Electric vehicle depreciation is a sizzling topic right now, and for good reason. On the one hand, there are some fantastic deals to be found on the second-hand market, but on the other hand, there is of course the thorny issue of depreciation of some electric vehicles half their value within one year.
Cars that lose you a lot of money the moment they leave the showroom are nothing modern, especially in the more costly end of the market. And if you plan to keep your shiny modern EV for a long time, its value after a year or two matters much less. But what if you experimented with your first EV, then decided its range or local charging infrastructure wasn’t up to scratch, and you wanted to sell it within the first year? If that’s the case for you, you better be prepared to take a significant loss.
To avoid lumping all electric vehicles together, we’ve tried to be balanced in our approach to uncovering resale valuations. There’s also plenty of color to be said here — like the U.S. dealer who actively warned our reporter not to sell him an electric vehicle, or the story of the Mercedes EQE that lost more than $600 every day—but for now we’ll just present you with some cool, demanding numbers.
We utilize two tools for this study. The first one is an online assessment system The Edmundsresource of the American automotive industry, and the second is HPI Capvehicle valuation service for the UK motor trade. Let’s start with the UK electric car trade landscape and then compare it to the US.
Major criminals
Our first discovery was that in the UK, a variety of modern electric cars lose 50 per cent of their value in the first 12 months. Yes, you read that right – some electric vehicles lose 50 per cent of their value in a single year.
The same can’t be said for every electric vehicle, but the Cap HPI data provided to WIRED by Parkersa respected British online motoring resource, revealed that the value of six different electric vehicles is set to halve after 12 months and 10,000 miles. They include the Audi e-Tron GT, which has seen its price drop by 49 percent from £107,675 ($138,000) to £54,700 ($70,100), and the Ford Mustang Mach-E, which has seen its price drop by 52 percent from £59,325 to £28,575. The Polestar 2 would also shed 52 percent of its list price of £52,895 in just 12 months, according to the data.
The Tesla Model 3 fared only slightly better, falling 45 percent over the first 12 months and 10,000 miles, while the Porsche Taycan fell 49 percent and the Hyundai Ioniq 5 lost exactly half over the same period. All of these prices are based on the average version of each car, as factors like battery size, equipment level and even paint color can have a significant impact on resale value.
Miley’s face
But do you know what has a smaller impact on depreciation? Mileage. If the long-range Polestar 2 mentioned above had covered 20,000 miles in its first year instead of 10,000 – well above the UK annual average of just 7,000 – its estimated resale value would have fallen by just an additional £975, or another 2 per cent of its original price.
It’s a similar story with the Taycan. The 4S with the long-range battery dropped from £100,200 to £50,700 in the first 12 months and 10,000 miles. But if it did 20,000 miles in the same year, it would only fall by a further £2,650. Or after two years and 20,000 miles it would be worth £44,175, according to Cap HPI’s data. Age (after the first 12 months) has a similarly negligible effect. A Taycan with 10,000 miles on the clock is worth £50,700 after a year, or £46,600 after two years.
YouTuber MacMaster he has watched the value of his two-year-old Taycan fall from a modern 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 around £64,700 on the EV. To make matters worse, the Porsche dealer who gave him the valuation allegedly refused to take his Taycan.
Remember, all of these are estimates. You would expect to make more if you sold the car privately, and you would see the same car advertised for more through a dealership to ensure you made a profit.
Tesla Model 3 depreciation also slows down significantly after the first year. Cap HPI’s data suggests that a 2023 Model 3 Long Range would drop from £50,000 to £27,550 after one year and 10,000 miles, and then only an additional £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 by an additional £825 over those six months.
The ability for Tesla and other EV manufacturers to update and upgrade a car’s software months or even years after it leaves the factory should assist with long-term amortization. We’ve seen Teslas push out major user interface updates and even add entirely modern features over the air. In 2019, Jaguar released a software update that supposedly increased the range of its I-Pace by up to 8 percent, and in 2022, the Polestar 2 gained Apple CarPlay — a feature that manufacturers once charged high prices for — via a free OTA update.
Electric Vehicle vs. Combustion Engine
As we’ve said before, gigantic day one depreciation has long been the norm for car ownership. But how do year-old EVs compare to similar combustion-engined cars? Or more specifically, what happens when you compare two similarly sized, priced cars from the same manufacturer? HPI Cap’s data provides the answers, and again, the results are best viewed from a seated position.
Comparing a petrol-powered Audi Q7 55cc with an Audi e-tron 55cc electric SUV, both a year elderly and with 10,000 miles on the clock, the petrol-powered car is worth 42 per cent more after 12 months, despite costing less when modern.
This also applies to lower-value cars. Cap HPI data showed that after three years and 30,000 miles, a petrol-powered Volkswagen Golf is 46 per cent more costly 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’s data suggests that similar, mid-range 4S versions of each lose similar value over two years and 20,000 miles. The Panamera has dropped from £93,140 to £63,250, while the Taycan has dropped from £84,030 to £53,000.
Auto-America
Now for U.S. pricing. According to Edmunds, a 2022 Porsche Taycan Turbo with 10,000 miles on the clock (well below the U.S. annual average of 14,000 miles) was worth about $106,000 at the time of this writing in July 2024. That’s about $50,000 less than a modern car would cost, not including optional extras that augment the retail price but typically don’t affect resale value.
Historical data collected by Edmunds shows the car’s value briefly rose from $129,000 to nearly $131,000 between August and October 2023, but has since dropped significantly, decreasing by $4,000 per month between November 2023 and February 2024, and then by another $10,000 over the following five months.