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Electric cars suffer 'unsustainable' depreciation in secondhand market
- xbmcuser 3y agoI don't see how electric cars can maintain prices in the second hand market when the most expensive part the battery which is 40-50% of the cost. Is cheaper to produce 10% a year on avg.
- DoingIsLearning 3y agoI think the business model will have to change for this barrier to disappear. Most likely in the future you will buy or lease the car. But you will never buy the battery only lease it. When the battery is fubar the manufacturer will recycle or resell for utility storage and replaces your battery pack. Much like Auto companies went into Financing business to boost sales they will likely go into Battery management businesses to boost sales. I can't see another way for long term.
- zelos 3y agoI don't think the parent is making a point about battery degradation, more that EV technology is advancing much faster than ICE. It's not 10% cheaper to make a petrol engine every year, after all.
- xbmcuser 3y agoYeah thats my point. A new ev 5 years from now would cost 75% of what a new ev cost today anyway so 2nd hand ev will have a price pressure from new ev. We are I estimate 7-10 years from when batteries become such small percentage of ev cost to not matter. When you add 10% cost decline for solar electricity every year I think a lot of ice enthusiasts, politicians and car manufacturers haven't realised the hammer that is coming for them.
- CraigJPerry 3y agoThe original Nissan leaf was launched in the Uk with this model as a choice. I.e. you could buy car + battery or you could buy car for less and lease the battery for 10 years iirc. The cars purchased on that lease model were punished in their resale values in the Uk, to the point that Nissan discontinued the program.
- magicalhippo 3y agoWhat was the difference in sales price between the two options?
- CraigJPerry 3y agoThere's a decent summary table at the bottom of https://www.fleetnews.co.uk/news/2013/4/11/nissan-to-offer-battery-lease-option-on-leaf/46747/ https://www.fleetnews.co.uk/news/2013/4/11/nissan-to-offer-b...
- mmikeff 3y agoIn Europe, Renault sold the Zoe and others on a battery lease basis, reducing the vehicle cost but with a recurring lease on the battery. For me, as a used car buyer who wants to buy a car outright (not on finance) that rules it out. I don't want to commit to paying Renault monthly to lease a battery at a price that is more than I currently spend on petrol. To be fair, that is not very logical on my part, it does not make financial sense for me to go electric as I do so few miles.
- WirelessGigabit 3y agoProblem with leasing a battery is that the company defining acceptable mileage / show battery % is also the same company trying to maximize income. The longer they can charge you with the same battery the more money they make. Kinda like iPhones and their battery level when you get AppleCare. If it drops below 80% in the first 2 years you get a new one for free.
- shoo_pl 3y agoUnfortunately, its not that simple. From the car company perspective, all they want is to sell new cars and they are perfectly happy with scrapping the 8-years old EV with damaged battery. Also, people keep talking about converting batteries to home energy storage but its not that simple to do on your own - in fact its borderline dangerous to do so on your own due to hundreds tricky mistakes you can make that will end up with fire completely burning your home. This will only make sense at industrial scale but that also means it wont be too cheap anymore (not to mention those 8-years old cars which are in good condition, just missing battery that is more expensive than new car). Also, I do think people are scared way too much by those dying batteries. Some of them will fails, sure, but there are so many gasoline cars with engines which have like 50% failire rate between 90k-180k miles driven. That's also pretty expensive to fix where often the only choice is to buy another engine from crashed car. I assume it might be similar here - 20-30% batteries will fail soon after the 8y warranty and will be replaced by batteries from crashed cars, the rest will work just fine for 15+y I own Mach-E EV and I am scared. It's a great car, I love it but looking at what tesla is doing to the EV market - both new and used - I can't even fantom how it will look in a few years.
- vdaea 3y ago"You will own nothing and you will be happy"
- eisfresser 3y agoI agree that there is a lot of uncertainty about the longevity of batteries. However, it seems to me that the extra depreciation is driven by price cuts of new electric cars. The article mentions an "electric car could expect to lose £24,000 in value over three years, while a similarly priced petrol car could lose £17,000" - Naturally, given that the sales price of the EV came down by £7,000 last year alone (i.e. Tesla Y).
- Mountain_Skies 3y agoThat might explain why the low end of the market still seems to overvalue used EVs. I've seen many Nissan Leafs with batteries in terrible shape, maxing out at 30-40 mile range, hold their value. Without much in the way of price reductions for newer models at the low end, the used market doesn't need to compete the same way the high end market does. Edit: this is in the US. Other comments seem to indicate the opposite in the UK.
- draugadrotten 3y agoIf the car companies offered "good-battery-as-a-service" for a fixed monthly cost, it would scare me less than the prospect of having to buy a new battery for 20K.
- zelos 3y agoRenault tried that with the Zoe, but they've abandoned it now. As I understand it, battery degradation has been less than even the automakers were predicting.
- nebula8804 3y agoThis sounds like a temporary blip, Where are these cheap cars? I wanna see 15k used cars in decent shape. How much of this is driven by compliance cars finally reaching the point where few really want them + early models being unreliable?
- bb123 3y agoThey're out there, but they often don't come with a desirable badge. Check this out as an example: https://www.autotrader.co.uk/car-details/202311013531800 https://www.autotrader.co.uk/car-details/202311013531800 The car is almost brand new, has a realistic 180-200 mile range and a wealth of features. Total cost 12k.
- mmikeff 3y agoI can only read the first sentence of that article without signing up, but can attest that in my current car search I am looking at used electric vehicles that have lost two thirds of their value in 3-4 years.
- alkonaut 3y agoI see the entire article at first (or when reloading). Directly entering reader mode in the browser prevents it from switching to the sign up page.
- avtolik 3y agoI was looking recently at the German second hand market. My rough estimate was that Teslas lose about 50% of the value at year 4.
- xur17 3y agoWhat brands are you looking at? I've been looking at Tesla cars, but they honestly don't seem to have depreciated as much as I would have expected / hoped.
- mmikeff 3y agoCurrently looking at Jaguar I Pace. There are quite a lot in the £20-25k range with <60k miles that would have been about £65k new. I'd happily look at a Model Y, but out of my budget
- kreetx 3y agoAny non-paywalled version of this? My thoughts: - though the seller, of course, suffers, but isn't it good for both buyers and also to the transition to EVs? - also wonder if the (higher) price drop is due to the current EV fleet being mostly premium cars, as any Tesla above Model 3 is.
- Turskarama 3y agoThat's a good point, the depreciation is high but so is the depreciation on a BMW or Mercedes.
- stuaxo 3y agoThe Telegraph has a particular view and this fits right in. Still, manufacturers need to make it easy to swap out batteries.
- alkonaut 3y agoModels are new, and some manufacturers are unknown to the buyers. Used batteries are an unknown. That means the difference between buying a new car and a used one is bigger in terms of the percieved value to the buyer. If I buy a new ICE car I pay a premium of $5-10k for having the benefit of owning it the first couple of years with hall the warranties. It's peace of mind at a reasonable cost. The cost of that benefit is going to be bigger both in absolute (because of the higher price) and relative terms for BEVs for the foreseeable future. Especially for newer brands like the new chinese players, but also for Tesla which is still young.
- euroderf 3y ago> Used batteries are an unknown. Indeed! Are there any features in any electric cars that provide on-demand a detailed description of the state of the currently installed battery ?
- nebula8804 3y agoThere is an Android(maybe iPhone also) app that can plug into some EV car's computer and display detailed battery info.
- dzhiurgis 3y agoYou can run a benchmark on tesla that will do full discharge/charge cycle.
- euroderf 3y agoAnd what about competing brands?, he asked.
- bb123 3y agoWorth mentioning that The Telegraph (also known as the Torygraph) is a zealously anti-EV newspaper. They have a strong conservative bias and routinely publish borderline fake news regarding EVs.
- mmikeff 3y agoIf you have had the misfortune to open the default homepage in MS Edge recently, it is routinely a smorgasbord of anti EV rhetoric from the likes of the Telegraph, Express and Mail. Someone somewhere is spending a lot of money on promoting those views to the sort of people who don't change their browser or their homepage.
- toyg 3y agoThe Conservative Party recently shifted very hard as anti-green and pro-ICE, after one candidate unexpectedly managed to win a race on those issues in London. It's basicaslly their only hope to not be wiped out at the next General Election this year. Coincidence? I think not.
- nebula8804 3y ago>Someone somewhere is spending a lot of money on promoting those views to the sort of people who don't change their browser or their homepage. The thing about these people is they really don't matter. They are on deaths door anyway and pretty soon they won't be part of the conversation. The important people are the young car buyers of tomorrow. They seem to be quite fond of Tesla and EVs in general.
- mmikeff 3y agoWhether or not you think they matter, they vote, and in larger numbers than the younger electorate.
- nebula8804 3y agoThats my point. Yes I acknowledge that they affect today. But they will not affect tomorrow and thats where the thinking should really be because tomorrow is coming really fast! some portion of Millennials are in their 40s now. The future is definitely EV (and because they still haven't achieved their parents level of status likely left leaning as well)
- ggm 3y agoBattery swap would be a reverse Gresham's law: bad batteries would get withdrawn from service and repacked to maximise range profit. EV should be redesigned around a common core swappable battery technology. As new battery chemistry comes online make it form factor and plug compatible.
- penjelly 3y agoswappable batteries is something NIO does, but agreed it not widespread. Tesla wanted to this at one point but they cancelled the idea. not sure why
- ggm 3y agoIt wasn't going to make tesla a competitive advantage the way integrated battery has.
- penjelly 3y agoi dont follow, how would it be different? would you mind helping me understand why a swappable battery is different? My impression was they would be the same in actual function
- ggm 3y agoIt would sell competitor product to conform. It's build a bigger market logic, but despite Musk patent stance he actually does want to own the business as well as grow the business. It would have eroded his competitive advantage since he had a car which had 2x the range of his competitors. It would have set logistic constraints and limit his innovation. You can't build cells into the structural frame if you go with a removable pack. It would have meant building an economy around pack recharge which is a large initial capital cost. It would have meant developing and commercialising robotics beyond the capabilities of the time to do autoswap.
- magicalhippo 3y ago> EV should be redesigned around a common core swappable battery technology. I don't think this is very feasible. Different battery chemistries inherently have different voltages and densities. So switching battery chemistry might require electronics with a higher voltage rating. And you can't swap in a battery with a very different weight, not just due to suspension but also structure and breaks if the battery is much heavier. This is the case for the BMW i3 where the 94Ah model can get upgraded to the new 120Ah battery because it was designed with a sturdier frame, but the pre-94Ah models can't because they lack the sturdy frame. And there might be additional concerns like different cooling requirements etc.
- warrenmiller 3y agoI've noticed a lot of FUD recently with electric cars - a lot of it coming from the same sources. If I was more suspicious person I would say it's planned rhetoric.
- warrenmiller 3y agoThe other way to read this is "Hooray! second hand electric cars are a bargain" :)
- zihotki 3y agoThat's until you see the price of replacing a battery
- neilalexander 3y agoThere's plenty of data now from Nissan, Tesla and others showing that 10 year old EVs still often have at least 80% of their original battery capacity. Needing to replace the battery is not a given.
- mmikeff 3y agoRight now, looking at buying a used EV, I am more scared that the battery or electrics fail for some reason than I am of their gradual degradation over time. I don't know how likely that is, but it's putting me off anything other than manufacturer approved used with a solid warranty.
- timbit42 3y agoGet an ODB2 reader and check the battery condition before you buy.
- CraigJPerry 3y agoAll 2nd hand cars in the UK are currently depressed. Battery 2nd hand have been depressed even during autumn 2022 when 1 year waiting lists for new models (combustion or ev) weren’t unheard of. For example, a 3 year old Nissan leaf with higher mileage could be had for £15k during that time. A 3 year old higher mileage goes for £7.5k today. The model in question was circa £30k new. If you’re in the market for an EV in the UK, today your money goes quite a bit further 2nd hand than you might expect. Low mileage Porsche Taycan Performance Pro’s (the 100+ kWh pack) are hovering around 50k at 2-3 years old. More than 60% depreciation. Mercedes EQC market has been flooded for some reason, you can get a new lease (personal) for under £300/mo on a 3 month upfront/8k miles. Second hand these are trading similarly down like the Taycan. You’d have to be mad to buy any of these new. A realistically priced lease would be the way to go if you want new but 2nd hand nearly new seems the better choice if you’re willing to wear the risk that these cars don’t have a floor (seems unlikely, even in basket-case-onomics uk 2nd hand car market)
- bb123 3y agoThe Corsa-e/e208 is also a shockingly good deal - you can pick a 2 year old one up with <20k miles for 10-12k.
- CraigJPerry 3y agoI think that same powertrain is being used across many vehicles - even a full size van. Maybe that will mean cheaper battery replacement in future if there's such a common market for these?
- tomxor 3y ago> You’d have to be mad to buy any of these new. I think the opposite. I've always bought 2nd hand ICE cars in the UK, as the vast majority of people do. Each one between 8 and 20 years old, each perfectly usable reliable cars. I've looked at the prospect of 2nd hand EVs here and you see most stuff around the 10 year mark the range is in the toilet and a non starter as a main car. Even though the battery tech has improved, it's still on a clock... so even when eyeballing EVs in the ~5 year old bracket, they may be slightly better, but you still have to consider that in another 5 years it's basically going to be unusable and unsellable. If new EVs get cheap enough (and I mean real cheap to compete with what we are used to in the old and entirely functional 2nd hand ICE market), only then does make any financial sense to most people, they are still not ready for the masses. Either the battery technology has to vastly improve in longevity or some reclaimability of value, or the cost of new one's needs to plummet.
- bb123 3y agoThis does mean if you're in the market for a used EV you can get a staggeringly good deal at the moment. Take this as an example: https://www.autotrader.co.uk/car-details/202311013531800 https://www.autotrader.co.uk/car-details/202311013531800 The car is almost brand new, has a realistic 180-200 mile range and a wealth of features. Total cost 12k. It is in warranty for another 60k miles. This has got to be the cheapest way to get hold of a 50kWh battery right now. It would almost be worth working out how to buy one of these just to pull the battery out of it.
- wkjagt 3y agoI can’t read the whole article because of the paywall, so I don’t know if it’s mentioned, but I guess a large factor is also subsidies. If you buy an electric car in Canada (where I am) you get a 7k$ subsidy, but only on new cars, which makes used electric cars less interesting. I actually bought a used electric car last week for what I think is a very reasonable price. But the biggest advantage I see in buying a used one is that I can skip the multi-year waiting list.
- cracrecry 3y agoOh what a tragedy! It looks as a consumer the worst thing that could happen to you is that you go to buy something and it is cheaper! It undermines consumer confidence!! Seriously I do not understand why people feed their brain with (mis)information given by obvious antiEV zealots. Prices went so high, they do correct. This is good for consumers. Some media are not your friends, they were sold to owners with obvious agendas. It could be "EV are the best"(so our boss could make lots of money selling "clean energy" to the Government, or "EV are the worst"(so our car manufacturer or Tesla short seller owner is happy).
- refurb 3y agoYou're missing the point. It's cheaper because there is a lack in consumer confidence in used EVs. And that can impact the new market as well - people won't buy a new EV if they're going to take a 60% depreciation hit versus 30% on a similar gas vehicle.
- zelos 3y agoI don't see any evidence in the linked article that it's due to a lack of confidence? Could it not be issues like (for example), new models being released at lower price points with better range?
- whatever1 3y agoThe progress in the sector is just explonential at this point. We are at the same stage as smartphones back in 2010. A year old smartphone was very outdated and hence worthless. Nowadays you can sport the same phone for 3-5 years without missing out anything important.
- guappa 3y ago> Nowadays you can sport the same phone for 3-5 years without missing out anything important. But the non-swappable batteries create a need to buy a new phone anyway.
- galeos 3y agoIn the UK the tax incentives for Electric cars may be skewing demand towards new Vs secondhand EVs. I can lease a new EV via my employer's salary sacrifice scheme. I can pay my lease payments from my pre-tax income. There is an additional tax due on cars leased this way in the UK called Benefit-in-Kind tax (BIK). The rate of this tax is fairly high for petrol/diesel cars but for EVs is currently near zero (based on 2% of the car's value). The problem is that most of the major lease firms that operate these programs for employers only offer new vehicles. Ideally I would like a nearly-new EV. I have escalated and apparently our lease provider (Tusker) are looking at rolling this out in the first half of this year. I currently know of only one other lease firm that offers this option. I suspect is in the interest of lease firms to prop up the value of the used EV market, but this depends also on their margins on new vehicles. I wonder if it would make sense for the tax incentives for used Vs new EVs to be rejigged to avoid incentivising unnecessary new car production?
- boffinAudio 3y agoI recently converted to electric motorbike for my transportation needs, and I don't see this reduction in value occurring in that segment, at all. In fact, my bike (Bonfire X) has increased in value, since there are battery and motor upgrades available now to make it an even more capable machine. The idea of getting a battery upgrade this year, and thus more power and range, is so appealing. Maybe that's not something thats too viable in automotive products, but for motorbikes it is a true sweet spot. I imagine I've got years of upgrades ahead of me.
- cjs_ac 3y agoA lot of interesting comments here about the technology and the bias of the Torygraph, but there's also a fundamental reality of car ownership in the UK to take into account. The overwhelming majority of the UK's housing stock predates widespread car ownership. There are entire streets of Victorian houses with paved-over front gardens because without that, the residents wouldn't be able to park their cars. Even the post-war New Towns gave fewer than one off-street parking space per house. Parking on the street is not a casual undertaking, either: houses are frequently only as wide as a car is long, so you get just one on-street parking space per house. The recently-built housing estates often have small car parks near clusters of houses rather than a dedicated parking space right next to the house, and for the houses that do have a garage, garages are built to a standard size from the 1930s, so you can't fit a modern car in it, it's just a storage room. If you're well off, none of this is a problem:you have a large garden, with a custom built garage that actually fits a car, but there's only so many such people. The consequence of all this is that there's only so many people who can instal an EV charger at their home. Only so many of those people want an EV at this time. Our housing stock has imposed a limit on the adoption of EVs.
- kcartlidge 3y ago> small car parks near clusters of houses This is us. We own two spaces but there's another house between ours and the car park. In front we have a footpath, not a road. Realistically, home charging is out.
- thebruce87m 3y agoAnother EV hit piece. From the article: > Electric cars lose as much as half of their value after just three years on the road https://motorway.co.uk/sell-my-car/guides/car-depreciation-guide https://motorway.co.uk/sell-my-car/guides/car-depreciation-g... > The average car depreciation will hit hardest in the first year of ownership. Generally, the drop will be around 15-35% in the first 12 months. And that will continue to rise up to 50% or more over three years. Year 1: 15-35% depreciation. 65-85% of the original value. Year 3: 40-60% depreciation. 40-65% of the original value. Year 5: 60-70% depreciation. 30-40% of the original value. Year 8-10: 80% depreciation. 20% of the original value. Oh no, standard depreciation within the expected range! How will we cope? > Research from Auto Trader said there were “unsustainable levels of depreciation” in the electric car market, with used prices of battery-powered vehicles dropping by 23pc in the last year alone. Is this because some of them are new models, and the average age is increasing? One article like this made mention of the Model X as one of the highest depreciation. It’s basically no longer sold in the UK (you can get one but the steering wheel is on the wrong side) so therefore the only cars on the market are getting older with no new ones to keep the price up. > Campaigners have said motorists will continue to find electric cars too expensive without government subsidies, which ended in 2022, or other incentives such as cuts to VAT. So which is it? Too expensive or too cheap?
- nkurz 3y agohttps://archive.ph/8rR0f https://archive.ph/8rR0f
- beej71 3y agoMaybe I _will_ buy an EV. Except despite this depreciation they are still tremendously expensive around here.