Why Used EV Values Are Dropping Like Crazy!

Introduction

This tutorial explores the phenomenon of depreciation in electric vehicles (EVs), particularly focusing on why their values are dropping significantly within the first year of ownership. By understanding the factors contributing to this trend, you can make more informed decisions whether you're buying, selling, or simply interested in the EV market.

Step 1: Understand Depreciation

• What is Depreciation: Depreciation refers to the loss of value of a vehicle over time. Every car depreciates as soon as it is driven off the lot, but EVs tend to have a steeper decline in value.
• Factors Influencing Depreciation:
  • Market Demand: High supply and low demand can lead to quicker depreciation.
  • Technology Changes: Rapid advancements in EV technology can make older models less desirable.
  • Consumer Perception: Shifts in consumer preferences can affect how much buyers are willing to pay for used EVs.

Step 2: Examine the Worst Performing EVs

• Top 10 Worst EVs for Value Retention: Research and analyze which EVs experience the most significant drop in value after one year.
  • For instance, the Porsche Taycan Turbo S from 2023 dropped from £150,000 to £113,000, losing approximately £1,800 for every mile driven.
• Data Analysis: Use resources like Solera and CAP HPI to obtain data on various EV models and their depreciation rates.

Step 3: Identify Key Characteristics of Poor Value Retention

• Luxury vs. Economy Models: Both high-end and affordable EVs can see steep depreciation, but luxury models may lose value faster due to higher initial costs.
• Mileage and Usage: Pay attention to how mileage affects depreciation; lower-mileage vehicles may retain value better than those heavily used.
• Brand Reputation: Brands with a strong reputation for reliability may hold their value better.

Step 4: Make Informed Decisions

• Buying Considerations: If you’re looking to buy an EV, consider models known for better value retention to minimize depreciation losses.
• Selling Strategies: If you own an EV, timing your sale can impact how much you get back. Selling before the steepest depreciation occurs can maximize returns.

Conclusion

Understanding the depreciation trends in electric vehicles is crucial for anyone involved in the EV market. By examining the factors that contribute to value loss and identifying which models depreciate the fastest, you can make smarter buying and selling decisions. Stay informed and consider the long-term implications of your investment in an electric vehicle.