There are a few factors you should be aware of that might effect an electric vehicle's resale value if you're considering about purchasing one that you intend to sell after a few years. To ensure that your car preserves as much of its worth as possible, you should be aware of the somewhat different parameters for appraising an EV compared to a petrol vehicle.
How will the residual value of your electric car be determined when you wish to sell it? Let's find out, then!
1. Market Demand
Of course, you're more likely to earn a greater resale value if there is a bigger demand for used electric vehicles. For instance, due to a lack of new chips being produced to satisfy consumer demand, the price of old electric vehicles surged by 54% as a result of the worldwide chip crisis.
The brand of your car is crucial when figuring out its secondhand value. A survey by Energy Sage found that Tesla owners are more likely to sell their cars for more money than owners of other makes and models. This is due to the fact that Tesla has the highest market share, is the most well-known brand of electric vehicles, and has unparalleled brand recognition.
In fact, Tesla claims that after three years, you may resell your used car with a guaranteed resale value of at least 50%. According to statistics from CarEdge, not just Tesla vehicles have low depreciation prices; other manufacturers with popular EVs with good resale values include Chevrolet and Audi.
2. Battery Condition
The quality and remaining life of your EV's battery will have an impact on its resale value. This is due to the fact that EV batteries can cost as much as half as much as your vehicle when they need to be replaced. For instance, replacing a Tesla battery pack will cost you between $20,000 and $35,000.
Fortunately, the majority of electric vehicle batteries are lithium-ion and should last between 300,000 and 500,000 kilometres. Not to add, the federal government mandates that all manufacturers offer batteries with a guarantee that is at least eight years long. Additionally, if your battery doesn't retain up to 70% of its initial capacity after eight years, the majority of manufacturers will replace it.
Nevertheless, depending on how far the battery has taken you, the value of your electric car will continue to decline. To determine the battery's condition, prospective purchasers might also see how quickly it charges. If you want to sell your EV in the winter, you should be aware that the battery may lose power more quickly and charge more slowly in subfreezing conditions, which might reduce the car's value.
Your EV's battery pack's lifetime and its capacity to keep a certain amount of charge after many years of operation are both known to suffer when you DC fast-charge it. Compared to EVs that were solely slow-charged, those that often utilised a quick charger will have a visibly lower capacity.
3. Tax Credit
Popular EV vehicles in the US were no longer eligible for the incentive after January 2023's changes to the federal tax credit. In response, Tesla cut costs by up to $13,000 in order to increase the number of variants of its EVs that qualify for the federal tax credit and boost demand in key areas. Ford cut the price of the Mustang Mach-E by up to $5,900, following Tesla's example.
Thus, whether you purchased a Tesla or a Mustang Mach-E last year, their residual value has plummeted in direct proportion to their price reduction. Similar to this, if you purchased your EV before the tax credit went into effect in 2023, it is likely to lose more residual value than an EV that was eligible for the benefit.
The sophisticated technology in used electric cars may increase their resale value over less sophisticated versions. Owning an EV with sophisticated safety features or self-driving technology increases the likelihood that you'll be able to sell it for more money than an equivalent EV model without such features. Tesla is regarded as the industry leader in autonomous driving, but Ford, Lucid Motors, Rivian, and Polestar are catching up.
Bidirectional charging is a feature that should boost the value of EVs like the Ford F150 Lightning when it comes time to sell them. They enable you to charge another EV or even power your home in the event of an electrical grid breakdown using the battery from your electric car. Other electric vehicles, such the Hyundai Ioniq 5, Kia EV6, and Rivian R1T, include AC power plugs that may be used when camping or to directly charge equipment at home.
5. Maintenance History
Because they lack an engine, electric vehicles are less expensive to maintain than gas-powered vehicles. But you must continue to care for your EV in accordance with the owner's instructions. This comprises doing the manufacturer-recommended maintenance on your cabin air filter, brake fluid, A/C desiccant bag, and HEPA filter.
Depending on your EV model, you might need to replenish the gearbox and differential fluid as well as the battery coolant if you've logged more than 150,000 kilometres. Naturally, the residual value of your used EV will be determined based on your maintenance history; if you neglected to keep up with any necessary maintenance schedules, you could receive a lesser offer.
The Used EV Market Is Difficult to Predict
Your used electric car's residual value will be directly influenced by the market demand, battery health, tax credit, technology, and maintenance records if you decide to sell it. The resale value of electric cars has been impacted by external factors including worldwide chip scarcity, which has increased their cost.
However, the secondhand electric vehicle industry is still in its infancy. Therefore, estimating the future value of old electric vehicles is challenging. The demand for both new and used cars will undoubtedly rise as a result of the fact that many more EVs will be introduced over the course of the next ten years as a result of consistently rising sales.