The Truth Behind The Terrible Resale Value Of Electric Cars

FutureBoy

Well-known member
First Name
Reginald
Joined
Oct 1, 2020
Threads
207
Messages
3,522
Reaction score
6,012
Location
Kirkland WA USA
Vehicles
Toyota Sienna
Occupation
Financial Advisor
Country flag
AAV6gV3.png
SlashGear

The Truth Behind The Terrible Resale Value Of Electric Cars
Nor'Adila Hepburn

1656463507843.png

© Jeerasak banditram/Shutterstock
ev vehicle

When you're tired of paying inflated prices at the gas pump for your car, buying an electric one can seem appealing. However, what you may not realize is that though they can save you a ton of money, maybe in the thousands, depending on what type of car you have, the buck stops there. For many EV owners, it's no secret that while electric cars save money on fuel and can be snagged at a decent price — they depreciate at a lightning-fast rate.

According to Car and Driver, EVs typically lose more than $5,700 per year, for the first five years on average, and will end up costing owners about $28,500 in five years. Compare this to a gas-powered car, which typically loses less than $3,200 per year or $16,000 over five years. The reality is that for most EV owners, depreciation is an expense that has to be factored into your purchase decision. Let's take a closer look to understand why these expensively-priced cars have a hard time holding their value.

Why Do They Depreciate?
AAYW6YK.jpg

© Andrii Yalanskyi/Shutterstock
depreciation effects

Depreciation is like taking money out of your wallet, and setting it on fire — every single day. You don't see it as a loss in the beginning, but after a while, you'll end up paying out the same amount you saved previously by not using gas. So, what causes EVs to depreciate?

Surprisingly, one of the main factors that leads to depreciation are incentives given to new EV owners to help them buy their vehicle in the first place. Since 2010, the U.S. government has offered tax credits up to $7,500 for anyone wishing to purchase an electric vehicle (via CNBC). While this is good, it causes the price of the vehicle to tank when it's resold.

The second factor is demand. Although interest in electric cars is rising swiftly, that has not topped sales of regular fuel-powered cars. Buyers still want gas-powered cars, although this is predicted to flip in the coming years (via Axios).

The third factor is battery capacity. EV batteries are notoriously for having a limited lifespan, which affects a car's value if it is not kept in pristine condition. Around the eight-year mark, most electric car batteries have degraded and need to be replaced with a new one, according to Forbes. Finally, changing technology has to be taken into account as well. Rapidly evolving EV technology makes the price go down and accelerates depreciation for older models, each time a new model is released.

The Anomaly Of Tesla
AAYVUBG.jpg

© canadianPhotographer56/Shutterstock
tesla on road

According to industry experts, EV cars that have higher ranges (200 miles and over) and improved battery technology seem to have the highest resale value (via MyEV). This could be a reason why Tesla models tend to have the highest resale prices, because they get the most miles per charge.

While most other EVs will depreciate after several years, the Tesla Model 3 is an exception. Statistics show that not only does the Tesla Model 3 have a resale value that is five times better than other EVs on the market — it also retains 90% of its total value after three years (via ElectricTrek). Furthermore, when compared to other cars (EVs and gas-powered cars), its resale value was four times better, according to InsideEVs. Another reason why Tesla has a slower rate of depreciation is that potential Tesla buyers can no longer get federal tax credits because the manufacturer has already sold 200,000 cars and are no longer eligible to be a part of this incentive (via Tesla).

How Can Buyers Reduce Depreciation On Their Car?
AAYVZtN.jpg

© Smile Fight/Shutterstock
EV charging

If you are an EV owner or considering buying one soon, there are a couple ways to prevent depreciation so you get the most value. One common way is to buy or lease a second-hand electric vehicle. Buying a used EV, preferably one that is one year old, is a way you can lessen depreciation on your vehicle. Previous owners have already eaten the bulk of the depreciation, so you wind up paying less for it. Leasing a pre-owned EV also reduces depreciation costs. The vehicle already has a lower value, which automatically leads to cheaper monthly payments (via Jerry).

Making sure that you are keep up with maintainence is another good way to ensure that your EV has a higher resale value. Buyers are more likely to pay extra for a used vehicle that is properly maintained and has the service records to show it.

Finally, if you want your EV to resell at top dollar, you should strive to keep the interior and exterior of your car spotless. If you don't mind spending extra money, it's worth it to spring for professional detailing services too, so your car is in pristine selling condition. Appearance matters when it comes to selling your car — buyers will pay up anywhere from 10 to 20% more for a car that looks well-kept than one in bad condition (via Autocosmetics).
Sponsored

 
OP
OP
FutureBoy

FutureBoy

Well-known member
First Name
Reginald
Joined
Oct 1, 2020
Threads
207
Messages
3,522
Reaction score
6,012
Location
Kirkland WA USA
Vehicles
Toyota Sienna
Occupation
Financial Advisor
Country flag
I was thinking this was completely bogus. But then they made the distinction between Tesla and other EVs. Then it makes a bit more sense. Still not very promising though.
 

Bill906

Well-known member
Joined
Mar 21, 2020
Threads
4
Messages
1,386
Reaction score
3,229
Location
Wisconsin
Vehicles
Jeep
Country flag
I was thinking this was completely bogus. But then they made the distinction between Tesla and other EVs. Then it makes a bit more sense. Still not very promising though.
Exact same conclusion I came too.

Slashgear is notoriously for making grammatical errors. They also aren’t always keep up with maintenance.

(that was hard to type.)
 

Crissa

Well-known member
First Name
Crissa
Joined
Jul 8, 2020
Threads
126
Messages
16,211
Reaction score
27,068
Location
Santa Cruz
Vehicles
2014 Zero S, 2013 Mazda 3
Country flag
Wow, that article doesn't really support it's numbers. Nor does it answer how it's calculating any of this.

How does the tax incentive create depreciation? If you were paid for that, then your purchase price was lowered. You can't get a discount on your capital purchase and then count that as depreciation!

Second, what are they counting as an EV? The resale market place is fairly narrow, but if your sample time was ten years ago, most EVs sold weren't sold to last and are out of warranty and many no longer have support from their manufacturers. But that's the fate of many budget-aimed cars, EV or ICE.

Ugh. My Zero went from $13k new to $6k once the warranty expired five years into its life - the point I bought it at - and barely dropped since. And Teslas are selling used at higher price than new right now.

-Crissa
 
Last edited:

Ogre

Well-known member
First Name
Dennis
Joined
Jul 3, 2021
Threads
164
Messages
10,719
Reaction score
26,998
Location
Ogregon
Vehicles
Model Y
Country flag
Making a blanket statement “EVs have terrible resale values” which doesn’t apply to 70% of EVs is just lame. Saying “most EVs” but then separating out Tesla is just factually incorrect. Teslas literally are most EVs (at least in the West).

These idiots don’t want to piss off their advertisers so rather than a more honest title “Tesla is the only EV maker with hood resale values” they make a bunch of idiotix Claims then have to back them out with disclaimers.

I’m not even sure this is correct if you eliminate Tesla, but as it’s written it’s a dumpster fire.
 


Sirfun

Well-known member
First Name
Joe
Joined
Dec 28, 2019
Threads
55
Messages
2,389
Reaction score
4,872
Location
Oxnard, California
Vehicles
Toyota Avalon, Chrysler Pacifica PHEV, Ford E-250
Occupation
Retired Sheet Metal Worker
Country flag
I clicked on the link to Car and Driver. It took me to their article which was published in 2017. Back then this was fairly accurate. One thing they failed to mention is that older EV's had very little range and were older tech. Imagine the value of a 5-year-old phone that the battery lasts about 1/4 as long as a new one.

Old FUD from 2017. ;)

BTW, what was the price of gas in 2017? Most of the used EV's that Car and Driver was talking about with the massive depreciation, had a range of about 70 miles.
 
Last edited:

HaulingAss

Well-known member
First Name
Mike
Joined
Oct 3, 2020
Threads
9
Messages
4,481
Reaction score
9,451
Location
Washington State
Vehicles
2010 F-150, 2018 Model 3 Perform, FS Cybertruck
Country flag
Making a blanket statement “EVs have terrible resale values” which doesn’t apply to 70% of EVs is just lame. Saying “most EVs” but then separating out Tesla is just factually incorrect. Teslas literally are most EVs (at least in the West).

These idiots don’t want to piss off their advertisers so rather than a more honest title “Tesla is the only EV maker with hood resale values” they make a bunch of idiotix Claims then have to back them out with disclaimers.

I’m not even sure this is correct if you eliminate Tesla, but as it’s written it’s a dumpster fire.
They know more people read the headlines than the article. It's just another way to slow down the disruption EV's are causing.

I also agree with you on part about "most EV's". It's just like the clowns that act like EV experts who tell new Tesla owners they should install a J1772 charging station in their garage because it's compatible with "more EV's". No, it's not, not when 3/4 of all EV's in America are made by Tesla!

Then, the same clowns will tell you that Tesla cars can use a J1772 adapter to charge on a third party charge station, which is true, but it seems better to put in the native charge solution for the majority of EV's (Tesla) and have the minority use an adapter (every other brand of EV). Yes, if you own an EV that i not a Tesla, you probably want a TeslaTap adapter! The advice that a new Tesla owner install a J1772 is dumb.
 

Zabhawkin

Well-known member
Joined
Sep 1, 2021
Threads
11
Messages
323
Reaction score
529
Location
New Mexico
Vehicles
1999 Nissan Frontier, 2015 F-150, 1984 Jeep CJ7
Country flag
We bought an ice 7 years ago that lost 50% of its value in 2 years... so using that sample size Ice cars are far worse. Oh wait that would be cherry picking my bad.

The article looks like it was written pre-covid but has says it was posted Monday, or maybe used ICE cars post covid and EV pre-covid?
 


WildhavenMI

Well-known member
First Name
Nick
Joined
Mar 16, 2020
Threads
13
Messages
217
Reaction score
580
Location
Rural Michigan
Vehicles
Cybertruck (reserved), 2021 Bolt EV, 2018 Model X
Occupation
Digital @ Aurora Solar
Country flag
Case study of 1, but my 13k mile 2021 Bolt EV has a higher resale right now than what I paid for it in May 2021. Part of that is because it'll get a new battery pack soon due to the recall, the other because of market conditions.

A sign of the idiocy of the market right now - both my EVs have appreciated in value since purchase, not depreciated.
 

Sirfun

Well-known member
First Name
Joe
Joined
Dec 28, 2019
Threads
55
Messages
2,389
Reaction score
4,872
Location
Oxnard, California
Vehicles
Toyota Avalon, Chrysler Pacifica PHEV, Ford E-250
Occupation
Retired Sheet Metal Worker
Country flag
We bought an ice 7 years ago that lost 50% of its value in 2 years... so using that sample size Ice cars are far worse. Oh wait that would be cherry picking my bad.

The article looks like it was written pre-covid but has says it was posted Monday, or maybe used ICE cars post covid and EV pre-covid?
OLD DATA, they used was from a Car & Driver article in 2017. They linked to this article as their source.

https://www.caranddriver.com/news/a...nsive-to-own-thanks-to-abysmal-resale-values/
 

Sirfun

Well-known member
First Name
Joe
Joined
Dec 28, 2019
Threads
55
Messages
2,389
Reaction score
4,872
Location
Oxnard, California
Vehicles
Toyota Avalon, Chrysler Pacifica PHEV, Ford E-250
Occupation
Retired Sheet Metal Worker
Country flag
Case study of 1, but my 13k mile 2021 Bolt EV has a higher resale right now than what I paid for it in May 2021. Part of that is because it'll get a new battery pack soon due to the recall, the other because of market conditions.

A sign of the idiocy of the market right now - both my EVs have appreciated in value since purchase, not depreciated.
Now would be a great time to sell a used vehicle. But buying any vehicle now is outrageously expensive.
I glance through Cargurus website occasionally. Used EV's that you could have bought 1 1/2 years ago for under $10,000 are now closer to $20,000. And they're 1 1/2 yrs. older now!!! 😱
 

WildhavenMI

Well-known member
First Name
Nick
Joined
Mar 16, 2020
Threads
13
Messages
217
Reaction score
580
Location
Rural Michigan
Vehicles
Cybertruck (reserved), 2021 Bolt EV, 2018 Model X
Occupation
Digital @ Aurora Solar
Country flag
Now would be a great time to sell a used vehicle. But buying any vehicle now is outrageously expensive.
I glance through Cargurus website occasionally. Used EV's that you could have bought 1 1/2 years ago for under $10,000 are now closer to $20,000. And they're 1 1/2 yrs. older now!!! 😱
Even used-to-used. I picked up a '18 Model X in march of this year for $68k which now bluebooks at $75k
 
 




Top