People who have bought an electric car and want to sell it are getting this unpleasant surprise

When analyzing the state of the electric vehicle (EV) market, it is sometimes easy to confuse cause and effect. At first glance, it seems clear that they are the cars of the future, and they’re leading a revolution that will eliminate oil. But just because they’re the cars of the future doesn’t mean they’re a great deal for the people who buy them.

Two recent analyzes demonstrate this. The first of them, carried out by the Iseecars.com website, shows Electric vehicles cost 8 times more than gasoline cars, For example, a Chevrolet Bolt EV loses 30% of its value every 12 months for whoever bought it and wants to sell it. Even brand new Teslas have this problem: The Tesla Model

Is that a lot or a little? A comparative data shows the truth. According to iSeekers, cars – gasoline and electric – depreciate an average of 3.6% each year, which is 8 times less than the depreciation of electric cars above.

As far as the United States is concerned, that’s it. Recent analysis from Auto Trader in the UK indicates that demand for used EVs reached record levels last year, but second-hand prices are falling.

Market analysis indicates that the supply of new electric vehicles exceeds demand from retail buyers, also pointing to a trend: EV buyers turning to the used and second-hand vehicle market due to lower initial costs. Are getting attracted. after all, A new EV is still 36% more expensive than its gasoline or diesel counterpartWhich negates some of the cost benefits of refueling vehicles.

This trend also makes sense if depreciation rates are taken into account. According to Auto Trader, someone spending £50,000 on a new EV could lose £24,000 over three years, compared to £17,000 for a similarly priced conventional car. British buyers prefer to buy second-hand, as it is much cheaper, although their vehicles will lose their value more quickly.

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Why does the value of electric vehicles decrease rapidly?

The key to the decline in price of these vehicles is their batteries, These parts typically last about 10 years, although lithium batteries will degrade more rapidly if charged too frequently, or even if they are left idle for long periods of time when fully charged. For this reason, it is quite possible that the relative decline in remaining EV prices will accelerate over time.

A proportion of the value of a new electric vehicle is determined by its battery, although this is always considered important: There is nothing unusual between 40% and 50%, The good news is that, according to Goldman Sachs forecasts, battery costs will fall by 11% annually through 2030. This is thought to be possible due to a combination of technological innovation and improvements in production due to extremely high potential demand.

Alternatives to lithium-ion batteries have already emerged, particularly sodium-ion batteries, while Chinese manufacturers sell cheap electric vehicles with lithium-iron-phosphate batteries that charge in just 6 minutes.

Another possible reason for the stalling transition to electric vehicles – apart from the general lack of infrastructure and fears about range – is that insurance premiums related to them are rising at a much faster rate than those for gasoline vehicles.

Although they contain very few parts, EVs are packed with advanced technology and parts, making them more expensive to repair or replace in the event of an accident. And if the battery is damaged in that accident, shops are more likely to write off the vehicle due to the value of the battery in relation to the vehicle as well as the safety considerations inherent in damaged lithium-ion units.

Insurers often “err on the side of caution” when deregistering vehicles with damaged batteries that can be repaired, increasing the cost of premiums. The industry is also pressuring insurers to take a more nuanced approach.

But these high costs have already had an impact. Hertz noted the burden of insurance and repair costs earlier this month and announced earlier this year that it would sell 20,000 of its electric vehicles, about a third of the total in the United States, replacing them with gas models. For. Of course, it seems clear that electric cars are the future, but it seems they are not a good deal for their buyers.

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