Depreciation of electric vehicles Electric cars are a bit of a hot topic right now, and for good reason: on the one hand there are fantastic bargains to be had on the used car market, but of course there’s also the pesky issue that some electric cars are losing value. half Its value will double in a year.
It’s not uncommon for cars to lose a lot of money the moment they leave the dealer’s lot, especially at the higher end of the market. And if you plan to keep your shiny new EV for a long time, it’s no big deal if it loses value in a year or two. But what if you try out your first EV, decide its range or local charging infrastructure isn’t up to snuff, and you want to sell it within a year? If so, prepare to take a big loss.
So as not to tarnish all EVs with the same brush, we aimed for a balanced approach to trade-in value discovery. Again, there’s plenty of color to report, including the story of a US dealer who actively warned our reporter not to sell him an EV, and a Mercedes EQE that cost him over $600. every day—But for now, let me give you the cold hard numbers.
The study uses two tools: the first is the online valuation system from Edmunds, a resource for the US automotive industry, and the second is Cap HPI, a vehicle valuation service for the UK car trade. Let’s start with the UK electric vehicle trade-in landscape and compare it to the US.
Main offenders
The first thing we discovered was that in the UK a range of new electric cars lose 50 per cent of their value in the first 12 months. Yes, that’s right – some electric cars can lose as much as 50 per cent of their value in a year.
While this isn’t true for all EVs, Cap HPI data provided to WIRED by Parkers, a respected British online automotive information site, predicts that all six EVs will lose half their value after 12 months and 10,000 miles. This includes the Audi e-Tron GT, which plummeted 49 percent from £107,675 ($138,000) to £54,700 ($70,100), and the Ford Mustang Mach-E, which fell 52 percent from £59,325 to £28,575. The Polestar 2 will also lose 52 percent of its £52,895 list price in just 12 months, according to the data.
The Tesla Model 3 fared only slightly better, dropping 45 percent over the first 12 months and 10,000 miles, while the Porsche Taycan fell 49 percent and the Hyundai Ioniq 5 fell exactly half in the same period. All of these prices are based on the mid-size version of each car, as factors like battery size, trim level, and even paint color can have a noticeable effect on trade-in value.
Miley Face
But you know what has less of an impact on depreciation? Mileage. If that long-range Polestar 2 mentioned above had done 20,000 miles in the first year instead of 10,000 (well above the UK average of 7,000 miles per year), its estimated trade-in value would be down by just £975, or a further 2 per cent on the original price.
It’s similar with the Taycan: a 4S model with an extended range battery dropped in value from £100,200 to £50,700 after the first 12 months and 10,000 miles. But had it done 20,000 miles in the same year, it would have only lost a further £2,650. Or, according to Cap HPI data, after two years and 20,000 miles, its value would be £44,175. Age (beyond the first 12 months) has a similarly small effect: a Taycan with 10,000 miles would be worth £50,700 after one year and £46,600 after two years.
YouTuber The McMaster has documented the decline in value of his Taycan, which he bought two years ago. In March this year, it fell from a new price of £120,000 to a Porsche dealer’s valuation of £44,650, putting him in a negative equity position with around £64,700 owed on the EV. To make matters worse, the Porsche dealer who offered him that valuation allegedly refused to take the car.
Remember, these are all estimated trade-in values. You can expect to make more money selling your car privately, and dealers will likely advertise the same car at a higher price to ensure a profit.
Depreciation on the Tesla Model 3 also slows significantly after year one. According to Cap HPI data, a 2023 Model 3 Long Range drops from £50,000 to £27,550 after one year and 10,000 miles, and only drops a further £2,500 after two years and 20,000 miles. If the first 10,000 miles were spread over 18 months instead of 12, the price would only drop a further £825 in those six months.
The ability for Tesla and other EV makers to update and upgrade their cars’ software months or even years after they leave the factory should help with long-term depreciation. We’ve seen how Tesla delivers major user interface upgrades over the air and adds entirely new features. In 2019, Jaguar delivered a software update it claimed would increase the I-Pace’s range by up to 8%, and in 2022 the Polestar 2 will gain Apple CarPlay (a feature for which manufacturers used to charge a high fee) via a free OTA update.
EV vs ICE
As mentioned earlier, significant depreciation from day one has long been a part of car ownership. But how does a one-year-old electric car compare to a similar internal combustion engine vehicle? And more specifically, how does it compare when you compare two cars of similar size and price from the same manufacturer? The Cap HPI data has the answer, and again, it’s best to sit back and take a look.
Comparing a petrol-powered Audi Q7 55 and an electric Audi e-tron 55 SUV, both purchased a year ago with 10,000 miles on the clock, the petrol-powered car was worth 42 per cent more after 12 months, despite the petrol-powered car being cheaper when new.
This applies even to lower-priced cars: After three years and 30,000 miles, a gasoline-powered Volkswagen Golf is 46 percent more expensive than an electric Golf, according to Cap HPI data.
We’d expected to see a similar difference between the petrol-powered Porsche Panamera and the electric Porsche Taycan, but Cap HPI data shows that similar mid-range 4S models have lost a similar amount of value after two years and 20,000 miles, with the Panamera dropping from £93,140 to £63,250 and the Taycan dropping from £84,030 to £53,000.
Auto America
Now, regarding US prices: According to Edmunds, a 2022 Porsche Taycan Turbo with 10,000 miles on the clock (well below the US average of 14,000 miles per year) is worth about $106,000 as of this writing (July 2024). That’s about $50,000 less than the price of a new car, excluding options that tend to drive up the retail price but not affect resale value.
Historical data compiled by Edmunds shows that the car’s value briefly rose to between $129,000 and nearly $131,000 between August and October 2023, but then dropped significantly, dropping by $4,000 per month from November 2023 to February 2024, before dropping another $10,000 over the next five months.