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Wednesday, August 7, 2013

Not so good news on EV's

We try very hard to present both sides of the economic/environmental scorecard when it comes to investments in green.  We've been big proponents, for many reason, of EV's, and still are, but can't ignore this story or the facts quoted.  
Hopefully, this will change as EV's are more common and become great used cars: 

Electric cars lose 30 percent of value after one year, NADA says

The dealer assocation said values for EVs and plug-in hybrids are dropping twice as fast as those of standard hybrids and gasoline-powered vehicles.

f you’re looking to sell or trade in a used plug-in hybrid or electric car, prepare to take a major hit on depreciation.

According to a report from the National Association of Automobile Dealers, plug-in vehicles perform considerably worse at resale than regular hybrids or gasoline-powered cars do.

In 2012, NADA estimated that all plug-in vehicles lost nearly a third of their value in one year (the average depreciation was 31.5 percent). By comparison, similar regular hybrids like the Toyota Prius and gas-powered cars such as the Honda Civic saw significantly lower depreciation rates of 14.0 percent and 12.4, respectively – or less than half that of pricier plug-in hybrids and electric cars. 

NADA predicted that the depreciation rate of plug-in EVs will improve only slightly over the next two years -- down to 29.7 percent in 2013 and 27.4 percent in 2014. But the organization said in the report that it expects “used plug-in EV depreciation to continue to outpace the overall market’s rate of loss by a significant margin in the coming years."

Significant hurdles, especially for all-electric cars, have contributed bigger losses. Limited range, few nationwide public charging stations and imperfect battery technologies that cut the vehicle's total range over time all stand in the way.

For vehicle-specific examples, NADA looked at the Nissan Leaf and Chevrolet Volt, the two most popular plug-in cars for sale. The May 2012 edition of NADA’s Official Used Car Guide noted that the 2011 Volt and Leaf carried average trade-in values -- assuming an average mileage after one year -- of $31,060 and $24,857, respectively. But by May 2013, estimated values for each model had dropped by approximately $10,000 to $21,235 and $14,792, respectively.

NADA noted that average trade-in values for a similar Toyota Prius hybrid fell by only $4,735 to $16,490, while a Ford Fusion with a four-cylinder gasoline engine declined by just $3,150 to $16,490.

NADA expects “subtle improvements” in the depreciation rate of plug-in vehicles as the technology matures and becomes more prevalent. It added that this is consistent with depreciation trends of early hybrids, which initially declined at annual rates of 24 to 26 percent before gradually improving to a range of 16 to 18 percent over five years.

“In dollar terms," it added, "this means a plug-in EV worth $20,000 in 2012 is predicted to lose $9,792 of its value by the end of 2014, while similarly priced gasoline and hybrid vehicles are expected to lose $5,573 and $6,455, respectively, over the same period.”

Although NADA did mention the tax incentives available for many EV buyers -- and how this doesn't help used EV buyers -- the organization didn't take those after-sales savings into account for its depreciation values.

"It's important to remember that most buyers of plug-in electric cars received federal income tax credits of $2,500 to $7,500 for purchasing those cars," John Voelcker, editor of, told MSN Autos. "It's much more appropriate to look at the post-incentive new-car price versus the used-car value," he added, "since otherwise it looks like the original owner lost far more money than is actually the case once all incentives are factored in."

1 comment:

  1. YEah! I agree on this point! As it has some reliability issues! Thats why i prefer houston used cars