Electric Vehicles Suffer Depreciation Harder Than ICE Counterparts

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.

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  • Tekdemon Tekdemon on Dec 28, 2013

    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.

    • Highdesertcat Highdesertcat on Dec 28, 2013

      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.

  • Blowfish Blowfish on Dec 29, 2013

    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!

  • Snickel Fritz I just bought a '97 JX 4WD 4AT, and though it's not quite roadworthy yet I am already in awe of it's simplicity and apparent ruggedness. What I am equally in awe of, is the scarcity of not only parts but correct information regarding anything on this platform. I'm going to do my best to get this little donkey back on it's feet, but I wouldn't suggest this as a project vehicle for anyone who doesn't already have several... and a big impressive shop with a full suite of fabrication/machining/welding equipment, and friends with complimentary skillsets, and extra money, and... you get the idea. If you don't, I urge you to read up on the options for replacing anything on these rigs. I didn't read enough before buying, and I have zero of the above suggested prerequisites... so I'm an idiot, don't listen to me. Go buy all of 'em!
  • Bryan Raab Davis I actually did use the P of D trope, but it was only gentle chiding, for I love old British cars of every sort.
  • ScarecrowRepair The 1907 Panic had several causes of increased demand for money:[list][*]The semi-annual shift of money between farms and cities (to buy for planting and selling harvests)[/*][*]Britain and Germany borrowing for their naval arms race[/*][*]San Francisco reconstruction borrowing after the 1906 earthquake and fire[/*][/list]Two things made it worse:[list][*]Idiotic bans on branch banking, which prevented urban, rural, and other state branches from shifting funds to match demands. This same problem made the Great Depression far worse. Canada, which allowed branch banking, had no bank failures; the US had 9000 failures.[/*][*]Idiotic reserve requirements left over from the Civil War which prevented banks from loaning money; they eventually started honoring IOUs illegally and started the recovery.[/*][/list]Been a while since I read up on it, so I may have some of the details wrong. But it was an amazing clusterfart which could have been avoided or at least tamed sooner if states and the feds hadn't been so ham handed.
  • FreedMike Maybe this explains all the “Idiots wrecking exotic cars” YouTube videos.
  • FreedMike Good article! And I salute the author for not using the classic “Lucas - prince of darkness” trope, well earned as it may be. We all know the rap on BL cars, but on the flip side, they’re apparently pretty easy to work on (at least that’s the impression I’ve picked up). On the other hand, check the panel fits on the driver’s and passenger’s doors. Clearly, BL wasn’t much concerned with things like structural integrity when it chopped the roof off a car designed as a coupe.