This is what fatally wounded Onto, which blamed its massive impairment on “the market downturn in the residual value of EVs”.

Eventually, lower prices triggered record demand for used EVs as drivers scrambled to snap up huge bargains. For the full year, used EV car sales rocketed 91pc higher to 118,973, according to the Society of Motor Manufacturers and Traders (SMMT).

However, with more than 800,000 EVs registered between 2020 and 2023, Auto Trader has warned that the rollercoaster for prices may not yet be over.

Some of this volatility is also down to other factors as well, such as the small (but growing) size of the used EV market. According to the SMMT, EV sales only represent 1.6pc of the used car total.

But Alex Buttle, co-founder of Motorway, says second-hand values are being dented by adjacent issues as well, such as sky-high insurance premiums and the Government’s decision to delay a ban on the sale of new petrol cars from 2030 to 2035.

“If the demand isn’t there, prices naturally come down,” he adds.

Richard Peberdy, UK head of automotive at KPMG, says the resulting hit to prices has presented upsides for consumers but is harder to swallow for manufacturers and dealers. He adds this presents “a significant challenge when it comes to reassuring consumers about the onward value of new EVs”.

This isn’t necessarily a disaster for companies that are investing, however. While some may be forced to put up prices to cover the cost of EV depreciation, others are managing the problem by holding on to cars for longer.

This is because cars tend to lose the most value in their first few years, with the rate becoming steadier afterwards.

For example, Octopus Energy’s EV leasing business, which is thought to run the UK’s biggest dedicated fleet, with 14,000 cars, recently started offering used EVs for lease alongside new ones.

This allows the company, which leases vehicles through workplace salary sacrifice schemes, to recoup more of a vehicle’s value before eventually selling it on, says boss Fiona Howarth.

“The second hand market was really very buoyant, unusually buoyant, about a year and a half ago,” says Howarth. “It was a bit of a bubble in that respect, and so there has been a correction over the last year.”