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Electric vehicle depreciation is a hot topic at the moment, and for good reason. On the one hand, there are some fantastic deals on the second-hand market, but on the other, of course, there is the thorny issue that some EVs are losing value. half of its value in a single year.
It’s nothing new for cars to cost you a lot of money as soon as they leave the dealership, especially at the more expensive end of the market. And if you intend to keep your shiny new EV for a long time, its value after a year or two matters a lot less. But what if you’ve tried out your first EV and then decided its range or local charging infrastructure isn’t up to par and you want to sell it within the first year? If that’s the case for you, you’d better be prepared for a significant loss.
In an attempt not to lump all EVs together, we have tried to be balanced in our approach to uncovering used vehicle valuations. There is plenty of colour to tell here too, such as the US dealer who actively warned our reporter not to sell him his EV, or the story of a Mercedes EQE that lost over $600. Daily—But for now let me give you the cold, hard numbers.
For this research we used two tools. The first is an online assessment system Edmundsthe resource of the US auto industry, and the second is Return on equity indexa vehicle valuation service for the UK car trade. Let’s start with the EV trade-in landscape in the UK and then compare it to the US.
Main offenders
Our first discovery was that in the UK, several new electric cars lose 50 per cent of their value in the first 12 months. Yes, you read that right: some electric vehicles depreciate by 50 per cent in just one year.
Now, this can’t be said for all electric vehicles, but Cap HPI data provided to WIRED by ParkerA respected UK online car resource, revealed that six different electric vehicles are predicted to lose half their value after 12 months and 10,000 miles. These include the Audi e-Tron GT, which saw its price plummet by 49 per cent from £107,675 ($138,000) to £54,700 ($70,100), and the Ford Mustang Mach-E, which fell by 52 per cent from £59,325 ($59,325) to £28,575 ($28,575). A Polestar 2 would also lose 52 per cent of its £52,895 ($52,895) asking price in just 12 months, the data said.
The Tesla Model 3 fared only slightly better, down 45 percent in its first 12 months and 10,000 miles, while the Porsche Taycan fell 49 percent and the Hyundai Ioniq 5 lost exactly half that over the same period. All of these prices are based on a mid-range version of each car, as factors like battery size, trim level and even paint color can have a marked effect on trade-in value.
Miley’s face
But you know what has less of an impact on depreciation? Mileage. If the Polestar 2 Long Range mentioned above had travelled 32,000 kilometres in its first year instead of 16,000 (well above the UK annual average of just 12,000), its estimated resale value drops by just £975 more, or 2 per cent more than its original price.
The Taycan’s story is similar. A 4S model with the long-range battery dropped from £100,200 to £50,700 in its first 12 months and 10,000 miles. But if it had done 20,000 miles in the same year, it would have dropped by just another £2,650. Or, after two years and 20,000 miles, it would be worth £44,175, according to Cap HPI data. Age (beyond the first 12 months) has a similarly negligible effect. A Taycan with 10,000 miles is worth £50,700 after one year, or £46,600 after two years.
YouTuber The MacMaster has been tracking the declining value of his own two-year-old Taycan, which went from a new price of £120,000 to a Porsche dealer valuation of £44,650 in March this year, leaving him with negative equity as he still owes approximately £64,700 on the EV. To make matters worse, the Porsche dealer who gave the valuation reportedly refused to take back his Taycan.
Remember that these are all estimated trade-in values. You would expect to earn more if you sold the car privately and you would see a dealer advertising the same car for more money to ensure they make a profit.
Tesla Model 3 depreciation also slows significantly after the first year. Cap HPI data indicates that a 2023 Model 3 Long Range would fall from £50,000 to £27,550 after one year and 10,000 miles, and then just £2,500 more after two years and 20,000 miles. If the first 10,000 miles had been spread over 18 months instead of 12, the price would have only fallen by a further £825 over those six months.
The ability of Tesla and other EV makers to update and improve a vehicle’s software months or even years after it’s left the factory should help with long-term depreciation. We’ve seen how Tesla can roll out major UI updates and even add entirely new features over the air. In 2019, Jaguar released a software update that claimed to increase the range of its I-Pace by up to 8 percent, and in 2022 the Polestar 2 gained Apple CarPlay (a feature that manufacturers used to charge handsomely for) via a free OTA update.
Electric vehicles vs. internal combustion engine vehicles
As we’ve said before, steep first-day depreciation has been a regular occurrence in the lives of car owners. But how do one-year-old EVs compare to similar internal combustion cars? And more specifically, what happens when you compare two similarly sized and priced cars from the same manufacturer? Cap HPI data has the answers, and once again, the results are better understood.
When comparing a gas-powered Audi Q7 55 to an electric Audi e-tron 55 SUV, both one year old and with 10,000 miles, the gas-powered car is worth 42 percent more after 12 months, despite costing less when new.
This is also true for lower-value cars. Cap HPI data shows that after three years and 30,000 miles, a gasoline-powered Volkswagen Golf is 46 percent more expensive than an electric Golf.
We expected to find a similar difference between the petrol-powered Porsche Panamera and the electric Porsche Taycan. However, Cap HPI data suggests that the mid-level 4S variants of each lose a similar amount of value over two years and 20,000 miles. The Panamera dropped from £93,140 to £63,250, while the Taycan dropped from £84,030 to £53,000.
Auto America
Now, as for U.S. pricing, according to Edmunds, a 2022 Porsche Taycan Turbo with 10,000 miles (well below the U.S. annual average of 14,000) was worth about $106,000 as of this writing in July 2024. That’s about $50,000 below what it would have cost new, not including optional extras, which increase the retail price but tend not to affect resale value.
Historical data compiled by Edmunds shows how the car’s value briefly rose from $129,000 to nearly $131,000 between August and October 2023, but has fallen noticeably since then, dropping as much as $4,000 per month between November 2023 and February 2024 before falling another $10,000 over the next five months.