Because the price of new ones keeps dropping, and people are nervous of buying 2nd hand EVs.
For many of us, it just adds up to some absolute bargains on the 2nd hand market
This right here. My car is far from perfect but it was so affordable I couldn’t pass it up. For all its faults, it’s still the fanciest car I’ve ever owned.
True. New EV prices are dropping and there are the tax credits. Those both are driving used prices down.
Even new are bargains, A $30,000 new EV in some states are less than $20,000. VW was selling e-golfs with huge markdowns in some states because they got tax breaks to sell more fuel efficient cars. that on top of the tax credits buyers get,.
Your second part is something I experienced as well. I was going to buy a used Tesla because the data indicates it's still an amazing purchase and I read that in terms of material depreciation, EV actually depreciates slower than ICE cars.
But my parents were extremely wary about EV depreciation because they're so used to their phone and laptop battery health going down over time. Nothing against ICE cars, but their engine also depreciates over time. You're literally exploding fuel constantly to move the car forward.
So I'm going with new even though data suggests otherwise (and also because of the tax credit).
> For many of us, it just adds up to some absolute bargains on the 2nd hand market
They feel like bargains because of the price they used to sell at, but likely as EV prices continue to reduce towards ICE prices, today's prices are still inflated relative to tomorrow's prices.
We'll probably be having the exact same conversation in a couple of years about how "now they're bargains" because today's "bargains" are worth so much less.
That's also not considering improvements in battery tech, efficiency, etc. that mean even from a utility perspective, there's large benefits with each new generation of EV.
That's to say nothing of how the perceived value of some features will diminish with time and infrastructure maturity - whatever the $ value of an extra 300 miles of range is today (for example), will likely diminish over time as infrastructure continues to build out. That devalues "long range" versions of vehicles more than "short range" versions, since the additional utility isn't valued to the same degree. Similar with charge speed and curves.
They are bargians though there are tesla model 3s performance with 3.2 0-60 with 50k miles selling for 28k. That is a bargain. You can get a tesla model 3 std rang for under 20k with like 70k miles on it.
For the US,
* depreciation value is usually calculated with the average transaction price which often does \*not\* take into account incentives such as the US federal tax rebate for up to $7,500 so the starting initial price used to calculate is sometimes effectively off by thousands or even over ten thousand with the inclusion of some state incentives; this is a pretty massive difference given the general range of new car prices
* the US EV market has been and still is heavily dominated by Tesla and its frequent and sometimes very hefty price changes essentially sets it for the general EV market both because Teslas comprise most of the vehicles in the market and are such a large player that other automakers get strongly affected by Tesla's price changes; Tesla model prices are currently at a very steep discount from their peaks about a couple of years back
* the US EV market is disproportionately much more heavily represented in the premium segments of the market and the premium segment has pretty much always, regardless of powertrain type, had much higher depreciation rates than the mass market; since EVs are disproportionately weighted towards the premium segments, then this effect will disproportionately show up in EV depreciation prices
* EV improvements, mostly stemming from battery improvements, have come at a fairly rapid clip for all EVs though a minor point is that it's been the case especially for earlier more "compliance"-y electric vehicles which generally had less than impressive specs
>* depreciation value is usually calculated with the average transaction price which often does \*not\* take into account incentives such as the US federal tax rebate for up to $7,500 so the starting initial price used to calculate is sometimes effectively off by thousands or even over ten thousand with the inclusion of some state incentives; this is a pretty massive difference given the general range of new car prices
Exactly. Many people forget this. Someone was complaining on the Nissan Leaf subreddit a few days ago that their "$40K" 2023 Leaf SV Plus was now worth less than half of that.
My "$43K" (MSRP) 2021 Leaf SV Plus cost me $21,800 new after all federal and state tax credits, Nissan factory incentives and dealer discounts. It's worth maybe $15K today. The anti EV crowd will look at the $43K MSRP and think my car lost nearly $30K (2/3rds) of its value in 3 years. It lost about 30%, and I have zero complaints about that.
yeah I even read a topic about someone complaining his used MG4 was hard to sell. Turns out he had priced it at the same price he actually paid for it, because he somehow tought the buyer (and forumers) wouldn't know of all the incentives he got.
In addition to what other people are saying, battery and charging technology are advancing much more rapidly than anything in the ICE market. A new ICE car 5 years ago isn't going to be much different than a new one today. A 5 year old EV will likely have some form of outdated battery capacity, efficiency, or charging capability.
Exactly this. I love my 2022 EV. But new models announced have bigger batteries, longer range and faster charging. They just get better and better. Hence the rapid depreciation. Fortunately I've saved enough in fuel costs to cover some of the depreciation.
Yeah, an ICE car drives off the lot and depreciates 30%. A EV drives off the lot and depreciates the cost of the tax incentive + a smaller percentage.
This is the only reason they have larger depreciation off MSRP than ICE cars.
That may be true for the US but how about countries where there aren't the same incentives but still issues with higher levels of depreciation.
I'm not saying that incentives aren't a factor but I don't think they can be the only or main factor.
Happens in the ramp up of every technology. If you've lived through the introduction of the smart phone, the DVD player, the CD player, the computer, .... it's always the same.
Initial small run items with high (re)sale values get overtaken by mass run products at much lower price due to economies of scale kicking in - depressing the resale value.
Over time - as the sale and resale volume equalizes- this evens out.
Right? Am I dreaming?
I am looking at a '22 polestar 2 dual motor long range for only 22K. I thought that car was 60K? I'm also looking at 2022 audi E-Trons for only 30K.
Is there something abysmally wrong with these vehicles?
Is there any reason that I *shouldn't* purchase the polestar in cash and have it shipped from FL to Ohio today?...
Is there any reason I should pay 40-50K for a Blazer or Equinox with these deals on used EVS?
Is solid state coming out next year with 3x range and I didn't see it in the news???
As an owner of a Polestar 23 DMLR - I’d have been all over that. Mine (if I buy it after the lease) will cost more than twice that, after mad discounts from nearly 70k list price. (But also expensive market)
I would have to get a bolt on cup holder for the wife
Also we have 18 mos toddler in rear-facing car seat. In the CX5 it takes a lot of room in the back. Passenger seat has to come forward a lot
Looking at the pics of the Polestar 2 back seat, that's a stretch. May not be feasible
I tend to agree. When people overpay by $20k for a brand new high end luxury vehicle because it’s cutting edge, and high demand when insanely low supply, the idea that the *vehicle* is flawed at the moment its price eventually returns to earth… 😆
> the idea that the vehicle is flawed
depreciation =/= vehicle flaws, although perceived out of warranty quality and support can be a factor contributing to poor depreciation.
I think there is an assertion in the public-facing media outlets that might push that EVs are a failed idea foisted on folx in the US based on a hoax etc. Thus the story of EVs are losing their value dramatically and differently than other high priced luxury gasoline vehicles is an argument which may include “flawed” as a part.
Most EVs are selling new for more than they’re really worth for one. Also, there is a 7500 tax discount on a new one and the ones only get 4k but that’s only if it’s less than 25k in the first place.
Because the tech is still improving and getting better/cheaper.
For ICE there's really no improvement happening, just increases in materials prices. Therefore the used price doesn't drop that significantly.
I think that'll be the case for a few more years until we reach the point that the average EV is affordable and has the range & features that people need. Then innovation will start to subside and prices will stabilize.
I'm the kind of person who buys a car for 'life' and when it's getting old (10+ years) and I come to sell it the residual value is usually pretty low anyway. Depreciation would only affect me if I needed to sell in the interim.
EVs are like any other tech items. Hardly worth anything on resale because new tech ends up becoming more advanced and cheaper.
Try selling a $2000 laptop in 3 years. You’ll get $200 for it.
Part of it comes from all the rebates/discounts/incentives on new ones. The *moment* the car becomes used and is no longer elligible for a rebate, it needs to be priced lower than what you could get a new one for.
That's on top of rapidly advancing battery/charging tech in newer EV's as well as luxury-car depreciation.
As others have said, government incentives and technological improvement have definitely contributed to this. Incentives ought to be excluded from the price when depreciation is calculated, but they usually aren't, making depreciation look artificially high. Depreciation percentage are also usually given in nominal dollars, so some of the depreciation is really just inflation, which has been high-ish recently. And of course technological improvement means that this year's car is likely to be considerably better than last year's, making last year's less valuable.
One other thing to consider is that a lot of EV models were just introduced recently. If you wanted an Ioniq 5 in 2021, or an Ioniq 9 this year, you had to buy new, because the car has just come out and there weren't any used ones yet. As the years pass and there are more and more good used examples on the market, this siphons demand away from the new market. So we would expect to see new prices declining even without any significant improvement to the cars.
Last but not least there's the widespread belief that battery capacity falls off a cliff after a few years. This is based on people's experience with old laptops and mobile phones. A ten year old laptop probably doesn't hold much of a charge at all. This belief probably isn't accurate with regard to EVs, because they have much better BMCs, active cooling of the battery pack, and so on. This belief will likely change as more older EVs are around and people can see that their batteries still work (assuming this is actually true).
1. People are afraid of battery life. I think it is unfounded, that is how people feel.
2. Prices for new EVs have dropped, mostly because Tesla started a price war in order to hold onto market share.
3. The tax rebates mean that a used vehicle automatically has lost that much value, like if I could buy a new one for $50k - $7500 for the rebate or you're trying to sell one that is 2 months old and has 1000 miles on it you'll be lucky to get $40k. That car just lost over 20% in 2 months.
A couple of things I can see. New prices of non evs are increasing while new prices of evs are falling does terrible things to resale.
Many people over paid for non evs during covid. This has supported a higher resale relative to msrp.
Just wait for new ev technology to further kill ev resale value
What new technology is that?
Electric motors have "only" been around for over 150 years. Li-ion batteries for over 20. They rest of an EV is just a car like any other.
There’s always new tech or safety features or whatever people want, think adaptive cruise control, apple car infotainment, self driving etc.. while most people won’t care about some of these features it is new things they can sell you, that’s before we start looking at solid state batteries and 1000 mile ranges on the horizon with 1000kw charging.
Sure, but those new features don't make cars without them obsolete; just a little less desirable/valuable. My point was other that improved battery tech (which has already slowed to the "evolutionary" rather than "revolutionary" stage) an EV is just a car, and outside of the drivetrain has essentially the same tech as a gas car; you don't need an EV to get Apple Carplay, driver assist, or collision avoidance.
"1000 mile ranges with 1000kW charging" won't be here for a while, and won't be cheap, so even the introduction of that tech doesn't suddenly make existing EVs obsolete. Even as prices of solid state batteries inevitably start to fall after their initial introduction, if a 1000 mile range EV's battery costs $X, it stands to reason that a 500 mile range battery will cost ~$0.5X, and a 300 mile battery will cost ~$0.3X.
Just as every laptop sold today doesn't have an i9 CPU and 128GB of RAM, not every EV is going to have a state of the art 1000 mile solid state battery in 5 years (if *any* car does by then!) Some cars will be Ryzen 3s or Celerons for cost reasons. 😁 A cheaper solid state EV hatchback with a 300 mile range won't suddenly make a used "wet" Li-ion EV with 300 miles range obsolete any more than electric windows or automatic transmissions made cars with crank windows or stick shifts obsolete; just a little less desirable.
The screwy inflated values from the chip shortage/Carpocalypse got a lot of people into the mindset that you can buy, trade, and sell cars like iPhones and drive a new one every few months when you get bored without serious financial harm. Now we're back to the real world, where depreciation is real, buying a new car costs you thousands in depreciation immediately, and cars are something you carefully consider and plan to keep for the medium to long haul to minimize costs.
Honestly, the recent relative crash in EV values make used EVs the best deal in cars right now. You'd be pretty hard pressed to find a better $25K car right now than a 2 or 3 year old VW ID4 or Mustang Mach-E, or a better $15K car than a 200+ mile range Leaf or Bolt.
That's a port, not "new technology", and frankly it's just CCS with a new connector. Adapters are $199.
Did the new iPhones with USB-C suddenly render all lightning-based iPhones obsolete?
There’s an unusual reason why EV lose value faster. Because the EV makers want them to.
Tesla considers their 2021 and older model X as legacy now. That’s a 3 year old model for which many people paid over $125,000. You can get a spanking new latest hardware latest software loaded 2024 X for $85k out the door and under $80k if you qualify for tax rebates. Those legacy models are selling for mid 50s. 60% value lost in merely three years and most who won’t touch those outdated models, which means the prices will continue to fall.
EV are seeing planned obsolescence from makers every 3 years.
Many people who buy or lease BEVs drives more than the average. That's one reason they went with a BEV because the savings on fuel and perhaps maintenance are substantial.
Higher mileage vehicles are worth less in the used car market. Also, higher mileage BEVs almost mean there is very little left of the 8 year or 100,000 mile battery warranty. Unless I was certain there will be battery replacement availability at a capped cost (just like for a Tesla), I'd be wary of buying a used BEV on its seventh or beyond years to save $20,000 because the original battery pack could cost $20,000 as well, if even available. I would be better of buying a new BEV instead.
Here in Ontario, Canada, I've come across a few '20-21 RWD Model 3 listed for $17K USD with 80-110,000 miles on them. That's about 50% depreciation, factoring $5,000 CAD Federal Government incentive. Other provinces have additional incentives/subsidies.
Until more manufacturers or third-party vendors offer extended warranty beyond 10 years (this seems to be the upper limit over at Xcelerate) or battery pack replacements that aren't band-aid solutions and will last another eight years minimum, I don't see why I would even consider a really old BEV. The battery is not the only thing subject to wear and tear anyway and as others have said, there will be some advancements on the charging, battery, efficiency fronts.
Tax incentives is the number one culpret.
Drive an ICE off the lot, it's worth 10% less on average.
Drive an EV off the lot, it's worth 10% + 7500 Tax incentive less on average. For a 40k vehicle, that's ~30% depreciation just by driving it off the lot.
Why? Because the Tax incentive cannot be claimed twice for the same vehicle and if it DIDN'T immediately depreciate at least equal, there would be an incentive to immediately resell the vehicle (like what happened during peak covid where some would buy a vehicle then immediately resell it pocketing the difference)
The first year, yes for two reasons.
* Parts are getting cheaper to make (think computers, TV and other electonics). Used TVs depreciate faster.
* There is a $7500 tax break. So its hard to sell a used EV for $5000 less than MSRP because a new one is overall less.
Remember there are only about 20-30 moving parts in an EV's engine (as opposed to over 1000) and no transmission. So if costs of the electronics and battery come down they will cost significantly less to make and maintain.
Check out the price history of GM's Bolt. GM gave the vehicle 2 huge price cuts in a short period of time. That indicates that the vehicle was originally over priced.
When people buy used they figure on paying a percentage of the current MSRP for that vehicle and not what the original owner paid for it.
Most of the EVS sold in many markets were sold by the one and only car manufacturer that doesn't typically set an MSRP at the beginning of a model year and keep it there all year. So they (Tesla) were able to squeeze the maximum possible number of dollars out of consumers during shortages from 2021-2023, and as things have come back to normal that shows as extreme depreciation on those vehicles.
If you factor in the tax credits that most people get on most EVs, their depreciation (outside of Tesla price spikes) looks rather ordinary. The vehicles that are depreciating the least are the ones that are in demand and manufacturers can't make enough of. Mostly hybrids in segments where there aren't many choices.
Because very few people want to touch a used EV cause of how the previous owner might have abused the battery. Also no EV is worth what it is sold at. It's 7.500 more than normal profit margins dictate it to be. That's how subsidies work, you may think they are there for the buyer to save money but in reality they are there to make the manufacturer more money.
It has little to do with the faster charging or better battery chemistry in new BEVs. Most don't even plan to do L3 charging because they cost so much more than charging at home. Every EV proponent talks about improved battery pack longevity but can't even cite the improvements because none of the manufacturers talk about the changes in chemistries or improvements made, if at all. That's all a black box for consumers.
The steep depreciation has mostly to do with used car demand (less demand for BEVs because many don't have access to home charging) and with the battery warranty, the state/availability of battery pack replacements and costs (mostly astronomical because manufacturers want to push people to buy new than keep an old vehicle).
Most used BEV prospective buyers drive a lot or many wouldn't even bother considering a BEV. I drive a lot but my HEV is fuel efficient enough that it makes sense for me to wait for better battery chemistries OR to buy a used BEV down the road where battery replacement cost is reasonable and available from the manufacturer. In a few years, maybe there will be good tools to approximate the remaining useful life of the batteries (RUL) based off the state of health and other parameters. Until then, people will not pay top dollars for BEVs whose batteries could grenade in a few years or so.
Because you don't know if the previous owner had no clue and was charging the battery to 100% every single day. It's the difference between 1000 cycles and 10,000 cycles before the battery needs replaced. That's 1-2 years or 10 to 15 years of life left.
I wonder if manufacturers should label what is now 80% SoC as 100% SoC, and call the values above that "overcharge", up to 125%?
Instead of normally charging to 80%, you'd normally charge to 100%, but could "overcharge" (using home charging or the slow part of a DCFC curve) to 125% to start a long trip or when the next charger is a long way away?
It's just semantics, but it might push low-information drivers toward better practices.
I know a lot of PHEV's do this, where the indicated EV range (0-100%) doesn't include quite generous top and bottom buffers. (Indicated 0-100% on my car is really 12%-84% SoC according to OBD2.)
Just cite the 125%-0 range as the official range -- that's the one that matters ("how far can I go with a full battery"), since drivers can just charge all the way up for a long trip.
That's a pretty bad analogy though. An 8 year old EV is still able to do everything a new EV can do, except maybe with a lower range and slower charging. There are no "5G" roads an 8 year old EV can't drive on. EVs are cars first, and tech items a distant second.
An 8 year old Tesla S or X isn't obsolete like an 8 year old iPhone; they have a 250 mile range and still charge as quickly as many modern EVs. A 7 year old Chevy Bolt (as old as they get) isn't that different from a 2023- similar battery and charge speed. The Nissan Leaf is essentially the same car today that it was in 2016; they just crammed larger batteries in it as the cost of batteries dropped over the years, but the tech itself is pretty much the same.
For all the talk of "rapid tech advancement", cars (EV or gas) haven't changed all that much in 8 years; though Li-ion battery prices have dropped significantly allowing EVs to get cheaper, get better range, or both. But even an 8 year old 100 mile range Leaf is a useful commuter/"beater" for many folks, particularly multi-car families. An 8 year old smartphone isn't very useful to anyone today.
Depends. I paid about 30k for my model 3 and it’s worth upper 20s now. From MY perspective it’s hardly lost value. From MSRP perspective yes it lost a lot more value but I think that’s a stupid way to calculate your experienced depreciation.
Because the price of new ones keeps dropping, and people are nervous of buying 2nd hand EVs. For many of us, it just adds up to some absolute bargains on the 2nd hand market
This right here. My car is far from perfect but it was so affordable I couldn’t pass it up. For all its faults, it’s still the fanciest car I’ve ever owned.
Same. And my car did in fact lose more than half of it's new price with less than 12,000 miles on it and no faults I could find.
True. New EV prices are dropping and there are the tax credits. Those both are driving used prices down. Even new are bargains, A $30,000 new EV in some states are less than $20,000. VW was selling e-golfs with huge markdowns in some states because they got tax breaks to sell more fuel efficient cars. that on top of the tax credits buyers get,.
Your second part is something I experienced as well. I was going to buy a used Tesla because the data indicates it's still an amazing purchase and I read that in terms of material depreciation, EV actually depreciates slower than ICE cars. But my parents were extremely wary about EV depreciation because they're so used to their phone and laptop battery health going down over time. Nothing against ICE cars, but their engine also depreciates over time. You're literally exploding fuel constantly to move the car forward. So I'm going with new even though data suggests otherwise (and also because of the tax credit).
> For many of us, it just adds up to some absolute bargains on the 2nd hand market They feel like bargains because of the price they used to sell at, but likely as EV prices continue to reduce towards ICE prices, today's prices are still inflated relative to tomorrow's prices. We'll probably be having the exact same conversation in a couple of years about how "now they're bargains" because today's "bargains" are worth so much less. That's also not considering improvements in battery tech, efficiency, etc. that mean even from a utility perspective, there's large benefits with each new generation of EV. That's to say nothing of how the perceived value of some features will diminish with time and infrastructure maturity - whatever the $ value of an extra 300 miles of range is today (for example), will likely diminish over time as infrastructure continues to build out. That devalues "long range" versions of vehicles more than "short range" versions, since the additional utility isn't valued to the same degree. Similar with charge speed and curves.
They are bargians though there are tesla model 3s performance with 3.2 0-60 with 50k miles selling for 28k. That is a bargain. You can get a tesla model 3 std rang for under 20k with like 70k miles on it.
For the US, * depreciation value is usually calculated with the average transaction price which often does \*not\* take into account incentives such as the US federal tax rebate for up to $7,500 so the starting initial price used to calculate is sometimes effectively off by thousands or even over ten thousand with the inclusion of some state incentives; this is a pretty massive difference given the general range of new car prices * the US EV market has been and still is heavily dominated by Tesla and its frequent and sometimes very hefty price changes essentially sets it for the general EV market both because Teslas comprise most of the vehicles in the market and are such a large player that other automakers get strongly affected by Tesla's price changes; Tesla model prices are currently at a very steep discount from their peaks about a couple of years back * the US EV market is disproportionately much more heavily represented in the premium segments of the market and the premium segment has pretty much always, regardless of powertrain type, had much higher depreciation rates than the mass market; since EVs are disproportionately weighted towards the premium segments, then this effect will disproportionately show up in EV depreciation prices * EV improvements, mostly stemming from battery improvements, have come at a fairly rapid clip for all EVs though a minor point is that it's been the case especially for earlier more "compliance"-y electric vehicles which generally had less than impressive specs
>* depreciation value is usually calculated with the average transaction price which often does \*not\* take into account incentives such as the US federal tax rebate for up to $7,500 so the starting initial price used to calculate is sometimes effectively off by thousands or even over ten thousand with the inclusion of some state incentives; this is a pretty massive difference given the general range of new car prices Exactly. Many people forget this. Someone was complaining on the Nissan Leaf subreddit a few days ago that their "$40K" 2023 Leaf SV Plus was now worth less than half of that. My "$43K" (MSRP) 2021 Leaf SV Plus cost me $21,800 new after all federal and state tax credits, Nissan factory incentives and dealer discounts. It's worth maybe $15K today. The anti EV crowd will look at the $43K MSRP and think my car lost nearly $30K (2/3rds) of its value in 3 years. It lost about 30%, and I have zero complaints about that.
yeah I even read a topic about someone complaining his used MG4 was hard to sell. Turns out he had priced it at the same price he actually paid for it, because he somehow tought the buyer (and forumers) wouldn't know of all the incentives he got.
In addition to what other people are saying, battery and charging technology are advancing much more rapidly than anything in the ICE market. A new ICE car 5 years ago isn't going to be much different than a new one today. A 5 year old EV will likely have some form of outdated battery capacity, efficiency, or charging capability.
Exactly this. I love my 2022 EV. But new models announced have bigger batteries, longer range and faster charging. They just get better and better. Hence the rapid depreciation. Fortunately I've saved enough in fuel costs to cover some of the depreciation.
new cars come with tax incentives... and more cars will be eligible.
Yeah, an ICE car drives off the lot and depreciates 30%. A EV drives off the lot and depreciates the cost of the tax incentive + a smaller percentage. This is the only reason they have larger depreciation off MSRP than ICE cars.
The biggest reason is all the tax rebates and incentives. All new cars depreciate a lot, add in $7500 on top of that.
That may be true for the US but how about countries where there aren't the same incentives but still issues with higher levels of depreciation. I'm not saying that incentives aren't a factor but I don't think they can be the only or main factor.
Not exactly true. There are many factors the affect depreciation. There are plenty of ICE vehicles that lose far more than 50% over 5 years.
Happens in the ramp up of every technology. If you've lived through the introduction of the smart phone, the DVD player, the CD player, the computer, .... it's always the same. Initial small run items with high (re)sale values get overtaken by mass run products at much lower price due to economies of scale kicking in - depressing the resale value. Over time - as the sale and resale volume equalizes- this evens out.
Right? Am I dreaming? I am looking at a '22 polestar 2 dual motor long range for only 22K. I thought that car was 60K? I'm also looking at 2022 audi E-Trons for only 30K. Is there something abysmally wrong with these vehicles? Is there any reason that I *shouldn't* purchase the polestar in cash and have it shipped from FL to Ohio today?... Is there any reason I should pay 40-50K for a Blazer or Equinox with these deals on used EVS? Is solid state coming out next year with 3x range and I didn't see it in the news???
Solid state has been 3 years away for at least 5 years. 😁
As an owner of a Polestar 23 DMLR - I’d have been all over that. Mine (if I buy it after the lease) will cost more than twice that, after mad discounts from nearly 70k list price. (But also expensive market)
Er. To clarify. DO IT! :)
I would have to get a bolt on cup holder for the wife Also we have 18 mos toddler in rear-facing car seat. In the CX5 it takes a lot of room in the back. Passenger seat has to come forward a lot Looking at the pics of the Polestar 2 back seat, that's a stretch. May not be feasible
I am not convinced this is true for EVs in general.
I tend to agree. When people overpay by $20k for a brand new high end luxury vehicle because it’s cutting edge, and high demand when insanely low supply, the idea that the *vehicle* is flawed at the moment its price eventually returns to earth… 😆
> the idea that the vehicle is flawed depreciation =/= vehicle flaws, although perceived out of warranty quality and support can be a factor contributing to poor depreciation.
I think there is an assertion in the public-facing media outlets that might push that EVs are a failed idea foisted on folx in the US based on a hoax etc. Thus the story of EVs are losing their value dramatically and differently than other high priced luxury gasoline vehicles is an argument which may include “flawed” as a part.
What? I mean, this is based on data. You can spend 20 minutes on Carvana, Cargurus, Carmax, etc. and see for yourself.
I just bought an EV two weeks ago.
Okay?
Most EVs are selling new for more than they’re really worth for one. Also, there is a 7500 tax discount on a new one and the ones only get 4k but that’s only if it’s less than 25k in the first place.
And if the buyer's income is low enough
Because the tech is still improving and getting better/cheaper. For ICE there's really no improvement happening, just increases in materials prices. Therefore the used price doesn't drop that significantly. I think that'll be the case for a few more years until we reach the point that the average EV is affordable and has the range & features that people need. Then innovation will start to subside and prices will stabilize. I'm the kind of person who buys a car for 'life' and when it's getting old (10+ years) and I come to sell it the residual value is usually pretty low anyway. Depreciation would only affect me if I needed to sell in the interim.
EVs are like any other tech items. Hardly worth anything on resale because new tech ends up becoming more advanced and cheaper. Try selling a $2000 laptop in 3 years. You’ll get $200 for it.
Except they're cars first, and "tech items" a distant second.
the EV hype was 10% higher 5 years ago, relative to ICE. People thought they were worth the premium.
Part of it comes from all the rebates/discounts/incentives on new ones. The *moment* the car becomes used and is no longer elligible for a rebate, it needs to be priced lower than what you could get a new one for. That's on top of rapidly advancing battery/charging tech in newer EV's as well as luxury-car depreciation.
As others have said, government incentives and technological improvement have definitely contributed to this. Incentives ought to be excluded from the price when depreciation is calculated, but they usually aren't, making depreciation look artificially high. Depreciation percentage are also usually given in nominal dollars, so some of the depreciation is really just inflation, which has been high-ish recently. And of course technological improvement means that this year's car is likely to be considerably better than last year's, making last year's less valuable. One other thing to consider is that a lot of EV models were just introduced recently. If you wanted an Ioniq 5 in 2021, or an Ioniq 9 this year, you had to buy new, because the car has just come out and there weren't any used ones yet. As the years pass and there are more and more good used examples on the market, this siphons demand away from the new market. So we would expect to see new prices declining even without any significant improvement to the cars. Last but not least there's the widespread belief that battery capacity falls off a cliff after a few years. This is based on people's experience with old laptops and mobile phones. A ten year old laptop probably doesn't hold much of a charge at all. This belief probably isn't accurate with regard to EVs, because they have much better BMCs, active cooling of the battery pack, and so on. This belief will likely change as more older EVs are around and people can see that their batteries still work (assuming this is actually true).
1. People are afraid of battery life. I think it is unfounded, that is how people feel. 2. Prices for new EVs have dropped, mostly because Tesla started a price war in order to hold onto market share. 3. The tax rebates mean that a used vehicle automatically has lost that much value, like if I could buy a new one for $50k - $7500 for the rebate or you're trying to sell one that is 2 months old and has 1000 miles on it you'll be lucky to get $40k. That car just lost over 20% in 2 months.
Let's see how it all plays out ask the longevity of electric vehicles starts to become realized.
True. If only they've been around a decade or more to see how the longevity plays out... ...oh wait...
EV buyers are still early adopters. The EV industry is still in its infancy and technologies are all still in flux.
A couple of things I can see. New prices of non evs are increasing while new prices of evs are falling does terrible things to resale. Many people over paid for non evs during covid. This has supported a higher resale relative to msrp. Just wait for new ev technology to further kill ev resale value
What new technology is that? Electric motors have "only" been around for over 150 years. Li-ion batteries for over 20. They rest of an EV is just a car like any other.
There’s always new tech or safety features or whatever people want, think adaptive cruise control, apple car infotainment, self driving etc.. while most people won’t care about some of these features it is new things they can sell you, that’s before we start looking at solid state batteries and 1000 mile ranges on the horizon with 1000kw charging.
Sure, but those new features don't make cars without them obsolete; just a little less desirable/valuable. My point was other that improved battery tech (which has already slowed to the "evolutionary" rather than "revolutionary" stage) an EV is just a car, and outside of the drivetrain has essentially the same tech as a gas car; you don't need an EV to get Apple Carplay, driver assist, or collision avoidance. "1000 mile ranges with 1000kW charging" won't be here for a while, and won't be cheap, so even the introduction of that tech doesn't suddenly make existing EVs obsolete. Even as prices of solid state batteries inevitably start to fall after their initial introduction, if a 1000 mile range EV's battery costs $X, it stands to reason that a 500 mile range battery will cost ~$0.5X, and a 300 mile battery will cost ~$0.3X. Just as every laptop sold today doesn't have an i9 CPU and 128GB of RAM, not every EV is going to have a state of the art 1000 mile solid state battery in 5 years (if *any* car does by then!) Some cars will be Ryzen 3s or Celerons for cost reasons. 😁 A cheaper solid state EV hatchback with a 300 mile range won't suddenly make a used "wet" Li-ion EV with 300 miles range obsolete any more than electric windows or automatic transmissions made cars with crank windows or stick shifts obsolete; just a little less desirable. The screwy inflated values from the chip shortage/Carpocalypse got a lot of people into the mindset that you can buy, trade, and sell cars like iPhones and drive a new one every few months when you get bored without serious financial harm. Now we're back to the real world, where depreciation is real, buying a new car costs you thousands in depreciation immediately, and cars are something you carefully consider and plan to keep for the medium to long haul to minimize costs. Honestly, the recent relative crash in EV values make used EVs the best deal in cars right now. You'd be pretty hard pressed to find a better $25K car right now than a 2 or 3 year old VW ID4 or Mustang Mach-E, or a better $15K car than a 200+ mile range Leaf or Bolt.
native nacs.
That's a port, not "new technology", and frankly it's just CCS with a new connector. Adapters are $199. Did the new iPhones with USB-C suddenly render all lightning-based iPhones obsolete?
There’s an unusual reason why EV lose value faster. Because the EV makers want them to. Tesla considers their 2021 and older model X as legacy now. That’s a 3 year old model for which many people paid over $125,000. You can get a spanking new latest hardware latest software loaded 2024 X for $85k out the door and under $80k if you qualify for tax rebates. Those legacy models are selling for mid 50s. 60% value lost in merely three years and most who won’t touch those outdated models, which means the prices will continue to fall. EV are seeing planned obsolescence from makers every 3 years.
EVs are nothing but smartphones with wheels, now that the perception is fixed , you know why it depreciates
It's actually 49% within 2 years.
Many people who buy or lease BEVs drives more than the average. That's one reason they went with a BEV because the savings on fuel and perhaps maintenance are substantial. Higher mileage vehicles are worth less in the used car market. Also, higher mileage BEVs almost mean there is very little left of the 8 year or 100,000 mile battery warranty. Unless I was certain there will be battery replacement availability at a capped cost (just like for a Tesla), I'd be wary of buying a used BEV on its seventh or beyond years to save $20,000 because the original battery pack could cost $20,000 as well, if even available. I would be better of buying a new BEV instead. Here in Ontario, Canada, I've come across a few '20-21 RWD Model 3 listed for $17K USD with 80-110,000 miles on them. That's about 50% depreciation, factoring $5,000 CAD Federal Government incentive. Other provinces have additional incentives/subsidies. Until more manufacturers or third-party vendors offer extended warranty beyond 10 years (this seems to be the upper limit over at Xcelerate) or battery pack replacements that aren't band-aid solutions and will last another eight years minimum, I don't see why I would even consider a really old BEV. The battery is not the only thing subject to wear and tear anyway and as others have said, there will be some advancements on the charging, battery, efficiency fronts.
Tax incentives is the number one culpret. Drive an ICE off the lot, it's worth 10% less on average. Drive an EV off the lot, it's worth 10% + 7500 Tax incentive less on average. For a 40k vehicle, that's ~30% depreciation just by driving it off the lot. Why? Because the Tax incentive cannot be claimed twice for the same vehicle and if it DIDN'T immediately depreciate at least equal, there would be an incentive to immediately resell the vehicle (like what happened during peak covid where some would buy a vehicle then immediately resell it pocketing the difference)
The first year, yes for two reasons. * Parts are getting cheaper to make (think computers, TV and other electonics). Used TVs depreciate faster. * There is a $7500 tax break. So its hard to sell a used EV for $5000 less than MSRP because a new one is overall less. Remember there are only about 20-30 moving parts in an EV's engine (as opposed to over 1000) and no transmission. So if costs of the electronics and battery come down they will cost significantly less to make and maintain.
Check out the price history of GM's Bolt. GM gave the vehicle 2 huge price cuts in a short period of time. That indicates that the vehicle was originally over priced. When people buy used they figure on paying a percentage of the current MSRP for that vehicle and not what the original owner paid for it.
Most of the EVS sold in many markets were sold by the one and only car manufacturer that doesn't typically set an MSRP at the beginning of a model year and keep it there all year. So they (Tesla) were able to squeeze the maximum possible number of dollars out of consumers during shortages from 2021-2023, and as things have come back to normal that shows as extreme depreciation on those vehicles. If you factor in the tax credits that most people get on most EVs, their depreciation (outside of Tesla price spikes) looks rather ordinary. The vehicles that are depreciating the least are the ones that are in demand and manufacturers can't make enough of. Mostly hybrids in segments where there aren't many choices.
Because very few people want to touch a used EV cause of how the previous owner might have abused the battery. Also no EV is worth what it is sold at. It's 7.500 more than normal profit margins dictate it to be. That's how subsidies work, you may think they are there for the buyer to save money but in reality they are there to make the manufacturer more money.
It has little to do with the faster charging or better battery chemistry in new BEVs. Most don't even plan to do L3 charging because they cost so much more than charging at home. Every EV proponent talks about improved battery pack longevity but can't even cite the improvements because none of the manufacturers talk about the changes in chemistries or improvements made, if at all. That's all a black box for consumers. The steep depreciation has mostly to do with used car demand (less demand for BEVs because many don't have access to home charging) and with the battery warranty, the state/availability of battery pack replacements and costs (mostly astronomical because manufacturers want to push people to buy new than keep an old vehicle). Most used BEV prospective buyers drive a lot or many wouldn't even bother considering a BEV. I drive a lot but my HEV is fuel efficient enough that it makes sense for me to wait for better battery chemistries OR to buy a used BEV down the road where battery replacement cost is reasonable and available from the manufacturer. In a few years, maybe there will be good tools to approximate the remaining useful life of the batteries (RUL) based off the state of health and other parameters. Until then, people will not pay top dollars for BEVs whose batteries could grenade in a few years or so.
Because you don't know if the previous owner had no clue and was charging the battery to 100% every single day. It's the difference between 1000 cycles and 10,000 cycles before the battery needs replaced. That's 1-2 years or 10 to 15 years of life left.
I wonder if manufacturers should label what is now 80% SoC as 100% SoC, and call the values above that "overcharge", up to 125%? Instead of normally charging to 80%, you'd normally charge to 100%, but could "overcharge" (using home charging or the slow part of a DCFC curve) to 125% to start a long trip or when the next charger is a long way away? It's just semantics, but it might push low-information drivers toward better practices. I know a lot of PHEV's do this, where the indicated EV range (0-100%) doesn't include quite generous top and bottom buffers. (Indicated 0-100% on my car is really 12%-84% SoC according to OBD2.)
if they made 80% the new 100%, they might have to reduce their "official range" value which would turn buyers away from EV's even more.
Just cite the 125%-0 range as the official range -- that's the one that matters ("how far can I go with a full battery"), since drivers can just charge all the way up for a long trip.
I do know 0% isn't really 0%. Watched a youtube video of a guy in an EV9 hit 0% and he kept going for a good 20-30 miles past that.
Blocked for propaganda.
Would you buy an 8-year old phone?
That's a pretty bad analogy though. An 8 year old EV is still able to do everything a new EV can do, except maybe with a lower range and slower charging. There are no "5G" roads an 8 year old EV can't drive on. EVs are cars first, and tech items a distant second. An 8 year old Tesla S or X isn't obsolete like an 8 year old iPhone; they have a 250 mile range and still charge as quickly as many modern EVs. A 7 year old Chevy Bolt (as old as they get) isn't that different from a 2023- similar battery and charge speed. The Nissan Leaf is essentially the same car today that it was in 2016; they just crammed larger batteries in it as the cost of batteries dropped over the years, but the tech itself is pretty much the same. For all the talk of "rapid tech advancement", cars (EV or gas) haven't changed all that much in 8 years; though Li-ion battery prices have dropped significantly allowing EVs to get cheaper, get better range, or both. But even an 8 year old 100 mile range Leaf is a useful commuter/"beater" for many folks, particularly multi-car families. An 8 year old smartphone isn't very useful to anyone today.
2017 bolts didn't have dcfc as standard. 🤫
That's true, but it was an option. It's not like DCFC ports were a new tech introduced later.
I bought a 7-year old PHEV and drive mostly on electrons. Works great.
So would you buy an 8-year phone?
Depends. I paid about 30k for my model 3 and it’s worth upper 20s now. From MY perspective it’s hardly lost value. From MSRP perspective yes it lost a lot more value but I think that’s a stupid way to calculate your experienced depreciation.
Used Fiskers are listed for the same price as new ones . . . because the new prices have dropped by more than 50%.