EVs are depreciating faster than gas-powered cars

Causality could be reversed here. In markets where technology advances quickly and prices drop, there is very little market for used goods, because why would you buy a 4-year-old whatever when you can get a new one that's twice as good for half the price? You see this in computers, smartphones, TVs, and solar panels (outside of the U.S, where prices are kept artificially high by tariffs). People almost never buy used because there's no reason to. You can just buy new, for the same or lower price, and get something way better.

Instead of threatening to derail the EV transition, lack of resale value might be evidence of the EV transition, particularly when coupled with quickly growing overall sales of EVs globally.

Sub-Headline from this article: "Plummeting resale values are threatening to derail the world’s transition to electric transportation."

Alternative take: "EVs now easy to afford for the 80% of Americans who don't have $50-90k to spend on an EV!"

This year I bought a 2022 EV with 16k miles. A luxury brand. The sticker price when new was $79,000. I paid $35k. It was an off-lease vehicle so if anyone took a bath, it was the bank. I would never in a million years spend 80 grand on a car but now I have a great EV.

Battery life is not a huge concern. Any more than timing belts/chains, transmissions, etc. can be dauntingly costly repairs for cars with 150k miles or more.

I also have a gas car which I love (spouse drives the electric for a much greater commute) so I'm no EV absolutist. But this whole premise is stupid. EV adoption has had 2 main blockers: 1. only rich people had justification to buy them until recently, and 2. Charging space for people who don't have their own private garage.

Now #1 is no longer a factor. This is a GOOD thing.

> For Tesla owners in the U.S., their 2023 Model Ys are worth 42% less than what they paid two years ago

I want to suggest that there are recent reasons why Tesla, as a brand, has specifically gotten a bit less popular that are unrelated to the entire EV category. (It's Elon. He's the reason.)

That said, to the extent the result holds true for the entire category, I'd suspect it's because EVs are still fairly immature. It's like "resale value of desktop PCs falling rapidly" back in the 90s, when the field was advancing quickly enough that buying used was genuinely a bad idea.

The article is making a huge mistake though, comparing apples to oranges.

Resale value of EVs doesn't depend on mileage nowhere near as much as ICE cars. EVs are just much simpler machines and electric motors can do a million miles with no maintenance, and the only maintenance you have is the oil in the differential, which is often simpler because it is single-speed. Compare that to thousand different mechanical parts that all wear out in a ICE engine. Which is why ICE cars resale value is determined by the odometer.

What drives EV resale value is the health of the battery, which is influenced more by recharge cycles and straight up passage of time.

And the anecdotal evidence of a commercial fleet going bankrupt and not getting much for their EVs... Well yeah, would you buy from such a source? I wouldn't. They usually don't follow longevity advice for battery charging, because they have to optimize for time-in-use.

As an anecdote, I bought all my ICE cars second hand, and would usually sell them 3-4 years later just before major maintenance was needed. My EV is now 8 years old, runs like the day I got it and had 1 repair, when the motor that drives the window up and down broke and battery capacity is still the same, or if it changed it's such a small change I didn't notice. I don't expect to sell any time soon, if ever. I expect I will just do a battery swap in 5-10 years.

Let's do a thought experiment.

Say the govt wanted everyone to buy more Rubik's Cubes (cause they help you become smarter).

Their plan to do this is not to pay the Rubik's company to make them cheaper, but instead to give everyone $5 spendable on Rubik's Cubes only. The cost of a cube prior to this was $8.

The day that decide that, the Rubik's company ups the price of a Cube to account for this incoming onslaught of buyers and get more profit. They can safely up the price without losing sales because A) everyone wants to get smart and B) The overall cost of a cube is still cheaper than before. You can get a $10 cube for $5, which is less than $8.

More cubes are sold than ever before.

Now the market is flooded with cubes.

Now the govt says "Great! Everyone has cubes. Let the intelligence revolution commence!" So they remove the subsidy.

$10 Cubes are now QUITE expensive, so the Rubik's company reduces the price back to the $8 it was before. But wait a second, now the market is flooded and people are used to paying effectively $5 for a cube.

This is what's happened with EVs.

The battery uncertainty is real, but I think the bigger issue is information asymmetry.

Looking at actual market data, the spread on used EVs is wild - a 2022 Tesla Model S ranges from $57 to $112k depending on trim/condition (https://cardog.app/tools/valuation/tesla/model_s/2022). That's a $60k spread on the same year vehicle. Compare that to ICE vehicles where the range is typically much tighter.

When buyers can't confidently price an asset, they discount heavily. The depreciation problem might actually be a data problem - we just don't have the standardized battery health reporting and historical comps that exist for ICE vehicles yet.

One nitpick on the article is comparing a passenger sedan or passenger SUV to a light truck like the F150 when you're discussing depreciation is a bad comparison. Light trucks hold their value better generally for a variety of reasons including because the parts that get used are heavier and are more designed to be maintained with lubrication schedules and such. SUVs are not light trucks and have more in common with a minivan or a sedan. A better comparison would be to compare the depreciation of say a Tesla SUV to like a Ford Escape.

How much is due to the tax credits, at least in the US? Last time I looked, a big chunk of the expected first year depreciation on my F150 Lightning could be explained by the credit. The expected depreciation in the years following tracked very similarly to ICE F150s.

The EV market is just weird, anyway. Manufacturers have to price to what the market will bear, which may have little resemblance to MSRP. So a good evaluation of deprecation has to figure out how to account for that. My Lightning had an MSRP of 72K but I got it for 51K, which was a very normal price that anyone could get. If I evaluate resale based on the MSRP, it looks pretty bad. If I use my out-the-door cost for comparison, it does not look bad at all (compared to any other new car purchase, of course, which are never going to be the most cost-effective choice for an individual).

Not a surprise when the tech is improving so quickly still.

Why would I pay a significant fraction of the original price for a 2020 EV if a same tier 2025 EV has better batteries and drivetrain that'll probably have a longer lifetime, almost double the range, heat pump and faster charging? That doesn't mean the 2020 is bad, but it's only worth it if you can get it at an enormous discount over the current model.

Meanwhile, a 2020 ICE is pretty much the same as a 2025 ICE aside from the wear and tear.

Once the tech stabilises, so will the resale market.

This story doesn’t really gel with my understanding as an EV owner in Europe.

The post says that Tesla hold their value better than Chinese newcomers but that absolutely isn’t the prices I’m seeing in Europe.

In Europe Tesla resale value has plummeted due to brand destruction. Tesla was super popular when they launched as the first realistic EV to hit the main time. But they quickly got a poor reputation for build quality and never delivering on self-driving, and that was before the political damage the owner did which seems never recoverable in at least a generation.

Meanwhile comparable Chinese entrants are so new they aren’t yet at the 3 year mark where fleets sell off to second hand market.

Another interesting thing about non-Tesla EVs is that there aren’t a lot being resold; if you got one, you likely hang onto it. Personally I’ve just not yet let go of my Kia EV6 even though it sailed past the normal trade in point recently.

EVs are simply immature products. The first truly mainstream models (car manufacturers making EVs their flagship model) outside of Tesla were released this year, or maybe last.

The first few generations of smartphones didn't last very long either (1-2 years). But now they last much longer (5-7 years). EV lifespans will expand in the same way as they mature as a product.

A $25,000 used EV with 80,000 miles is not a good deal if you're going to have to spend $20,000 to replace the battery.

If you can get another 150,000 miles out of it with almost no maintenance or repair costs, it's a screaming good deal.

The latter is far more likely than the former, but people don't realize it yet.

https://www.p3-group.com/en/p3-updates/battery-aging-in-prac...

P. S. I will likely be buying a used EV soon.

How much of this is due to a high level of pre-purchase excitement followed by buyer's remorse? Anecdotally, I know several people who were gung ho about getting an EV, fully willing to pay its cost premium, who initially loved their EVs but sold them within a year or two after encountering issues that only become apparent with semi-long-term ownership:

— In the US, charging infrastructure is still quite poor, with a high amount of disabled or damaged chargers that aren't apparent on maps. Nothing worse than planning a route around the only charger within a few dozen miles and arriving to find it broken. The overall overhead of having to plan driving/parking around chargers is also too onerous for some people.

— Similarly, people underestimate how much harder long road trips are on EVs, especially when fast chargers are damaged and don't actually supply anywhere close to the advertised amount of current.

— People underestimate how much range degrades in cold weather. One person I know bought their EV in the spring, loved it until winter came around, and then promptly sold it the next spring. In a similar vein, people don't realize how poor and battery-hungry climate control can be in an EV, especially in models without a heat pump.

It would be interesting to rigorously study this, examining whether people buying EVs are more likely to sell them within the first couple years of ownership versus people buying comparably priced ICE cars.

So much of this, but not all, could be mitigated with a guaranteed battery "refurbishing" program. Large part of an EV's value is tied up in the battery, which is a (longer term) consumable. So when an EV hits the second hand market, and there is no battery guarantee (or clear and trusted state and history reporting), the estimates on battery value will have to be on the low side, and the overall car value depreciated accordingly.

Traditional gas cars also have wear and tear with parts on the "consumables" spectrum, but these are considered more open to state inspection by a semi knowledgeable amateur, and the car's value is less tied to one specific black-box item.

It's the charging.

You have to remember that the market for new cars skews heavily toward wealthier households. These households are generally the ones that can afford a place to charge a car at home.

The market for a used EV is much smaller than for a used gas powered vehicle. People buying used vehicles are much more likely to have housing situations where they can't charge a vehicle.

This factor doesn't apply to gasoline vehicles because everyone, rich or poor, fills up at a gas station.

Well, sure. EV'S are smart phones on wheels. Are you going to grab your Samsung 5s in 2030, power it back up and use it to store your most sensitive personal data? Even the lowest-end varieties are always-on, internet-conected devices. Their safety and function is on the same tier as today's phone models. Expensive today, junk in 5 years.

Thanks, but I'm hanging in to my old Subaru.

Aren't they deprecating mainly because new EVs are better? In this case, it is not "derailing" but simply the actual replacement happening. And this effect will become smaller as the industry matures and EV prices stabilise.

At least that's what happened in 2022-2023 when prices of EVs and ICE cars quickly converged. No surprise existing EVs on the road deprecated rapidly.

Hi, I'm the author of this piece.

It is very heartening to see everyone engaging on topics like IP, production capabilities, trade dynamics, charging anxiety, safety and more. I love that the discussion isn't one-dimensional, and that rapid tech advancements in EVs are being seen as a sign of progress and volatility both. In the same vein, ICE vehicles being stagnant is not simply being written off as them being outdated but instead being considered good enough. One commentator is on the ball in suggesting that the depreciation problem might actually be a data problem. I've often found in my reporting that assessing EVs in general pose data challenges given how new the tech and market is.

As many of you pointed out, there are several factors that influence the price of used EVs and given how nascent the market is, it may be too soon to tell if the initial prices were inflated, or if the used pricing will settle in the near future, and so on. Battery anxiety, though, seems to be a big point of contention. EV users in the comments seem to be quite happy and confident about their battery, but several people still point to battery life uncertainty and the information asymmetry around it as deterrents.

Experts suggest that battery-as-a-service models are a potential lifeline, but someone here said standardisation for individual buyers is far off because "battery tech, from the chemistry to the packs, shows no sign of slowing down in the immediate future." Another person said they're looking forward to solid-state batteries.

I'd love to know more from you about how battery tech is evolving/should evolve where you are and whether battery swapping or leasing or any other financial models would make EV adoption (used or new) more enticing? If you have any specific examples, please do share

Well, that just means that secondhand evs might cater to people who could not or don’t want to shell out a lot of money for new EVs.

As the battery tech and service infrastructure matures we probably will see less of this though.

A few thoughts...

They compare the Model Y to an F150, but don't indicate if the 0-day prices are MSRP or actual sales (because F150s are usually discounted from list price and EVs have various subsidies). While each is best-selling by some measure, they're also different products - a truck VS a near-luxury wagon/crossover. I wouldn't expect them to depreciate at the same rate - they should have included a near-luxury gas-powered wagon/crossover as well (Lexus NX, maybe).

Their argument relies heavily on data from India, where a bankrupt ride-share service flooded the market. If Enterprise went out of business and flooded the US market with Toyota Camrys, I'd expect some pricing irregularity for that model.

Similarly, the US EV market (and probably some others?) is heavily impacted by federal and local rebates and tax benefits. Those surely skew the used car values as well - nobody actually paid $50,000 for a new Tesla (or whatever), they paid $50,000 - some subsidy (and that amount varied based on model, price, and the income of the initial buyer - my neighbor could by the exact same car as me for $7500 less than I could). Some of these subsidies also incentivized leasing vs buying, which then means more of those cars go on the market in 2-3 years (vs a typical ~8 year ownership for a new car).

Long story short, EVs are a nascent market, there's bound to be pricing issues. I'm not convinced we can extrapolate long-term used market values based on the last ~5 years of data.

Human scale electric vehicles (e-bikes, e-scooters, etc) do not seem to suffer from this problem as much.

I have a 2018 Model 3 dual motor long range that I bought new right before the first tax credit expired. I never considered another manufacturer because they didn’t have NACS for supercharger access. Only just this year has that started to change. I never considered another Tesla because 1. I didn’t want to repay for FSD and 2. I would lose on the depreciation while there has not been a killer feature that separates my current car from the new ones. Now I wouldn’t even consider a Tesla.

Since owning my car I’ve had to service it only twice. My battery depreciation has been at least to me completely unnoticeable. I basically only charged on superchargers till late 2023 till I got a charger in my garage. I’m sure my battery has lost some small amount of range but honestly I would have to do the calculations to know what it is. It can’t be much.

I will say only this year have I even considered for even just a moment of getting something new. I’m pretty interested in the Lexus steer by wire technology that will come as an upgraded feature on the new RZ. I know that car is not on anyone’s radar and I can understand someone being very hesitant of steer by wire technology. I genuinely believe it’s an interesting feature though and could be a noticeable enhancement to every day driving. It actually makes a yoke style wheel make sense.

Different take: depreciated EVs mean they are more affordable on the used market, making them accessible to more people that can't make a $50-80K+ new vehicle work for their budgets. First adopters and EV enthusiast will continue to push the new market, but the tent opens up for more drivers. The next hurdle will be solving disparity of convenience between those that can have home chargers and those that live in apartments or with street parking.

At least in the 4-5 years ago, there was not much of a used market, not much vehicle choice beyond Tesla that was good price/performance, and tough going on charging infrastructure (again outside of Tesla)

That landscape has not completely changed, but it is much different. There's a lot of actual vehicle choice (even if most are still some type of SUV/CUV), and charging situation is reasonable, especially with opening up of NACS

There's a big component of political action against EVs, solar, etc but I think it will just slow, not stop the momentum in the US. With 2 BEVs and a PHEV, I don't see our family going back to ICE vehicles. I miss manual transmissions, that's about it

Happy owner of a 2017 Tesla Model 3. I couldn’t care less about resale value. I’m driving it, that’s my value, and will do so until it can’t. I’m just glad my garage doesn’t smell like gasoline, I never have to do an oil change, and I never have to go to the gas station. Eight years of no gas stations, it fills up overnight every week in my garage. Stop reselling your car and you won’t have to worry about resale value.

I am going to declare my wife to be the authority on this topic.

We were well on a path to purchase a couple of EV's (Teslas, new) and even installed a large solar array to support them.

A couple of years later she learned about the cost of replacing the battery. And, just like that, the dream was over. No interest whatsoever.

Anyone who is married fully understands you cannot argue with wife logic. She has no interest in having to spend $20K to $30K ever on any vehicle, of any type, electric or not, a few years after you paid off the loan.

She would not even touch a used EV if it was almost free. In that case you are almost guaranteed to have to spend tens of thousands of dollars for a new battery at a random moment in time in the future. No deal.

Her logic is cemented in a reality of life that we have lived: There are good times and bad times. And, as things go sometimes, you often find yourself in bad times with no money. Vehicles being necessary for mobility and work, if you have an EV, hit bad times and need to spend tens of thousands of dollars to swap the battery, you are absolutely screwed.

So, I asked her: What would make you change your mind?

The answer: A battery swap should be $5,000 or less.

I been thinking about this too as I am looking to buy my first EV.

With a ICE you look at the odometer when purchasing, outside of that you don't actually know whether that reading and the state of the engine gives you less range, less power or an indicator of parts failing.

With an EV, similar to other electronic devices, you get an actual number that tells you the life of the battery which allows you to infer anything you like in terms of what that would mean for the life of the vehicle.

It will take time for people to know the true life of an EV in the second hand market. The general public are skeptical of EV's, so it makes sense they would be all the more skeptical of them second hand.

This is mostly a function of the markets for used EVs and used ICE vehicles being the same and the used EV purchaser is not a target market for EVs in general.

Not that many people can afford a new car now at all, and of those who can, they're getting luxury end cars, generally. Luxury vehicles depreciate faster than non-luxury vehicles, generally. People who want used cars are frequently people who can't afford new cars, thus they want something that works in their area in their situation with their stuff as it stands. Many of these people live in places with poor charging networks or rent and cannot install a charger. Used EVs don't come with a free charger like new ones often do. EVs were also being priced and purchased based on the tax credit for quite a while, which meant that price was a little... soft? On top of that, many EVs that fit into this data are selling for less for real reasons, like the uninsurability of Cybertrucks and the range loss on the Bolt EV. This all drives demand down or shifts the curves and lowers prices. It's just a small market for now.

Bad market analysis and production. I believe a case can be made for a well designed, rectangular vehicle with motorised wheels - 2 or 4 wheel drive. With a cube van or window van. Forget the chatter about un-sprung weight, this is not a high performance vehicle. Brakes, suspension as well as a front compression zone. Battery = 3 choices - 150/300/450 mile range. Battery flat in 3 segments arranged to balance as needed. Many people are OK with 150, some want 300 and 450 for the longer range. Some car makers in Asia have fast change stands where an old battery can be dropped and a new one picked up in under 5 minutes - perhaps fast charging will eliminate this - however fast charging has IR losses as well as degradation issues - need to be solved before ready for prime time. Tesla has plateaued due to price and the yearly design steady state ranks old/new cars as same old same. Far less in the way of e-bling = smaller screens etc, fewer assists/features. I would be quite happy at 0-60 under 10 seconds and a max of 85-90.

My previous car was a Mitsubishi Spyder Eclipse convertible. I loved the bones of that car but moving continent was too far a bridge to cross. It was 17 years old when I gave it to a neighbour as a thank-you for helping me pack the house up.

My current car is a Kia EV6 AWD GT-Line S, pretty much the top-of-the-range car. It has 340 miles range (plenty when the longest trip I'll do is 220 once or twice per year) and although a lot bulkier than the old car, has enough oomph off the line that I don't care. I do miss the top-down experience, but here in the UK that's less of an issue due to weather, and at least there's a large sun-roof :)

Tesla would have been an option a few years ago. Glad I dodged that bullet.

I fully expect to get another 15 years or so out of the car, at which point I'll be in my dotage and be having other people drive me around, possibly in a golf-cart.. So depreciation really isn't a big deal for me.

This is why I leased my EV rather than bought it. EVs are more expensive than gas cars (at least here in USA) and the last few years have brought an incredible amount of technological change. When I bought my last (ICE) car, I considered the purchase on a 10 year time scale. With how quickly EVs are improving right now, I would hate to lock in to 10 years.

That's before you even consider battery degradation. So much of the value of these cars is in the battery, to the point I almost wonder if they are making money, even selling them at these prices. I had to have my IONIQ 5 battery replaced under warranty within a month of buying the car, and the price that Hyundai charged themselves for the battery was more than the cost of the car brand new off the lot, even before incentives. Yes, that's the right hand charging the left, and they'll refurbish my failed pack (a single weak cell) and recoup most of the cost... but it was still a shock to see that.

The nuance here is there is a much higher floor for EVs when they finally bottom-out in value. A 300,000km EV will be degraded to ~80% it's range, while a 300,000km ICE will need its powertrain and sensors rebuilt and replaced (timing belt, spark plugs, alternator, water pump, PCV, O2 sensors, etc. and very likely will be dripping motor oil all over the ground).

I'm kind of hoping for more plug and play components like the old days of coach building if EV technology really is more mechanically simple than gas cars. Would love to put the latest/greatest drive train and battery tech into a BMW i3 carbon monocoque chassis and just have everything plug and play like plugging in USB connectors or something.

It’s clear a lot of good fundamental innovation is still happening in the EV space (as opposed to IMO negative innovation in digital features in ICE cars). This is why I leased my electric car; my family’s pattern is to keep a car forever (ICE car is circa 2009) and I don’t want to be stuck with something. I think resale value partially captures this problem.

How did they find F150’s selling for $35k new in 2023? If they’re comparing fleet model F150s either roll up windows to model Ys, that’s an incredibly unfair comparison. You would need to compare similar trim levels with comparable features to a model Y. An F150 with a higher trim has depreciation values similar to an electric vehicle.

These data points are based on 2023 inflated pricing as the entry point. Not much to see here.

In 2023 the car market was wildly overpriced due to the low interest rates and covid money combined with supply chain problems.

> For Tesla owners in the U.S., their 2023 Model Ys are worth 42% less than what they paid two years ago

Of course they are. It’s the same process as applied to DSLRs, which depreciated much more quickly than film bodies did only a few years prior.

Film bodies found their post-digital price floor quite quickly. DSLRs and mirrorless have only found secondhand price stability in the last three or four years and while a big part of it is the quality plateau at the end of the megapixel race (which might have some sort of analogue in the electric car industry, though I don’t know what it is —- range, perhaps), part of that was driven by pandemic component scarcity and inflation holding up the new camera market prices.

In short I think this depreciation will last for another decade until manufacturers feel confident they will sell enough volume to make cheaper cars.

I wonder if the terminal value of an EV will be higher than ICE. This seems possible if there are secondary users for batteries, motors, or if the mineral content is more valuable (e.g., obviously rare Earth and lithium but also the frames tend to have more aluminum).

The upside of this story might be a change of culture in EVs in North America. Everywhere else in the world, EVs are cheap cars to urbanites. In the U.S./Canada they're muscle/status cars for rich people. This cheaper second hand market might help popularize them.

I live in Canada where the distances are long and the weather is freaking cold. These are 2 circumstances very adverse to EVs.

But, still, I love my Kia Niro EV. It is the best car I've ever had. The driving experience is so good that it made me enjoy driving; I always hated driving before this car.

EVs run much smoother, are more stable and more powerful. Besides, if you charge them at home, they're far cheaper; even if you don't have solar panels (I do have them, too).

I know I personally would not buy a used EV because I've heard so many horror stories about battery replacements. If EV batteries were commonly designed to be repairable (replace by cell or in smaller banks of cells), I'd be less hesitant.

I also suspect there simply aren't many used EVs I'd want right now. I generally "techie" cars with tons of software features, big ol' touch screens, and half-baked self-driving features. I'm still not even comfortable with keyless start on my current vehicle and I hate the adaptive cruise, which I am unable to turn off. For better or worse, EVs seem to always be at the bleeding edge of these kinds of technologies.

Perception of failing battery risk is vastly overstated, creating real opportunity for savvy consumers to pick up a good used EV, so long as it isn't the very first EV's (e.g. those old Leafs) which had terrible battery health management.

The Volt I bought a few years ago is worth a small fraction of what we paid for it, 30% maybe?

Its also turned into a mountain of problems recently. It was great until about a year ago, then the battery started acting up. With 10 miles of charge left it will drop to 0, go into limp mode, and require dealership software to disable the thrown code and restart the car. Now it has a phantom battery drain going on, killing the 12v battery after being parked for a few days.

I really liked the car until these issues cropped up. Now I wish I hadn't saved the ~$2,800 in gas while the car depreciated by 4x that amount.

EVs range degrades in a meaningful fashion with time and new EVs are improving faster than ICE cars, thus faster depreciation.

The flip side of this is a general over correction as the new car tax break ends used EVs are really compelling today. A slightly used Long Range Model 3 is a far better option than their new Base Model 3.

Eventually ICE cars were designed for their resale value so people buying a new car every 3 or 5 years could afford to spend more money. That’s coming for EVs as the technology improves battery degradation means the range sweet spot will be chosen to keep the used market happy not just new buyers etc.

I don't think the comparison is fair.

The electricity and ICE fuel costs should be included if the battery is included. The battery is some sort of upfront fuel cost in a way the gas tank isn't.

Since mileage wear is proportional to fuel use anyway.

> While an electric vehicle is ideal for shorter trips in urban areas with moderate temperatures, they aren’t as effective as traditional cars for long-distance travel or when the temperature is very high or very low

On long trips, I plug in at bathroom breaks about once every 2-3 hours. I don't wait for a full charge because (surprise surprise), I'm going to need to pee before I deplete the battery.

Now that I've adjusted, I actually prefer it to gas, because I can just plug in and walk away instead of needing to babysit the car at the pump.

Note: This article compares the depreciation of a Tesla Model Y to a Ford F-150. Seems like not an apples to apples comparison, and it'd be more interesting to have a more similar comparison.

If you’re buying cars as an investment then you’re doing it wrong.

If you’re picking a car betting on being able to recoup some of the price later on resale value then you’re doing it wrong.

In the UK, there are massive incentives for "tax efficient" purchasing of vehicles. ie, there was a point where everyone who could was driving around in a Porsche Taycan because the tax implications of buying it were comically positive. Of course, those benefits don't translate to the secondary market, so of course there's a glut of 3 year old electric vehicles. No one wants them. Oh, and you can't buy a petrol car because the car companies are under the hammer to sell EVs.

What makes it a bad deal to own an EV is also coincidentally a great reason to buy one: they're getting cheap, fast.

I bought a used 2023 Model Y for about $36k (only 15k miles) it even came with upgrades like acceleration boost and an extra (unusable) back seat. This particular model was about $52k new in 2023.

I can't believe how much car I bought for my money. Autosteer is fantastic (FSD needs work). Early morning drive to the airport and the car was driving itself while I ate my breakfast and drank my coffee.

Depreciation off of the initial price, absolutely. EVs have always been grossly overpriced tech machines. They’re not traditional cars.

Look at Nissan leafs. They “traditionally” depreciate.

> Plummeting resale values are threatening to derail the world’s transition to electric transportation

Used cars are usually sold to someone who can't afford a new car. It can also be cheaper to drive an EV than a gas car.

So I think the opposite - Used EVs will create an opportunity for normal people to switch away from gas cars.

As to low resale value - I think tesla was VERY aware of this problem and artificially propped up their used market when they were starting out by offering a buyback program.

Why would I pay $35k for a used EV when I can buy a new one for $42k with a $7500 tax credit taken off at purchase?

This article doesn't seem to mention those credits, but they are likely a large factor in the difference between the nominal sale price of a new EV and the used market price.

If you don't factor in those credits, it looks like someone paid $42k for an EV that a couple of years later was only worth $30k. When in reality they paid $35k for that new EV as a net purchase cost.

Easier way to change the battery would decrease the cost of ownership by a ton and decrease the profits of EV companies also a ton. Which I guess is why it doesn't happen.

It is a combination of technology moving fast (aka nobody wants an old ev that does not have the latest advances in capacity and speed of charging) and also the real fear of battery replacement costs.

For the second one insurance companies could help alleviate the uncertainty, but I don’t see major vendors offering packages.

People don’t have 20k in a single shot to fix a battery failure. (Maybe cumulatively for a gas car one has to pay more, but it will be in small installments)

Computers get old and EV tech is constantly improving. ICE has been stable for decades. Tesla believes they can increase the market value of older EV's eventually by pushing autonomous driving.

I like the direction of https://slate.auto. Module, bring-your-own-computer. We'll see if they allow affordable trade-in's for upgrading battery/motors.

They could also work with CommaAI for autonomy.

There are many comments on here trying to justify why EVs lose value quickly. Why is it simply not the case that the price falls quickly because the market only clears at lower prices? Perhaps the demand curve just isn't there for EVs as it is for ICE vehicles?

In which case: no it's not that they're amazing - it's that they are less desirable than ICE vehicles.

(I used to own a Tesla now I'm back on a hybrid, and delighted about it)

Kelley Blue Book says "On average, new cars depreciate about 30% over the first 2 years, and continue to depreciate 8-12% each year after that."

https://www.kbb.com/car-depreciation/

When you factor that in, the difference between EVs and internal combustion engines looks like it's just a few thousand dollars...

Gas cars also depreciated faster than horses initially. We’ve only just started mass producing EVs. The scale advantages haven’t kicked in yet and EVs are already at cost parity.

People bought Model Ys during Covid close to 70k, of course it will show up as massive depreciation if manufacturer is selling the same shit for nearly half the price.

Also, all new cars have too much electronics and sensors, they all depreciate faster.

In the UK I think most EVs are leased, especially through "salary sacrifice" schemes from employers (which saves the whole income tax on payments). Is it the same in the US?

In such case I suspect the impact is mostly on leasing companies with issues on viability and leasing costs (for consumers).

In UK/Europe this might also explain why depreciation after 3 years is so high: Leasing companies trying to dump EVs returned at end of leases.

As pointed out by Scotty Kilmer on YouTube we currently lack the infrastructure both in terms of mechanics trained to work on EVs and the necessary electricity infrastructure to make a full transition possible. The answer isn't, "new types of cars" it's building the, "you don't necessarily need a car" society the Europeans and the Japanese enjoy.

Yes we're doomed is what I mean.

We are not at the top of curve where we get getting small incremental upgrades between models. Until the curve flattens out depreciation will be high.

This article is not making a good comparison.

Most EVs are luxury vehicles. Luxury vehicles depreciate much faster than regular cars. Luxury car buyers care if the car is new or not.

Tesla should be compared to BMW not Ford. Teslas depreciate at similar rates to BMWs.

EVs like the leaf are depreciating fast because their technology is becoming obsolete.

I think it is too early to be sure that EVs depreciate quickly.

Finally read the article

This issue is for fleet operators overextending themselves buying too many cars, and probably collateralizing debt off of them

Additionally, resale market demand and price discovery is one thing, but it really sounds more like the primary market is overvalued

And this aspect just made me lol

> 3-year-old EVs lost more than half of their value compared with 39% for gas cars.

so around 50% as opposed to around 40%. wow. stop the presses.

My MG4 was bought exactly 1 year ago. for 31k on Carsales.com.au *older models are still selling for 28k....

I dont think all EV's are dropping equally.

The EV transition sadly coincides with auto manufacturers giving up on making their cars repairable. ICE cars are getting harder to repair as well, but have some "momentum" since they often reuse parts that have been around for years. Meanwhile EVs are a clean break where manufacturers feel comfortable taking a hostile posture to the 3rd party repair market.

Comparing with Tesla is bad as there is a political aspect why people, especially in EU, do not want to buy it after 2024. Which means the statistics might falter. Also when I look at other sources the data say different. I mean if I look at data from the biggest reseller in Sweden KVD you have EV's that has ~80% of the original worth after three years.

I’d love to have an EV. I’m not even too frightened about the battery.

It’s just that the cars are aging like iPhones. Last years hardware package, hardware compatibility with latest software, etc are all people seem to talk about on Reddit. I think that’s a factor in the steep depreciation.

I just bought a new Corolla hybrid, it gets 60 miles per gallon and should last a good while. Maybe next purchase.

One factor that I don't see getting discussed is that more price conscious consumers are also more likely to have to live in apartments or park on the street. Even if they have a garage, their commutes may be too long to rely on level 1 charging and can't afford to upgrade. As a result, demand for used EVs is significantly lower than a comparable ICE.

gas-powered cars will become much more expensive to operate. Perhaps not in the US and A, but everywhere the Climate treaty of Paris has any value.

In Germany, you can buy used luxury cars at high discount due to being fuel inefficient for years now, and that is with barely a price increase for gas and barely 1 l/100km to through 3 l/100km cars taking up more market share.

The chart shows the fallacy in the argument - EVs don't depreciate, but instead are subsidized by various public and private schemes - meaning their new asking price as paid by consumers is not the same as the sticker prices.

The first hit of 'depreciation' is when this contradiction appears in the used price, after that they depreciate like normal.

I'm currently leasing an EV for 24 months 7.5kMi/yr. The residual price is over $20k lower than MSRP. Without subsidy and steep discounts, nobody would buy these things. And IMO, the residual is about $5k higher than it will be worth based on low-mileage used vehicles of the same model for sale. That finally gets us to the price, almost 50% lower than the MSRP, which I personally value this car new with 0 miles.

These EVs should be much cheaper. Either batteries are so outlandishly expensive that this will never be economically viable for the vast majority of the world outside of cities, or companies are playing accounting games.

In any case, when purchasing a used EV, you're essentially risking the entire purchase price if you get a battery lemon. Buying a Bolt or what have you for $15-$20k, and having to replace the battery at 60%+ of your purchase price, that's too much risk. Whereas if you bought a used ICE vehichle for $15-20k, and your engine fails, you might might need to spend $1500-5k for a repair, it's not all or nothing. And with a moderate amount of research, you can determine which makes or models are prone to early large repairs.

If EV manufacturers would sell a no-questions-asked insurance policy that guarantees the life of the battery to 250k miles, there would be no issue.

You may not realize it, but barring price, EVs (esp. Chinese EVs) are like smartphones. When you buy one, in 3 months there's another model with better tech and cheaper (ceterus paribus). Not ideal for buyers, but I like it this way.

Let's say (Chinese) EVs never appear in the world. Why do car prices keep increasing while only marginally better?

No news for me here (Used Porsches and EQSs are really good price-to-value propositions).

The question is rather whether this depreciation curve is going to normalize into that of Combustion Engine powered cars or if the „EV transition“ just means „transitioning cars into the E-waste category of smartphones and TVs“

If only people had better alternatives to car ownership, such as reliable, fast public transport, e-bikes, nearby shops, working from home etc… I would bet that car ownership would not be necessary for 80% of the current car-owners population. And maybe depreciation would not be that of a concern?

I’ve noticed hybrids are filling up dealers lots as well. They can’t sell them or won’t take a big loss on them. “Too heavy, expensive, less cargo space, and not enough benefits.” per sales.

There aren’t many EV’s on the lots either as the configuration team doesn’t see a need to order them from manufacturers if people aren’t buying them.

Electric voltage for the photon effect and development of valence bands in the 17th century is the origin for contemporary fuel conversion. This dynamic whereby the photon is subject to the container, whether a selenium element or cystalline silicon accounts for AC to DC electric semiconduction.

There is also a point where evs need new battery. Will it be possible to get a replacement battery at a reasonable price.??? How many 100,000 kilometers does a ev do before needing new battery? My current car at 269,000 km and car and motor are in good condition

The difference is only around $4k. And there's an upside to have an affordable EV resale market. Plus, if you're planning to own a new car for 5 years or more, you have to wonder what the resale market for gas cars will look like in the 2030's.

EV is more like a electronic than a "car"

what is unique to electronic???? improving fast (more than peers), but sometimes in the future where innovation is "maxed out" like phone, we could see an "cheaper" EV depreciate not as fast

Apart from being 2 years late, the article missed the number-1 cause of depreciation: fast progress in battery tech means that in 2 years your battery, even if its health doesn't deteriorate, will be much less performant than then-new ones.

This was a headline a year ago - Patrick Boyle has multiple videos on this topic.

Supply glut/low demand causes prices to go down.

https://www.youtube.com/watch?v=Zjuj1xB_Ze8

Basically, we don't understand batteries and their lifespans that well while we understand wear and tear on an engine quite well. Sure, these concerns are valid, but it seems like you could voice the same concerns over any "early" technology.

Batteries degrade over time. And the perfect-conditions range of many EVs isn't great to begin with.

Also, have you seen the out-of-warranty maintenance/repair costs for many EVs?

I assert that these 2 things contribute heavily to the rapid depreciation of EVs.

Or you can look at it from the opposite side.

There are plenty of deals to be had from a used EV market.

My 2023 Model Y depreciated quickly, sure fine. My 2019 Model 3, that I bought new, I made money on when I sold it used in 2021. With inflation and tax breaks the last few years the data for this means nothing.

Isn't that to be expected? First, battery technology continues to improve, and being battery-constrained ought to reduce the value of the older technology. Second, the battery degrades faster than an ICE.

Wouldn’t you expect a field with rapid technological growth to depreciate faster?

ICEs are a stable technology. There’s little learning curve. Next years EV could be a step change up from last years at the same cost.

How is this a bad thing?

It is strange how EVs are measured by how far they can go full charge when this is a metric I never have seen for fossile cars. It tells a story how inconvenient EVs or the charging network really is

As someone who made the mistake of switching to EV recently, I can see why, battery issues aside. They have a higher cost of ownership, and provide zero benefits beyond smoother acceleration. They are such a pain in the ass to keep charged, and I have to borrow a car for road trips unless I want to make it a very long road trip for no good reason.

Most people just don't want another after their first one. So there is not much demand. Dealerships are practically giving them away right now, which is how they snagged me.

Luckily, I can get out of this lease in a couple of years. Unluckily, I will have to spend more on a very quick ICE car now that I've experienced EV acceleration. Luckily, it'll still probably be cheaper than an EV.

Of course they depreciate faster - battery life declines much faster than engine life (at least by age) and battery replacement (as well as other maintenance) is significantly more expensive.

“ Older EV models depreciate even faster than newer ones.”

So the problem is already in the process of solving itself? Seems like standard first mover technology stuff.

This article seems not worth the pixels it’s printed on.

Why has Tesla depreciated so much since 2023? Could any of the depreciation be due to the character that is Elon Musk and his antics?

As someone who bought a 2023 Model Y 7 seat Long Range, I can tell you my desire to sell the car was 100% because of the negative brand value caused by Musk.

I’m not able to sell it because I’m currently $17,000 underwater on it and can’t afford to dump it, but I would if I had $17,000 to lose. I have a friend who did just that.

I love my Tesla (for the most part, it has some basic annoyances that remind me that building and testing a car for California is not the same as building it for everywhere), but as someone who tracked the depreciation of my own Tesla, it started plummeting when Musk decided to buy Twitter and spend his time exonerating the alt-right, and culminated with his foray into public policy.

I’m here to take advantage of it. I bought a 2022 Model Y performance. New price was 75k, used price 31k. Love the car. I plan on driving the wheels off it.

I think there are other factor's beside the battery and EV's being dumped in the market that may affect the resale value that are not mentioned in the article.

First of all I believe that the car manufactures (especially for electric cars) these days use planned obsolescence tactics to limit a car's lifespan at one side, while also promising the buyers that the car could last for far longer compared to their old ICE cars. However this promise often doesn't seem to hold up in the real world which will decrease confidence once the cars start breaking earlier. This is especially problematic when you are running an business calculating in the promised lifespan instead of the actual lifespan, once a business finds out (and does the math) often it will make economical sense to dump the fleet.

On top of that I think a big problem with certain cars on the second hand market is big onetime investments. You can see that already in certain internal combustion engine cars that are know to require a costly fix after x amount of miles. This is quite important in the second hand market since you often have to expect to do the "big maintenance" once you purchase a second hand vehicle as people like to sell slightly before this maintenance is due (and often not tell you).

Where EV's may run for a long time without problems they require costly repairs once they do break. Most EV's are build in a mostly non repairable way, like many modern vehicles, and you have to pray that the parts will be available after 10 years. Also a lot of maintenance on EV's can not easily be done by an enthusiast in a shed as it requires special equipment, certification and skills. Where with an ICE engine you may run into smaller maintenance earlier you are paying these fixes incrementally, and may be able to do a lot of the maintenance yourself.

On top of that I think there is a certain saturation in the electric car market where people that care about buying an EV increasingly have a EV and the people that don't care (or prefer ICE) don't want to invest the additional premium, or uncertainty to buy an EV. For example I don't buy an EV because it's very impractical to charge it where I live and I like the added flexibility (miles) that an economy ICE car can provide.

This is why I lease not buy now. I am watching the development of solid-state batteries as that has the promise of greatly reducing battery health issues

EVs are in the first phase of the mobile phones.

Within very few years they will be like modern phones that you only update because they're worn down.

IMO the biggest issue is the lack of aftermarket cheap battery replacements, and the fault of that lies on car manufacturers.

Currently: $36,000 buys you a used 2020 Tesla Model X with FSD and a 35,000 mile odometer, maybe 5-10% battery degradation.

Is the price before dealer markup or MSRP?

Tesla dropped their prices a lot after covid boom, that completely distorted the market.

Just to add: For people like my family, who drive cars until they die, resale value is pretty irrelevant.

Replacement battery cost would bd one reason. Decreasing range as battery ages would be another readon

Where's my Robo Taxi that's worth $250k because it drives people around while I work?

For years, certain administrations force fed us EVs, and now the force feeding is over.

Well, I don't entirely agree.

But where we live there is a huuge fanbase of veteran cars like Chevrolet, people are nuts about them and arrange day long cruising around the city a few times a year.

Considering the complexity and rapid technology changes of electric cars, I doubt we'll see many working VW ID.5 in 70 years cruising the streets.

Might be a great time to buy EV.

And/or maybe it should have been the time of the PHEV first.

Gas powered cars are getting worse. Everything is being recalled. Even Toyota

the story happened in China in 2015-2023 or something

Yes EVs are "depreciating faster"

But then EVs hold 40% of the market, ICE cars were obselete.

You can by brand new B-segment sedans in China for 10k.

You know you're old when - the headline instantly reminds you how fast those newfangled "desktop computers" depreciated, compared to the adding machines and typewriters that they were trying to replace.

I am impressed by the efforts of the fossil fuel industry (and I think many car manufacturers) to discredit EVs. Their campaign has been sneaky and devious and very, very effective.

To spread good FUD, there has to be truth in it, so that debunking it gets very difficult. Over the years I've seen so much FUD it's not even funny (see for example https://interactive.carbonbrief.org/factcheck/electric-vehic...).

This news story shows that the FUD has worked well (especially in the US), hats off to the fossil fuel industry. It's also a double-whammy: this story will spread, so people will be even more suspicious of EVs, which will cause their popularity to fall, which will cause their resale prices to fall…

It's quite sad, but also impressive.

This is a fairly meaningless, and very much expected stage of EV adoption. EV costs had to come down, that's just a given. They were priced at a premium over ICE vehicles. As production costs lowered and more manufacturers started making the move to EV's, the prices naturally dropped. Meaning an EV that previously cost $100k and now costs $80k would understandably mean the resale value of those $100k earlier models is going to be poor.

We're still way too early in the shift to EV's to have a reliable metric of long term resale values, but theres basically nothing to suggest they would be lower than ICE vehicles once people stop believing the utter nonsense being pushed about EV's longevity by a select few.

Another reason that this matters (which is artificial) is that at least in the US so many car owners are on "permanent car payments".

They never pay off their cars and trade them in on another one and just keep making payments without really ever owning a car outright. And increasingly as prices have gone up they are trading cars in that they are underwater on, rolling old debt into the next loan!

If you're in this category of insane financial ignorance trying to appear rich but actually being "car poor" of course this resale is a huge problem. But for anyone who buys a car outright or pays off their loan and then drives the car for many years it's not a problem at all whether you bought new or took advantage of the massive depreciation and bought a lightly used one for a great price.

bad for new car buyers, great for us used car people, so there is a silver-green lining to this whole affair.

Finally the battery car scam is over

Seems like we need electric houses.

In my country (UK) it’s entirely caused by a policy that means people in well paid jobs can pay for a lease agreement direct from their salary and save tax. It also can be used if you’re a high earner to bring you back under a threshold that gives you a subsidy for childcare. So if you earn more than £100k and have kids under 5 you are almost stupid not to take a lease for an EV if you have the need for a car anyway.

As a result of the above, EVs that are ~three years old are flooding the used car market and you can pick up a Tesla for < £20k

Weird that this is presented as a problem for some reason.

They're objects that lose value when you use them. That's normal.

Another angle to look at it is that cars cost a lot, petrol and electric alike. The only way to reduce depreciation is for the folks to be able to buy used cars for a lot which means financing.

> A U.K.-based study found 3-year-old EVs lost more than half of their value compared with 39% for gas cars.

40-50% depreciation is crazy, there is little reason why this should happen as cars do not change that much in such a short time. I bet they would not depreciate that hard if a new car was sold at 30k.

wow 800 comments about an immature ev market complaining of depreciation values.

if more of the electorate knew they could use these ev batteries in second life applications to power their homes businesses or otherwise be recycled into functional power providing devices, perhaps the percieved value wouldn't be so low. but right now everyone is convinced that the batteries are expiring at a fast rate when in reality they maintain usability into the 100s of k-miles.

but again, this article is about india, which is about 10 years behind the west in electrifying anything. so ... why are we asking the new kids on the block about depreciation?

why don't you ask the norwegians (95% ev this year) about depreciation? their market is much more mature with many more advanced consumers that can appraise the depreciated batteries much better. but you don't ask them because you want to muck-rake EV.

don't go to the premier ev market for this information go to the most under-developed one.

why don't you go ask south africans what they think about depreciating batteries?

ugh. 400 points for this drivel. you people are literally inane.

This is another way of saying "EVs are getting cheaper," so it's hard to understand why this is framed negatively.

Moreover, EV batteries are recyclable. The main thing holding back lithium recycling has been the supply chain of used batteries, because the batteries are quite durable.

If the resale value of EVs is falling, that makes it easier to extract the batteries and use the raw material to build better batteries.

The article is basically talking about Tesla.

Buyers of new Teslas are basically the TSLA cult.

Used buyers... aren't.

Hm, what might have happened that might have destroyed the overall brand with sensible, probably-liberal buyers of used EVs? I vaguely recall some salute thing. Don't really remember the specifics. I just remember there was a bit of a hubbub.

No shit.. you have gas cars that drives for 20+ years. Let's see if EVs can do that without costing a fortune.

Comparing re-sale price of Tesla to Ford is absurd. Elon Musk alienated most of Tesla‘s potential customers. I would assume more of the price drop comes from that than from anything inherent about EVs.

sounds like retail price needs to drop

Control for: Companies that make it impossible to source parts for repairs (Tesla) Companies with absurdity expensive repairs for minor cosmetic damage (Tesla again) Companies whose CEO threw up a Nazi salute on national tv (also Tesla, seeing a trend here?) And the science might tell a different story.

People are fed up with being forced into buying a technology they don't want or need. It's idiotic throwing away the mature tech in petrol and diesel cars in favour of electric. And yes, I still drive petrol and I love it!

Why does anyone accept the government enforced massive downgrade that is switching from gas to electric?

Man, I wish this were true, because I would love to buy a cheap second hand EV right now.

Looking across fhe used car sites and KBB, I'm probably going to buy new instead.

There's a concerted PR effort to slander EVs out there, take all articles with a huge grain of salt.