With various countries all over the world calling for a ban on diesel and petroleum vehicles by 2035, electric cars are getting popular. While EVs sales have surged in recent years, the resale values of some electric vehicles have declined dramatically when compared to their traditional counterparts. In many respects, electric cars differ from traditional gasoline or diesel vehicles, so it’s common for EV shoppers to be concerned about things like depreciation. As electric vehicle options become more prevalent around the world and new EVs often have a higher price tag, the question becomes: how well can electric vehicles keep their resale value?
Do electric vehicles depreciate faster than gasoline vehicles?
In general, EVs underperform their gas-powered counterparts when it comes of resale value retention. Vehicles retain 60% of their worth after three years of use on average, whereas EVs deteriorate faster and retain only 48.9% of their value after three years or the first 60,000 kilometers.
Nonetheless, the average electric vehicle’s depreciation factor can alter. As there are two additional key factors to consider when determining the value of an electric vehicle. One example is government subsidies that encourage people to buy vehicles, resulting in reduced value depreciation over time. The other factor is the overall cost of EV ownership, which is significantly lower than that of a fuel vehicle.
Furthermore, the residual values varied across EV models. The top-of-the-line EVs made by Mercedes and Tesla, for example, can retain their resale value for a longer period of time than most other electric vehicles. After three years or 60,000 kilometers, these premium brands can preserve 60% of their value. Consumer adaptation for specific EV models, such as the Toyota Prius, also has a higher yield.
What factors influence the resale value of used electric vehicles?
As previously stated, various government subsidies have a significant impact on EV resale values. Because rebates are not a legitimate acquisition cost, they are often deducted from the residual value, resulting in a reduced residual. That means used electric vehicle residuals are likely underestimated, making buying a used electric vehicle very appealing to cars shoppers.
EVs, on the other hand, are more likely to keep their value when demand rises dramatically. With the rapid advancement of EV technology, the early indicators of EV depreciation are unlikely to endure.
There were not enough demand for EVs when they were first introduced to the car industry. The operating ranges of previous EV models were likewise limited, which was a source of frustration for owners of older EVs. While today’s EV vehicles have a range of more than 300 kilometers, they are more likely to retain their value in the resale market today. This also implies that EVs with a longer range are more likely to keep their value. The battery range may be an essential aspect in evaluating the resale value of a used electric car. Reduced battery performance has a direct impact on the resale value of an electric vehicle. While some manufacturers produce superior batteries than the others, an EV’s battery cooling system is also a crucial aspect in maintaining battery performance. Liquid cooling aids in the preservation of battery health, and stronger batteries can expect for a longer range. For example, Tesla’s batteries may retain more than 90% of their full capacity after 320,000 kilometers of driving, meaning that battery degradation is less of a concern, which is one of reasons that a used Tesla has a higher resale value.
What are the top five EVs hold their resale value?
If you’re in the market for a new electric vehicle, you’re definitely looking for one with high residual values. The top five EVs that retain their value are listed below, with the percentage of value lost after three years or 36,000 kilometres in brackets.
The Porsche Taycan is now the electric vehicle with the least depreciation, losing only 37.1% of its value in three years or 36,000 kilometres. The Taycan is a fast EV with a range of up to 434 kilometers battery range.
Model 3 Tesla
All Tesla lineup retain their value quite well, and the Model 3 is now the best in the brand’s lineup in terms of depreciation. The Model 3 is also the most affordable vehicle on our list. The Model 3 Long Range can travel 458 kilometers on a single charge, and losing only 40% of its value over three years.
Tesla Model X
Another Tesla lineup that depreciate slowly at only 41%, The Tesla Model X is a huge SUV at the top of Tesla’s current lineup, and it’s also holding good resale value. The Long Range model offers an all-electric range of 475 kilometers and a spacious interior configuration with seven seats.
The Polestar 2, is a Volvo-affiliated brand that only produces electric vehicles, it’s also the brand’s only stand-alone car at the present, is a smart-looking EV with a range of 394 kilometers. It keeps its value pretty well at 41.8%. This is another evident that high-end electric vehicles are slow depreciators.
Tesla Model S
The Model S was Tesla’s first success story, so it’s not surprise to see it’s still steadily depreciating, which is at 43%. It’s easy to see why it’s so popular with a range of 678 kilometres on a single charge. It’s a huge EV with plenty of interior space, a substantial boot, and plenty of power.
What comes next?
Electric vehicles are already a tempting option for car owners due to their lower operating costs. Another advantage of EV ownership is the low cost of maintenance and fuel. In fact, electric and hybrid vehicles have less wear and tear. Because of the regenerative braking mechanism, which lowers the need to change brakes, as well as the fact that EVs have less moving parts in the motor. All of these aspects contribute to significant cost reductions while operating an EV.
With rising demand, longer battery life, and technological advancements. In the near future, electric vehicles will become increasingly competitive in terms of resale value. Meanwhile, used electric vehicle buyers might find some excellent EV offers among the numerous models available at the Canadian used car market.
It is believed that the lower operating costs make EVs become a more desirable choice for Canadian car shopper. However, guessing what a used electric vehicle will be worth in three years is filled with variables and maybe fraught. Only one thing is certain: if it says Tesla on the back, it will almost certainly they will be worth more at trade-in than any other electric vehicle.
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