Fluctuating demand is creating a heightened degree of uncertainty for buyers and sellers.

“The moment for electric cars is now,” proclaimed the website of rental start-up Onto.

“Once you get behind the steering wheel and feel what they’re capable of, we know there’s no going back.”

The Warwick-based company matched words with actions, amassing one of Britain’s biggest EV-only fleets with 7,000 cars overall. The Telegraph has the story.

Instead of leasing or selling the vehicles, customers were offered “hassle-free subscriptions” that included a car, insurance, maintenance and even charging from £359 a month.

Yet today customers are greeted with another message, explaining that Onto Holdings Limited was placed into administration in September.

According to accounts for the first seven months of 2023, Onto was forced to write down the value of its EV fleet by £21m – more than its total revenues for the same period.

Administrators for Onto blamed the company’s collapse on a “steep fall” in the value of electric cars, rising interest rates and the impact of the cost-of-living crisis on drivers’ disposable income. It was unable to secure additional funding from its shareholders as a result, administrators Teneo added.

Onto is far from alone in having suffered these challenges.

Second-hand EV prices plunged across the board last year, as manufacturers including Tesla slashed prices and a wave of ex-lease and rental vehicles flooded the market.

As experts have pointed out, this has long been predicted and it is generally good for consumers, the vast majority of whom only buy used cars.

But the trend has also dealt a blow to others – namely, companies and early adopters who paid higher prices and will now recoup less of their investment.  

For the moment, used EV prices are stabilising again as the bargains available stoke strong demand, says Marc Palmer, head of insights at Auto Trader.

But with competition in the new car market intensifying, there are fears Chinese brands will seek to undercut their European rivals by slashing prices further – causing further ructions for second-hand sellers.

“That is the big question – ‘will the Chinese come in more cheaply?’”, says Palmer.

“We think they could, because they sell their cars more cheaply in China than they do in Europe. So they’ve got the ability to start more aggressive pricing.

“And if new cars become more affordable, then prices of used cars will probably need to come down a bit to make sure they still provide value for consumers.”

That could make more grim reading for existing EV owners, who have already been clobbered in the past year.

Based on figures for December, Auto Trader found that an EV costing £50,000 is currently expected to lose about £24,000 of its value after just three years on the road, significantly more than the typical £17,000 reduction seen with petrol cars.

Some of the worst-hit cars include the Renault ZOE, which has shed 56pc of its value on average and now sells for £7,700, according to separate data from Motorway.co.uk. Meanwhile, the Volkswagen ID3 fell by 41pc and the Nissan Leaf lost 40pc.

Read the full story here.