Residual Roulette: Financing EV When Values Won’t Sit Still

Abstract: In this panel on EV residual value volatility, Daniel Ross (Industry Insights & Residual Value Strategy, Canadian Black Book) moderated a discussion with Scott Morrison (President, Nissan Canada Finance), Krishnan Mani (Head, Financial Services, Lucid Motors), and Wilton Wong (VP, Financial Services, VinFast) on whether electric vehicle residual values are beginning to stabilize—and what OEM finance leaders are doing to manage the uncertainty. The panel explored how incentives, affordability, technology change, and used EV supply are shaping residual outcomes; whether used EV leasing and CPO strategies can help build confidence in the secondary market; and what still needs to happen for EV ownership to become a “no-brainer” for more Canadians. Across legacy and newer EV entrants, the takeaway was clear: residual value risk is still real, but transparency, education, infrastructure, and disciplined portfolio strategy can help the market mature.

👉 Check out the full VIDEO here.

Daniel Ross: Assuming current market dynamics remain in place, do you believe residual values for EVs begin to reduce their volatility over the next 24 months? Wilton, let’s start with you.

Wilton Wong: I’d answer that in two parts. Academically, with the introduction of incentives, transaction prices come down, and that can create more volatility in residuals in the near term. But over the longer term, incentives should help grow EV adoption, increase supply, and bring more used EV buyers into the market. For VinFast, as a more mass-market brand, affordability incentives help us get more cars into the market. We entered in 2023, so our first lease returns will start showing up in 2026, 2027, and 2028. The more vehicles we sell, the more used EV supply the industry has—and over time that should help support a healthier residual environment.

Daniel Ross: Krishnan, what’s your view from Lucid?

Krishnan Mani: There’s still so much uncertainty in the EV market that it’s hard to answer this with confidence. For brands like Lucid and VinFast, we simply haven’t had enough lease returns or enough real secondary market data yet. Until we see more examples of how these vehicles perform in the used market over five, ten, or fifteen years, it’s difficult for guidebooks or finance providers to forecast values with certainty.

That said, there are things we can do proactively now. One is building transparency and trust with our guidebook partners and finance partners. At Lucid, we’re fortunate to work with strong partners who help us set values that are attractive to customers while also building in some protection around residual risk. We can’t eliminate the guessing game yet, but we can soften the downside through the right partnerships and disciplined planning.

Daniel Ross: Scott, Nissan has more years of EV leasing experience than most. How do you see it?

Scott Morrison: We’ve been leasing EVs since 2011, so we do have some history here. We’ve seen vehicles come back with equity, but EVs are still a relatively small slice of the market. Market share got as high as 13% and has dropped back below 10%, so adoption is still heavily tied to incentives.

Looking out, I think the guidebooks are conservative—and that’s not a bad thing. From an OEM perspective you always want residuals to be higher because it makes leasing easier, but over time the guidebooks are usually right. Until there’s more adoption, more infrastructure, and more consumer understanding, I don’t expect residuals to move dramatically. There’s still real range anxiety and real uncertainty. But as that confidence grows, I think values will improve. Driving an EV is actually a great experience—what’s missing is broader consumer comfort.

Daniel Ross: As the used EV landscape grows, what processes are being developed to build confidence and a stronger rationale for consumers to buy a used EV? Krishnan, let’s start with you.

Krishnan Mani: One big lever is controlling the secondary market as much as possible. If the majority of vehicles just go to auction, the market dictates the values. Those transaction prices then feed back into future guidebook values and future residuals. That’s why strategies like a strong CPO program matter—they allow an OEM to maintain more control over used pricing and customer experience.

The other piece is demystifying EV ownership. Too often we compare EVs only against what ICE vehicles can do, instead of talking about the unique benefits EVs bring. Charging at home, for example, means that for daily commuting you may never have to visit a gas station again. We also need to help consumers understand the longevity of EV powertrains. Early on, many people treated EVs like smartphones—something that would quickly become obsolete. But these powertrains can last decades, and I think that will eventually be reflected in a healthier used market.

Daniel Ross: Scott, what about used EV leasing? Can that become a success story?

Scott Morrison: It’s still in its infancy for us. We do offer used leasing, but the challenge right now is that new vehicle pricing has become more competitive, so the payment gap between a new EV lease and a used EV lease isn’t always compelling enough.

That said, I think used EV leasing absolutely has a place. We even considered a more controlled model with our EVs—bringing them all back, managing the second and third life of the vehicle, then eventually recycling the battery into another use case. The challenge is affordability and execution. Right now it’s still early, but if seven used EV leases becomes 17, and then 1,700, I think it can become a viable part of the market.

Krishnan Mani: I agree. Used EV leasing is interesting—it’s just about doing it right. The price has to be compelling relative to a new lease, and you need to balance that with expected residual loss over the term. Shorter-term used leases or CPO leases may become very compelling with EVs because they have fewer moving parts and lower maintenance needs. That’s a segment I do think will develop.

Daniel Ross: Wilton, let’s zoom out a bit. What do you think the net effect of Chinese EVs will be against Canada’s ZEV mandate and changing rebate structure?

Wilton Wong: More EVs in the market is generally a good thing if the goal is hitting the ZEV mandate and increasing adoption. Chinese EVs are expected to come in at lower price points, and that creates more competition. For mass-market brands like Nissan and VinFast, incentives become even more important because they help us remain competitive on affordability.

At VinFast, we’re focused less on the Chinese segment specifically and more on how to optimize our own affordability strategy. But in general, more competition raises the standard. More EVs on the road means more consumer attention, more used supply, and ultimately a stronger market.

Scott Morrison: As a Canadian, I’d say competition is good. The number of Chinese EVs coming in is still modest, and more adoption is positive for everyone. Whether the EV comes from China or somewhere else, broader adoption helps the market mature. We’ll find ways to compete.

Daniel Ross: Krishnan, what developments are still needed to make an EV purchase a true no-brainer for consumers?

Krishnan Mani: I’d break it into three things: education, infrastructure, and price.

First, we need to demystify EV ownership. Manufacturers and dealers should focus on the distinct benefits of EVs rather than constantly comparing them against ICE vehicles. Things like instant torque, advanced technology, home charging, and better packaging are all real advantages.

Second is infrastructure. It has to become as easy and standardized as fueling an ICE vehicle. Right now consumers still worry about charger compatibility and charger reliability. That needs to improve.

Third is price. EVs are often still more expensive upfront than their ICE equivalents. More competition—including lower-priced entrants—should help push prices down over time. Once consumers feel comfortable with ownership, infrastructure is broadly available, and price is less of a barrier, EV adoption becomes much easier.

Daniel Ross: Final question. Financing EVs has admittedly been a tough ride. Do you feel your organizations have done a good job mitigating residual value volatility amid tariffs, affordability issues, Chinese competition, and stop-start incentives? Scott, lead us off.

Scott Morrison: I’d give us a D. There are too many things you can’t predict, and we still need government support and infrastructure to move the market the way we want. We were growing quickly and then things slowed down. I do think we’ll get back on track, but there’s more to do and dealers need to get on board too. So it’s a D today—but I can see a B in the future.

Wilton Wong: I’ll avoid the letter grade and give VinFast a “most improved” ribbon. We’re a young brand from a market where leasing doesn’t really exist, so a lot of our work has been internal education—teaching executives and teams what residuals are, how leasing works, how to manage cash incentives, and how to think about end-of-lease returns. We’ve worked closely with partners like Canadian Black Book and ALG on that education. There’s still a lot to learn, but we’ve made good progress.

Krishnan Mani: I’ll avoid the letter grade too. Since Lucid hasn’t really had lease returns come back yet, the true report card is still ahead of us. But I do think we’ve done a good job learning from what we’ve seen in other markets and working transparently with our finance and guidebook partners to mitigate risk where we can. At this point, I’d describe us as cautiously optimistic.

Here are 10 key insights from the panel:

EV residual value volatility is not disappearing overnight
Panelists agreed that the next 24 months may still bring volatility, especially as incentives and pricing shifts continue to affect transaction values.

Used EV supply is essential to building residual confidence
More lease returns and more used EV inventory are necessary before the market can establish stronger, more reliable value signals.

Newer EV brands are still waiting for their “real” report cards
For newer entrants like Lucid and VinFast, the first major wave of lease returns is still ahead, which means residual forecasts remain partly theoretical.

Guidebooks are conservative for a reason
OEMs may prefer higher residuals, but conservative residual setting is often necessary in a market still defined by uncertain adoption and fast-moving technology.

CPO and secondary market control matter
Panelists highlighted certified pre-owned programs and more deliberate used market strategies as ways to support stronger used pricing and more stable future residuals.

Used EV leasing could become an important new segment
While still early, used EV leasing and CPO leasing may become more attractive as OEMs find the right pricing and term structures.

Consumer education is still a major barrier
Range anxiety, charging concerns, and misunderstandings about battery longevity continue to hold back broader confidence in EV ownership.

The EV value proposition needs to be framed on its own terms
Manufacturers need to highlight EV-specific benefits—like home charging, packaging, torque, and technology—instead of only comparing EVs to ICE vehicles.

Infrastructure and standardization remain critical
Wider charger availability, reliability, and compatibility are still essential to making EV ownership feel normal and low-friction for mainstream buyers.

Affordability still drives the whole conversation
Whether through incentives, lower-cost competitors, or improved leasing structures, reducing the upfront and monthly cost of EV ownership remains central to long-term adoption.

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