For most car buyers, buying a new car means accepting that, when it comes time to resell it, a significant portion of its value will have declined. Recent evidence has pointed to this decline being more pronounced when it comes to electric vehicles. A recent article in The Telegraph (via Yahoo! Finance) cited Auto Trader analysis that referred to the amount of depreciation as “unsustainable.”
More specifically, the report cited a higher rate of depreciation for comparably priced electric and internal combustion vehicles, with the electric version losing 48% of its value in three years, while the combustion version lost 34% of its.
It isn’t hard to see one big reason why the market for used electric vehicles isn’t terribly strong, and it has to do with battery technology. To cite one example, let’s look at the Nissan Leaf. The 2024 model has a range of up to 212 miles, according to the manufacturer’s website.
By comparison, a 2017 Leaf has, as per Car and Driver‘s review, a range of just over half of that: 110 miles. A version of the 2020 Leaf with a 40 kWh battery, according to Car and Driver, can go 150 miles on a single charge. Traveling over 200 miles on a single charge sounds appealing; needing to charge a vehicle every hundred miles does not. And it helps to explain why the secondary market for electric vehicles is in the state that it’s in.
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For many drivers, making the leap from an internal-combustion engine to a battery-powered one won’t happen until the convenience gap is closed — in other words, until recharging their vehicle doesn’t feel all that different from refueling it. The advances in battery technology that have taken place in recent years are impressive — but it also helps to explain the drop in value older electric vehicles are experiencing.
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