EV Resale Values Are a Mystery

Have you ever thought about the resale value of electric vehicles? I admit I haven't thought about it as much as I probably should have. Apparently, I am not the only one who is a bit clueless about it -- it's a market mystery.

The reason for this is pretty simple -- there's just not enough data yet. This makes sense -- while the share of the market held by EVs is growing, it's still small. As time goes on, of course, more EVs that were new yesterday will be hitting the used-car market, and that will help us gain some information. Outside factors, such as the state of EV infrastructure, also play a part.

Up until recently, the biggest data point was Tesla, since it only sells EVs. But Tesla's, um, unusual behavior as a car company has made things trickier. Teslas were depreciating at only about 4 percent until the company slashed prices on new cars. Perhaps predictably, the price cuts caused the price of used Teslas to drop.

There are other factors at play. Mileage, for example, matters greatly when it comes to internal-combustion engines. It's not clear yet how it affects batteries and electric motors.

Furthermore, more than three-quarters of EV sales last quarter were for cars that are considered luxury vehicles. But more and more affordable EVs are hitting the market as time marches on.

In addition to that, the data we do have from older EVs may not tell us much, thanks to major improvements in technology.

Finally, there's the effect of tax credits.

Experts suggest that new-car buyers looking at an EV ask about how the car, and its battery, will be used so that they can get an idea of what the resale value will be. For example, was it driven a lot in winter weather? How often was it fast-charged? And more.

Knowing those answers will help them get a sense of what the resale value should be.

[Image: Ford]

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