A UK study claims battery electric vehicles are depreciating so fast that some lose more than half their value in just three years.
The research, commissioned by used car buying service ChooseMyCar.com, claims that BEVs on average will lose 51% of their purchase value from 2020 to 2023, compared to just 37% for gasoline ICE powered vehicles. This equates to an average $18,955 loss for BEV owners, while ICE vehicles lose $12,330 for the same period.
The study used a comparison of new car prices in 2020 against their value now. The 2023 value is based on the average price of cars listed by private sellers or car dealers. It also compared popular car buying websites to look at a buy-it-now price.
Naturally, the higher the original purchase, the bigger the loss, with the Tesla S model losing an average of $31,135 on the UK market in just three years. However, even the entry-level vehicles, such as the Nissan Leaf, are seeing losses of $16,190. In fact, the entry level cars are often seeing larger percentage decreases in their value, with the Hyndai Ionic losing an eye-watering 67% of its worth.
Researchers say this is partly owing to a market correction that has seen new BEVs dropping ticket prices to boost flagging sales. Yet, used car market experts suggest the trend of higher rates of depreciation is expected to continue. BEV’s with the biggest depreciation are:
- Hyundai Ionic -67%
- BMW i3 -64%
- Renault Zoe -61%
- Nissan Leaf -58%
- VW ID.3 -55%
- Tesla model S -46%
- Tesla 3 -43%
Report authors suggested that, in part, the UK’s government grant in 2020 to provide funding of up to 75% towards the cost of installing electric vehicle smart charge points at homes helped incentivize car owners to switch to a BEV. However, these funds pale into insignificance against the thousands of dollars lost in vehicle values.
ChooseMyCar.com founder, Nick Zapolski, said: “Our research shows yet another blow for EV owners, on top of many other issues that have come to light recently. Not only are the EVs themselves not holding value, the price of electricity itself has zoomed up, meaning running the cars is not as economical as it once was. Home charge points are expensive to install (if you even had the necessary driveway to allow that) and there has been uproar about the availability and reliability of public charge points.
“On top of that, recent decisions made by the government mean that some of the initial incentives to encourage EV ownership are being discontinued, such as lower tax and free entry into ULEZ (ultra-low emission zones) areas. The government really needs to take action if it wants to continue to push the idea of EVs onto the consumer, as currently the cons of EV ownership threaten to outweigh the pros.”
— Paul Myles is a seasoned automotive journalist based in Europe. Follow him on Twitter @Paulmyles_