€3 Billion in Subsidies: A Catalyst for Residual Value Pressure ánd Cross-Border Trade

What happens when well-intended government policy rapidly changes the rules of the used-car market?And what if that same measure creates new opportunities — but only for dealers who have their processes and capabilities in order?

The German government has announced an investment of approximately €3 billion over the coming years in a new purchase subsidy for electric vehicles. The objective is clear: to stimulate new EV sales. Less visible, but at least as relevant, are the consequences for the used-car market — in Germany and beyond.

Residual values under structural pressure

Residual values of used EVs in Germany have been under pressure for some time. Acceptance of used electric vehicles among private buyers continues to lag expectations, while supply is increasing. In 2026, an additional factor will come into play: large volumes of EVs that were placed into service several years ago as lease vehicles under the BAFA subsidy scheme are now returning to the market.

For leasing companies, dealers, and used-car traders, this is not a theoretical risk but an immediate challenge affecting inventory levels, financing, and margins. Increased supply combined with cautious demand leads to an unstable price floor — precisely at the moment many vehicles are entering their second life cycle.

When “new” suddenly competes with “used”

The new German purchase subsidy ranges from €3,000 to €6,000, depending on income level, and applies to vehicles priced up to €45,000. This creates direct competition between subsidised new EVs and young used models.

This effect is amplified by the fact that a significant share of recent new registrations were self-registrations or rental fleet vehicles — cars that are also returning to the used-car market this year, but without eligibility for subsidies. Many German dealers therefore expect this specific segment to experience additional downward pressure on residual values.

For financing partners, this situation further increases uncertainty: the value of rolling fleets and on-hand inventory becomes less predictable. There is a real risk that losses on these vehicles could exceed the benefit of the subsidy itself.

International trade as a structural release valve

As with previous market disruptions, international used-car trade will absorb part of the surplus. Price and demand differences between European countries make cross-border transactions economically rational.

In practice, however, not every dealer responds immediately. Germany has a strong export reputation through platforms such as Mobile.de, yet many German dealers and traders remain cautious when it comes to VAT risks, documentation, compliance requirements, and questions from banks or accountants. This caution is understandable — but it also increases the likelihood that price pressure will persist longer than necessary.

In a market with rising volatility, export is becoming less of an emergency option and more of a strategic capability. Not every dealer needs to become an exporter, but those who rely exclusively on the domestic market are accepting increasing residual-value and financing risk.

Strategic options to reduce residual-value risk

Vehicle redeployment

In the Netherlands, redeploying ex-lease EVs as “used-car lease” vehicles has proven to be a viable business case in recent years. Relatively stable monthly revenues combined with limited additional depreciation helped partially offset residual-value risk. In Germany, Gebrauchtwagen Leasing has existed for some time, but typically with strict age and mileage limits. Whether these limits will be relaxed to reduce residual-value pressure remains to be seen.

Differentiation in an overcrowded market

As the supply of used EVs increases, differentiation becomes essential. Especially in international transactions, buyers want precise clarity on what they are purchasing. The condition of the battery pack represents the largest financial risk. Yet only a limited share of the EV supply (16% of listings on Mobile.de) currently includes a State of Health certificate. For dealers who take export seriously, transparency around battery condition can make the difference between waiting and selling quickly.

Investing in export capabilities

Demand for used EVs is European, while supply is increasingly concentrated locally. In that context, strengthening export capabilities is not a luxury but a form of risk diversification. Export does not have to be complex — provided that processes, checks, and documentation are properly set up in advance and can be replicated across multiple transactions.

Export requires more than a buyer

Cross-border trade does not end with agreement on price. Banks, accountants, and tax authorities expect insight into the counterparty, payment flows, and VAT treatment. Incomplete documentation or unintended involvement in VAT fraud can result in significant fines and personal liability, with serious consequences for business operations and financing.

Novatrade24 is a platform that takes over the complex compliance work involved in export. Instead of fragmented checks and manual documentation, the platform guides automotive dealers, leasing companies, and marketplaces — in just a few clicks — toward a fully compliant export file. Novatrade24 performs KYC and KYB checks and structures all relevant data and documents within its Click2Comply process. The result is a single, complete export dossier that is immediately usable for tax authorities, accountants, and banks. Export thus becomes not only faster, but also defensible, scalable, and suitable for long-term structural use.

Preparing for a changing market

With €3 billion in EV purchase subsidies, the German government is inadvertently accelerating international dynamics in the used-car market. The question is not whether cross-border trade will become more important, but which dealers are operationally and strategically prepared.

Those seeking to leverage geo-pricing or geo-arbitrage to improve sales prices and stock turnover would be well advised to put their export structures in order in a timely manner.

Interested in learning how to organise export professionally and compliantly? Request an online demo or advisory session via info@novatrade24.com.