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I 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

I 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 ago
I 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 ago
  I 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 ago
    Yeah 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 ago
  The 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 ago
    What was the difference in sales price between the two options?
    - CraigJPerry 3y ago
      There'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 ago
  In 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 ago
    Problem 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 ago
  Unfortunately, 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 ago
I 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 ago
  That 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.

I 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 ago

I 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 ago
I 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 ago
  Yeah 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 ago
The 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 ago
  What was the difference in sales price between the two options?
  - CraigJPerry 3y ago
    There'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 ago
In 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 ago
  Problem 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 ago
Unfortunately, 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 ago

I 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 ago
That 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.