By on December 27, 2013

2013-Tesla-Model-S-fire-2

Driving a new car off the lot takes off 20 percent immediately upon leaving the dealership, so it goes, but for EV owners looking for some green for being green, they may wish they’d bought a Toyota Camry instead.

At the request of USA Today, Kelley Blue Book projected the residual values of EVs over a five-year period in comparison (for most cases) with their diesel, gasoline and hybrid brethren. The results? A much lower overall residual value for the pure electric models according to KBB Director of Residual Consulting Eric Ibara. One of the worst offenders mentioned, the 2013 Nissan Leaf (which has no petrol-driven sibling at all) will hold only 13 percent of its $28,000 base price by 2018, while a Sentra SL will keep 36 percent of its $19,500 base in the same period.

The causes? Discounts, incentives and federal tax credits, for one; though owners might not feel the pain as hard when they return their lease to the dealership thanks to heaping helpings of these financial goodies, the overall effect hurts residual values in the same way too much candy hurts your little one’s tummy and teeth. The other is that consumers want to own a new EV more than they want to pick up a Leaf that may need a new battery sooner than later.

Those who opt for plug-in hybrids, such as the Chevrolet Volt or Porsche Panamera E-Hybrid, will fare better come re-signing at the dealership; the latter will keep 37 percent of its value versus 41 percent for the gasoline-only model. Overall, however, the EV market is still in its growing pains, and will remain so for the foreseeable future.

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69 Comments on “Electric Vehicles Suffer Depreciation Harder Than ICE Counterparts...”


  • avatar
    bumpy ii

    No surprise here. The low residual bakes in the cost of replacing the battery pack. This is more or less analogous to 5-7 year old luxury cars being discounted for the presumed expensive repairs they will need soon.

    • 0 avatar
      Waterview

      You’d think the manufacturers would do more to inform buyers in response to the “what happens when the battery pack needs to be replaced?” question. At this point,I believe the warranty is approx. 8 years, but what happens then? Is it a $2,000 issue or a $7,000 issue? Are they to be thought of as disposable cars?

      • 0 avatar
        bball40dtw

        It depends on the car. Nissan has a battery replacement program. The details are fuzzy though. Prius replacement (I know its a hybrid, but it is a good comparison) battery costs have significantly dropped since the Prius was introduced. You can get batteries from Toyota for $2300 or find a solution from a third party. There are places that install remanufacturer Prius battery packs for around $1500.

        • 0 avatar
          Brian P

          Keep in mind also that pure EVs have a much higher capacity battery pack (probably more money) and they generally use a different chemistry. I don’t know if a LiFePo battery can be refurbished without completely breaking it down and recycling its component materials.

          • 0 avatar
            bball40dtw

            Thats true. Nissan is supposed to have a program where you pay $100 a month for a battery pack. However, they don’t say for how long or what the terms are. In theory, if EVs become more popular, everything about them should become cheaper. I don’t know if thats reality though.

          • 0 avatar
            Luke42

            @BrianP:
            Refurbishing a lithium pack is likely to be pretty similar to refurbishing the Prius pack – you take the lid off and swap out the bad modules.

            Things that could be different:
            1. Determining which modules are good or bad. Is it a matter of querying an OBD computer? Or do you take the module out and put it on a battery conditioner (time consuming)? Or, do you just open tne lid and look for swollen modikes like the shadetree Prius mechanics?
            2. Do you have to replace the modules in groups?
            3. Are there things which fail that aren’t the modules – regular old electronics failures in the BMS, for instance. Or connectors. Maybe some packs will require these kind of fixes.

            Looking at the pictures of the Volt and Leaf packs, they’re clearly built to be serviced this way. But the devil is in the details, and we won’t really know until retired engineers can afford to buy these things and reverse engineer them as a hobby (which happened some time ago for the Prius, with excellent results).

    • 0 avatar
      Stumpaster

      Presumed?

    • 0 avatar
      Pch101

      Battery pack or not, the problem is that there isn’t much demand for EVs in the used car market. As is the case with many luxury cars, those who really want one will probably get a new one.

  • avatar
    jmo

    “Driving a new car off the lot takes off 20 percent immediately upon leaving the dealership.”

    Wrong.

    • 0 avatar
      Luke42

      Really?

      Make your argument.

      • 0 avatar
        zeus01

        Ok, I’ll wade into this one:

        The actual SELLING PRICE of a low-mileage one-year-old used car will typically be 20% to even 30% lower than its original selling price when sold new last year, depending of course on the vehicle’s popularity and buyer demand or lack thereof.

        But the dealers who sell these used cars are always going to post an ASKING PRICE that’s no more than 10% lower than the new-vehicle price regardless of consumer demand.

        If demand is strong for a given vehicle they’ll usually get somewhere close to that asking price. (after all, there’s always at least one buyer in five who would rather save $20 on each of their car payments at the expense of owning a used vehicle with less warranty and an uncertain past than spring the extra for a new car).

        When demand is weak the car will sit on the lot until the asking price comes down by 20% or thereabouts, after which the buyer and seller agree on a SELLING PRICE that’s around 30% below original. If the dealer won’t budge the end result is often that the dealership still owns the car long after the buyer buys elsewhere.

        • 0 avatar
          jmo

          “the actual SELLING PRICE of a low-mileage one-year-old used car will typically be 20% to even 30% lower than its original selling price when sold new last year”

          If you said MSRP you’d be correct. But, if you look at actual selling price new to actual selling price used it’s 5%.

          As I said below according to Edmunds the CPO asking price for a 2013 Camry with 12k miles is $200 MORE than the actual selling price of a new Camry. Even after the deal is done you’re highly unlikely to get the price down from 21k to 17k.

      • 0 avatar
        NormSV650

        Computing off MSRP is invalid as no one pays MSRP. As mentioned tax breaks and the usual incentives are not figured.

  • avatar
    SCE to AUX

    On the off chance I decide to keep the Leaf after my lease is up, this is why I have no intention of paying the buyout price in the contract.

  • avatar
    Big Al from Oz

    Well, how odd!

    I mean, if you need a handout/subsidy to sell one then obviously there’s little demand.

    Little demand equates to low value.

  • avatar
    bball40dtw

    If my daughter were old enough to drive in the next few years, I would seriously look at a used EV. The high school is less than 2 miles away and I like the idea of the limited range. There is also no/little maintinance. In a three vehicle household, it seems like these could be a great deal.

    • 0 avatar
      Toad

      Having high school age daughter stranded by the side of the road because she forgot to charge her car the night before? Not a good plan.

      When your kid becomes a teenager and you see how dumb they can be (at least occasionally, if not always) you might rethink your car choice :)

      • 0 avatar
        bball40dtw

        Haha. Fair enough. I didn’t think about that. I wouldn’t want her pluging her car in at the high school and having a bunch of people on TTAC call her names either.

        To tell you the truth, I would have this great plan for an electric car, then I would just buy her a big grandma sedan. It would probably be from a dead brand like Olds or Mercury.

        • 0 avatar
          highdesertcat

          What an overwhelming number of people do when their ‘kid’ gets to be old enough to drive, is hand them the keys to the family jalopy.

          Of course, if the ‘kid’ is going to be leaving home and needs a car of their own, like going to college, no kid wants to show up in mom&dad’s car. Then again, it beats walking.

          Right now, I’ve a got a 16 yo grand daughter who tools around in what used to be grandma’s daily driver 2008 Highlander, and a 21 yo grand daughter that’s wearing out the 2011 Elantra we bought for her to go to college with.

          I would be very hesitant to buy something used because I would not know the history behind it.

          I wouldn’t want any of my loved ones to be broke down on the side of the road in the middle of the desert.

          • 0 avatar
            3Deuce27

            Get your kid, a hammer, and a hundred nails. Make her/him drive all of those nails, completely. If they bend one, or more, teach them to straighten it up, and drive it home. The lesson is complete when all of the nails have been driven home and none are bent over. The basis for building skills and common sense, lie in those hundred nails or something similar.

            We can’t buy a guarantee of absolute infallibility with the purchase of any new vehicle.

            We can’t protect our love ones from everything, and we shouldn’t.

            The sense of entitlement by the post war generations, is an Achilles heel. Get over yourselves, before its too late.

            Practical survival skills will be the most valued of skills in the too near future, and part of that, is being more then a little handy.

            Southern gals have a saying. “A man can be Dandy, but if he ain’t Handy, he is just a temporary Fancy.”

            Get over the fact that the new car or used car that you fancy, doesn’t have automatic memory side mirrors that adjust down when ‘you’ select reverse. This is just another form of entitlement that won’t serve you and yours when the shit hits the fan.

            And who’s too say, if its the vehicle that breaks down in an inconvenient place, it could be a result of human error. Most airplanes hit the ground in perfect condition. How are you going to protect your loved ones from being human? Your not.

            We should be rigorous in the management of our affairs. Nothing like running out of fuel or charge to teach that. To bad we no longer have to hike to the gas station or change a tire. Now there is a teaching moment no longer, normally, available to us with cell phones for all, excellent tires, and Trip A.

            The First World is full of pansies that will fall like dominoes if it ever… when, it gets rough.

            What we all should be teaching our kids, instead of coddling them, is practical, day saving, life saving, money saving skills. Dealing with situations with common sense acquired by building varied skills. Start with a hammer and work up to a scalpel. The only problem with that, is, most parents don’t have any practical skills. Everything is solved with a credit/debit card.

            But, instant gratification rules, we can’t be denied… anything, ever, we are entitled to a perfect, safe, life with all the conveniences.

            My Friday night rant on the current state of, so called, humans.

            You all have a nice weekend.

          • 0 avatar
            Jack Baruth

            Well said.

          • 0 avatar
            ajla

            I suppose that I’m not entirely sure how my ability to replace a head gasket or diagnose a vacuum leak or hang a shelf or repair a toilet will help me if society were to crumble.

            But, I guess I’ll take it.

          • 0 avatar
            NormSV650

            Daughters should be shown how to change a tire. My Dad should my sister 25+ years ago. Could she show her daughters how to change one, probably fumle her way through it.

          • 0 avatar
            highdesertcat

            3Deuce27, yep, I used to feel that way too when my kids were still living at home.

            It worked out real good for them — they’re not a burden on me today, nor do they live at home with me.

            But I have changed. The grand kids growing up in my house today also know how to change a tire, change the oil and filter and check under the hood of the cars they drive.

            We also taught them how to tow horse trailers and haul feed with the pickup trucks, and they both hold down part-time jobs, either at school, at McDonalds, or both.

            But the most important skill taught was how to handle, fire and maintain firearms like pistols, revolvers, rifles and shotguns. Yes, they also know how to reload.

            Things have changed since the days when your philosophy (and mine) was predominant.

            These days it’s all about getting your kid a leg up on the competition, and you do that any way you can.

            I have evolved with the times. I have learned to assess, adapt and overcome. And I did all this without suffering from “affluenza.”

            We’re not all dealt the same cards in life, but you gotta know when to hold’m, and you gotta know when to fold’m.

    • 0 avatar
      Atum

      There’s someone at my school with a white Leaf. My school isn’t far away, no matter what direction you’re coming from, and while an electric vehicle seems like a good idea, I think they’re better for cities and urban places, not suburban school travel. This is from someone who goes to a school where people drive modified RX-8s and lifted GMC Sierra 2500s, as well as purple Grand Caravans.

      • 0 avatar
        bball40dtw

        I live in a very densely populated suburb of Detroit. If my daughter was attending high school at the local public school, her typical commute would be three miles roundtrip. Everything that she could ever want as a teenager is within ten miles. If she needed to go someplace on a weekend that was out of the range of the EV, I would be happy to swap cars because everything I could ever want as a 30 year old is within ten miles. My work commute is what prevents me from buying an EV.

    • 0 avatar
      Pch101

      “The high school is less than 2 miles away and I like the idea of the limited range.”

      That doesn’t sound like a problem that a bicycle and sturdy pair of shoes couldn’t fix.

      (As an added bonus, she will be able to lord over her kids that she had to walk ten miles each way to school, in snow and uphill in both directions.)

  • avatar
    jmo

    Also, shouldn’t the depreciation be calculated based on what the owner actually paid vs. MSRP?

    Looking at a new 2014 Camry vs a 2013 with 12,000 miles, according to Edmunds the price gap is 5%*. But, that’s true market value not MSRP.

    *Strangely, the estimated CPO price for the 2013 Camry is $200 MORE than the price new after all the incentives are included.

    • 0 avatar

      This has always been my pet peeve about depreciation. It’s also the reason a lot of American cars have a reputation for depreciating more – because they are often sold with huge rebates, so when you look at used value vs MSRP it looks a lot bigger than the actual difference between what the buyer paid after incentives and discounts vs. what it’s worth today.

      • 0 avatar
        VoGo

        Spot on. The headline is misleading because the comparison is meaningless.

        If you were to subtract the tax credits from MSRP, and then use that as your starting point to calculate depreciation, then you would have actual analysis worthy of TTAC.

        • 0 avatar
          Pch101

          NADA performed the analysis, and found that EVs and PHEVs depreciated faster than the market average, even after accounting for the tax credits.

          http://www.nada.com/b2b/NADAOutlook/UsedCarTruckBlog/tabid/96/entryid/267/Plug-in-EVs-Retention-Revisited.aspx

          Steep depreciation is a genuine issue.

          • 0 avatar
            Madroc

            Given the current buyer base for these cars, I’d be more interested in seeing a comparison with comparably-priced third cars or expensive options. Two-seaters, luxury cars, convertibles, the panoramic roof or “technology package” that costs $2500 new and adds $500 to the trade value 3 years later.

            I’m not saying the same conclusion wouldn’t hold (I don’t know one way or the other) but it would be a better comparison than the mass-market econoboxes in the linked article.

            Interesting regardless. Thanks for the link.

          • 0 avatar
            Pch101

            Options generally don’t hold their value as well as the rest of the car (which suggests that many options packages are either overpriced in the first place or else not much valued by used car buyers.)

            I’m interested to see how these numbers end up looking at the five-year mark. My guess is that the EVs will be even worse for a couple of reasons:

            -A lot of EVs are leased, which will skew the numbers (the first driver is a payment buyer who isn’t necessarily focused on purchase price)

            -The EV crowd wants a shiny new car, not a bargain used car.

            In other words, it somewhat resembles the top-end of the luxury car market. For a self-proclaimed early adopter, there’s no glory in being the second owner, while leases provide for an easier purchase experience (in this case, the lease is a more convenient means to get tax credits to the drivers.)

      • 0 avatar
        Madroc

        I bought my first Big-3 car a couple weeks ago and it “depreciated” over 18% *before* I drove it off the lot brand-spanking-new.

  • avatar

    Kudos to TTAC for writing this piece and more kudos to Eric Ibara and the crew at KBB. ERic is a very serious guy! BUT one should recall these are only projections. There are many unknowns going forward. I tend to agree with them as buying the first wave of a new technology is risky.

    This also calls attention to the fact that Elon Musk guaranteeing the residuals of the Model S is a risky bid to maintain production line volume. At some point Tesla has always known they will have to deal with a change in their supply/demand ratio. It appears they have already signaled how they will respond. This is the same kind of subvention used by traditional OEMs to prop up sales to keep them in line with production. It would help if Tesla could buy residual value insurance but with a new technology, that’s problematic. Seems no one except Mr. Musk expects a Model S to be worth 50% after 36 months. OR maybe he does know better and is just deferring the loss for 3 years?

    • 0 avatar
      Pch101

      If Tesla didn’t have a quasi-leasing program, then the brand would almost surely fail early due to lack of volume.

      The leasing program may blow up in their faces three years from now, but it buys Tesla 2-3 years that it wouldn’t have otherwise had. Tesla had no choice but to roll the dice and hope for the best.

    • 0 avatar
      993cc

      I’m only speculating here, but maybe Mr. Musk is betting that battery technology will improve, raising the residual value of used electric vehicles. Imagine if in a few years, some new type of battery could be installed in a reconditioned used Tesla, resulting in longer range at a lower price than the original.

    • 0 avatar
      3Deuce27

      3 to 5 years. Who knows what world we will be living in by then. Fuel at $5.00+ a gallon will certainly effect used EV and Hybrid values, as it did when fuel prices spiked after the beginning of the recession. The prices of used Honda ‘Insights’ doubled and are still quite high compared to their Low and KBB values a few years ago. That is, if you can get anyone to sell one.

      Fleet reports on Prius hybrids, have their battery packs lasting much longer then anticipated, 250,+++ miles and still going. Compared to rebuilding a modern auto box, the b-pak replacement should be manageable.

      I would rather spend the next five years in an EV then and ICE daily driver, and I would never sell it, so residual values would mean little too me.

      If anybody squirreled away a GM EV-1 and wants to sell it, I have a quick $35,000 cash for you, today.

      • 0 avatar
        Pch101

        Tesla pushes batteries in ways that Toyota does not.

        A study by Plugin America reported that 19% of the Roadsters had partial or complete replacement of their battery packs. Imagine the hue and cry if the Prius had that sort of failure rate.

        But what Toyota and other mainstream automakers do to preserve battery life comes at the expense of range. Tesla designs its charging systems to top up batteries and maximize use of the batteries’ capacity, which is good for short term range but comes at the expense of longevity. Toyota could do the same thing as Tesla, but that would not fit well with its reliability targets.

        • 0 avatar
          mcs

          >> Tesla designs its charging systems to top up batteries and maximize use of the batteries’ capacity,

          Are you sure about that? What’s your source. If you look on page 25 of the Model S Owners Manual, it implies they do try to maximize the life of the battery:

          “When plugged in, Model S wakes up when needed to automatically maintain a charge level that maximizes the lifetime of the
          Battery.”

          • 0 avatar
            Pch101

            Tesla doesn’t report figures, but Model S owners on its forums estimate that they’re getting about 81-82 kwh on an 85 kwh battery (about 95%.) That would be consistent with levels reported for the Roadster.

            The Toyota RAV4 EV has a Tesla drivetrain and battery pack. Yet Toyota reports usable capacity of about 84% (35 kwh out of 41.8 kwh) http://www.toyota.com/content/ebrochure/2014/rav4ev_ebrochure.pdf

            Unlike the Tesla wundercars, the RAV4 EV has a range of only 100 miles. It should be easy to guess why there is a difference, and it isn’t because the guys at TMC are a bunch of idiots who don’t understand batteries.

            Previously, Autoblog reported that the Chevy Volt has usable capacity of about 50%, while the Roadster uses about 100%.

            green.autoblog.com/2009/11/19/greenlings-whats-the-difference-between-kw-and-kwh/

            There are three ways to get more range out of an EV: (a) build a bigger battery, (b) top up the battery and/or (c) use up more of the battery.

            Just as there was never a secret 100 mpg carburetor, there is no magic Tesla battery technology. Toyota certainly hasn’t discovered any magic pixie dust while using Tesla’s batteries and motors, leaving it with the same range as every other similar EV producer.

            But unlike Tesla, TMC has a long-term reputation to protect, and it can’t afford to suffer the 19% battery failure rate that Tesla has to date with its Roadster. In contrast, Tesla is busy chastising New York Times reporters who have the gall to drive on interstates at speeds about 50 mph and stay at hotels that don’t have EV chargers.

  • avatar
    hf_auto

    13% residual on a Leaf seems awfully pesimistic. Will a 5 year old Leaf REALLY sell for $3500-4500? I highly doubt it given 3 year old Leafs (Leaves?) are selling in the $18k ballpark here.

    • 0 avatar
      bball40dtw

      I hope its right. If I could buy a Leaf for $3500 every two to four years, that would be great.

      • 0 avatar
        hf_auto

        Indeed, that would be a phenomenal deal for a commuter. $3500, $1/day in “fuel”, and nearly zero maintenance other than tire rotations would be amazing. Unfortunately, I’m thinking a more realistic projection is in the $10k range.

        • 0 avatar
          bball40dtw

          At $10K, its still a good deal if you have the right commute or useage plan. The X factor is the longevity of the Leaf’s batteries, which is still unknown. I have no doubts about most hybrids, and we should be finding out about all the full EVs soon.

  • avatar
    alexndr333

    The subsidies for these cars surely skews their value in the aftermarket. I just leased a 2014 Spark EV which had a $3400 discount from GM, a $2500 rebate from the State of California and a $7500 tax credit from the Fed. A $27,800 car is reduced to $14,400. I can believe that the value of this car will only be 28% of sticker in five years, but but it seems closer to 50% of the value to me when I leased it. It’s a terrific little car for running around town, so I may well buy this one at the end of the lease – or one like it.

    • 0 avatar
      mnm4ever

      @alexandr – Do you mind letting us all know what you ended up getting the Spark EV for? How much out of pocket and per month did it work out to?? I have been waiting for these to come out nationwide, I think it will make the perfect 3rd car for us if the monthly cost is lower than the Leaf lease deals.

  • avatar
    TrenchFoot

    I think the low residual value of EVs is at least partly due to the unintended consequences of subsidies. On top of the $7500 federal tax break, in Washington state we also get the ~9% sales tax waived on new EVs. A 3 year-old Leaf doesn’t stand a chance of getting sold when a new model can sell for the same effective final price.

    It’s for this reason that the Nissan sales guy told me that almost all Leafs coming off lease are loaded up onto a cargo ship and sent to Norway. Demand there is huge and Norwegians get to benefit from our tax breaks. Sure the incentives help prop up the new market and increase new EVs sold, but they aren’t doing much to keep them on the roads.

    • 0 avatar
      SCE to AUX

      I haven’t heard of the Norway-used-Leaf angle before. Is such a scheme even legal? Since most leases are 3 years long, the first Leafs wouldn’t be coming off lease until now.

      And while demand for Leafs in Norway is relatively huge for there, it’s only about 1/3 the sales rate of Leafs in the US.

      I’m not saying you’re wrong, but you’ve piqued my interest on the question of where used EVs might go.

  • avatar
    Garak

    Back when Think City was available, the vehicles lost about 50% of their value in a year regardless of the mileage. You could have bought a new car with the depreciation alone. I don’t know about current prices, because no vehicles are for sale right now, but I’d guess they’re next to worthless. Possibly one of the worst ways to invest 50000e.

  • avatar
    Atum

    Nice thumbnail picture, haha.

  • avatar
    Dimwit

    AS with everything new, it’s hard to predict future events. Adding to the uncertainty is the fact that the tech is almost unique to each manufacturer. What is true for Tesla isn’t for Nissan or Toyota. I can see values being very regional. How many charging stations are installed? What is the cost of installing new ones? How about in the secondary market?
    I can see a case where there is good residual value and just over the state lines you couldn’t give it away. Tough to figure a proper residual with that.

  • avatar
    ExPatBrit

    There is a need to evolve something new to support used EVs, like a CPO plus a charger install as well. Will the old chargers be removed from the previous owners premises and who will pay for that?

    I could see a $1000-3000 home electrical install cost killing a used EV deal.

    • 0 avatar
      bball40dtw

      Many power companies offset those costs. DTE had a program where they gave you a $2500 incentive towards a Bosch install and they installed a seperate meter to bill you at a discounted rate for EV charging.

      • 0 avatar
        ExPatBrit

        With a new purchase that would be expected, however once the car is a 5 years old and it’s for sale on a non-dealer lot I wonder how good the after-sale support is going to be on a $10,000 car.

        I suspect this will put the casual “just looking for a good secondhand set of wheels” people off if they have to arrange a lot of extra stuff themselves.

  • avatar

    Well, that settles it…

    I.C.E it is!

  • avatar

    I wonder what this means for Tesla. So far, asking prices of Tesla Model Ss are very, very close to the full retail price – so close that I’m not sure if it makes sense to even consider a used Tesla unless you desperately need the car right this second.

    If it costs $10k to replace the battery at the end of 8 years, I wonder how the cost of this compares to, say, a Mercedes-Benz CLS that costs several thousand dollars a year in engine/brake maintenance to keep on the road. If it costs $3k a year to keep a fancy European sedan on the road, and you own your EV three years before the battery pack runs out, that’s not too far from the cost of engine maintenance on an ICE car competitive with the Tesla.

    D

  • avatar
    3Deuce27

    In the next 3-5 years, the Millennials , higher fuel costs, and a planet warming too fast with dense urban area/cities charging for ICE’s to enter the city or the core of the city, and the possibility of that extending nation and world wide with a carbon tax , will put new and used EV’s in demand.

    They won’t be able to build batteries fast, enough and China holds a a good deal of the raw materials essential to battery production. Your future EV/Hybrid will most likely be Chinese in origin unless other sources can be economically processed
    (sea water) to level the playing field, internationally.

    And Lithium isn’t the only rare earth substance that could effect battery and motor production, driving the cost of EV/Hybrids ever higher as demand escalates.

    What we need is high density capacitors

    “China controls about 95 percent of the global market for rare earth metals and expects to use most of these resources for its own production.” Bat U

  • avatar
    Luke42

    The depreciation of the Leaf might change dramatically, if the rumored product debuts of the 200 mile EVs somewhere in the $30ks by Tesla and GM materialize.

    Until then, I’ve been shopping for used Leafs and Volts (I like both cars, but I’m reluctant to spend new car money), and they haven’t depreciated as much as *I* want them to.

  • avatar
    HerrKaLeun

    It is very simple, the new EV technolgy is constantly improving and next years model will be cheaper and have better range etc. The better is the enemy of the good. Tha is why they depreciate more. Jsut look at the recent EV price drops and the anouncements of future MY EV improvements.

    ICE technology is very mature and it is unlikley next year you get an ICE car that has 50% more mpg at lower cost. That is why they keep their value… the new car just doesn’t really add that much value.

    This is very typical for new technology and also typical for computers etc.

  • avatar
    3Deuce27

    “I suppose that I’m not entirely sure how my ability”

    Your acquired practical skills(always valuable), acquired common sense learning and apply those skills, your ability to analyze a situation, and your can do, lets get dirty and get it done attitude…. that’s how ‘Ajla’

  • avatar
    tekdemon

    The residuals are somewhat misleading though since the up front cost is actually subsidized heavily by the government. In the case of the Leaf people are getting $7500+ (some states have huge incentives on the state level that bump this up significantly) subsidized out of the lot, so counting the residual vs MSRP is rather ridiculous and will give you crazy low numbers for the residual. People buying them second hand won’t be paying more than new for one because that makes no sense so they’re buying at a discount to the post government incentive price.

    • 0 avatar
      highdesertcat

      Exactly! The taxpayers subsidized them.

      It would have been different and more meaningful if these cars had not been subsidized. The only ones incurring a ‘loss’ are the taxpayers.

  • avatar
    blowfish

    a pure EV residual greatly affected by
    oil prices in 2-3 yrs time, should oil went back to 1 buck a gal, u bet your derriere that EVs will fly off the shelf.

    price of new batteries, there can be a technology break thru or these raw material became so rare that a dead battery worth a few $$ too and a new one is unreachable. Back in the early days of 8088 IBM desk top, most were 10k each.
    So as cell phones too. I leased my first cell, only a week later the dealer offers trip to mexico with any purchase then i knew the price must be tumbling down.

    When it coming off lease we all gamble too, sometimes leasing co. can take a real bath. Or wish u dont exercise buy out as the car’s residual gained lots more too.

    When my lease finish I can buy a used phone cheaper than a buy out!


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