EVs On The Expressway To Depreciation: Study Drops The Voltage On Resale Values!

January 9, 2024

You know that old saying that goes “…when you buy a new car, it loses thousands of dollars in value once you drive it off the lot.”

Okay, that may be something of an exaggeration, but there is no doubt that once a vehicle is sold it loses some value rather you are in Harlem or Harare.

How much value a vehicle loses – known as depreciation – depends on several factors. One of the main factors is consumer demand for the particular make and model.

“…electric vehicles (EV) lose their value at the fastest rate.”

Right now, electric vehicles (EV) lose their value at the fastest rate. Trucks and hybrids are best at maintaining their value.

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In a study of over 1 million vehicles sold from November 2022 to October 2023, iSeeCars.com determined the rate of depreciation over five years. In comparing this data historically, it found that depreciation was lower across major segments than in 2019.

“The good news for car owners is that all used cars hold their value better than they did five years ago,” said Karl Brauer, iSeeCars executive analyst. “But not all used cars retain value equally, with trucks and hybrids among the best segments and electric vehicles the worst. Hybrids have a nearly 12 percentage point advantage over EVs in value retention, which translates to thousands of dollars in higher market value after five years.”

EVs out of favor

While the average five-year depreciation for all vehicles is 38.8%, electric vehicles are more than 10 percentage points worse at 49.1%. In this era of high gasoline prices, SUVs also lose more value than the average vehicle at 41.2%.

In recent weeks, industry experts have raised an alarm over declining EV sales amid rising inventories of these vehicles, on which the auto industry has staked its future. Toyota recently cut its forecast for EV sales for the next fiscal year by 39.1%. Ford has also reduced its production of these vehicles.

“… consumers still appreciate a hybrid’s combination …”

“The disparity between electric vehicles and hybrids is worth noting, with EVs the worst group at holding their value and hybrids among the best,” said Brauer. “Some manufacturers have reduced or even abandoned the hybrid market in favor of EVs, but these figures suggest consumers still appreciate a hybrid’s combination of higher fuel efficiency and zero range anxiety.”

Luxury models go begging

Luxury vehicles are also big losers when it comes to retaining their value. The Maserati Quattroporte, BMW 7 Series and the Maserati Ghibli all lost more than 61% of their value over the first five years.

Consumer Reports that the Porsche 911 (coupe) and the Porsche 718 Cayman lose the least value on a percentage basis, though the dollar amount is high because of the vehicles’ sticker prices. The Toyota Tacoma is the best truck in holding its value, giving up just $8,359 – or just over 20% – after the first five years.

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