EVs Are Losing Up to 50 Percent of Their Value in One Year

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The British Vehicle Rental & Leasing Association (BVRLA) warned that so-called fleet operators, such as car leasing firms and rental companies, are having to swallow large losses when reselling EVs because of “accelerated, exceptional depreciation”.

In most cases, these companies buy new cars and own them for three years before selling them.

Consumers who lease cars during these three-year periods effectively cover the value of losses through monthly payments, which are calculated based on estimates of how much a vehicle is expected to depreciate.

But in the past two years, the typical amount of “residual value” left over at the end of a car’s lease has plunged from 60% to 35%, the BVRLA said.

This means a car worth £50,000 when new will now drop to £17,500 in value over three years, instead of £30,000.

This leaves leasing companies facing unexpected losses.

Gerry Keaney, Chief Executive of the BVRLA, has warned the trend is “not sustainable”.

Speaking at an event in Parliament on Tuesday, he said: “The reality is that EV residual values in the last two years have dropped by 50%.

“That is the evidence of the accelerated depreciation write-off that we’ve seen. And again, when we look forward two years, the rate of used EVs coming back to the market is about to double.”

Worth reading in full.

EVs Are Losing Up to 50 Percent of Their Value in One Year

Some electric car brands are hemorrhaging value, with the worst losing as much as $600 a day. In this investigation, WIRED outlines which models to watch, why this is happening, and how you can game the market to your advantage.

Cars losing you a chunk of cash the instant they’re driven off the dealer lot is nothing new, especially at the pricier end of the market. And if you intend to keep your shiny new EV for a long time, then its worth after just a year or two matters far less.

But what if you’ve experimented with your first EV then decided its range or your local charging infrastructure isn’t up to scratch, and want to sell within the first year? If that’s you, you’d better be prepared for a significant loss.

We are using two tools for this research. The first is an online appraisal system by Edmunds, the US automotive industry resource, and the second is Cap HPI, a vehicle valuation service for the UK auto trade. Let’s start with the UK electric trade-in landscape, then compare it with the US’s.

Our first discovery was that, in the UK, various new electric cars lose 50 percent of their value in the first 12 months. Yes, you read that right—some EVs depreciate by 50 percent in a single year.

Now, this cannot be said of every EV, but Cap HPI data provided to WIRED by Parkers, a respected UK online car resource, revealed how six different EVs are all projected to halve in value after 12 months and 10,000 miles.

https://www.wired.com/story/evs-are-losing-up-to-50-percent-of-their-value-in-one-year/