Electric Vehicles Suffer Depreciation Harder Than ICE Counterparts
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.
More by TTAC Staff
Comments
Join the conversation
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.
"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'
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.
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!