition more visible and comparable that we all need to see.
But it does not solve the immediate challenge facing the used market, as it will not retrospectively apply to the millions of vehicles already on the road and entering remarketing cycles during this decade. Nor does a headline capacity figure, on its own, identify the individual vehicle most likely to have an issue.
Regulation will only go so far in providing the answer for businesses taking residual value risk; the primary part needs to come from the infrastructure, which industry needs to build out now, in earnest.
That should include a consistent methodology for producing and certifying State of Health, so that buyers can compare like with like. Existing industry work such as CARA’s Battery Health Check gives the sector something to build upon rather than requiring every market to invent its own standard.
It should also mean going beyond capacity during defleet and pre-sale inspections. If we would never assess the mechanical condition of an ICE vehicle purely by reading its odometer, we should not assess the battery condition of an EV using just a single number.
And crucially, the commercial side needs to catch up with the technical capability. Valuation companies need enough evidence linking verified battery condition with transaction prices to begin incorporating it meaningfully into residual value models. Marketplaces should ultimately make battery health a structured, filterable part of a vehicle listing rather than a line buried in free text.
Considering all of this, however, the overwhelmingly positive story emerging around EV battery longevity remains the same. Our previous analysis of more than 8,000 electric cars and vans found average battery health of 95.15%, while even eight- to nine-year-old vehicles retained a median 85% State of Health. High-mileage vehicles can also perform extremely strongly.
The data increasingly tells us that widespread premature battery degradation is not the systemic threat many once feared. But nevertheless, strong averages do not mean every battery is identical. As the used EV parc grows and ages, understanding the difference between individual vehicles will become more commercially important, not less.
For fleets and lessors, that means better holding-period and defleet decisions. For remarketers, it means knowing which vehicles require attention before they reach auction or retail. For finance providers, it means pricing risk around evidence rather than uncertainty. For retailers, it means greater confidence in acquisition and pricing. And ultimately, for consumers, it means knowing that the EV they are buying is reliable, and being valued on its actual condition.
So the implications of this go much further than the used market. Stronger residual values feed directly back into the economics of new vehicles, leasing rates and fleet renewal. When uncertainty forces the market to discount perfectly healthy used EVs, the cost ultimately works its way through the entire vehicle lifecycle.
Looking at the bigger picture, Used EV Week is the perfect opportunity to recognise that battery condition is becoming fundamental financial information. What now needs to mature is the market infrastructure around it. We can take encouragement that battery degradation is not the systemic risk many once assumed. But battery opacity is.
