In general, once you’ve bought something new, its value tends to sink the moment you take it out of the box. For a new car, the value plummets as soon as you drive it off the dealership lot. It’s called depreciation, and with cars it is especially brutal. That shiny new car you just bought for $30,000 might be worth less than $25,000 after just a week of ownership. With very few exceptions (like vintage muscle cars), most cars suffer a steep drop in value almost immediately.
This may go doubly true for electric cars it seems—at least in Europe. Mitsubishi has put out a chart to the BBC which suggests that the higher up-front costs of an electric car, plus the increased depreciation, mean in the long haul it could cost a lot more than a petrol powered car. Now why would they do that?
Mitsubishi seems to think that electric cars will lose their value quicker mostly because of the battery packs. There problem is, nobody knows for sure what will happen to these battery packs over the long term. If they are anything like my laptop battery, they will gradually lose their ability to hold a charge, to the point where they hold only a fraction of what they used to. That means a 10-year old electric car might have just half the range of a brand new electric car of the same model.
Mitsubishi compared their £28,990 i-Miev electric car with a £10,610 Fiat 500 Lounge 1.2 liter. Over three years, the running cost of the i-Miev, including deprecation (down 50% in just 36 months!) is £10,572. The Fiat 500, meanwhile, has running costs of just £9,339, including £3,280 for gas and £5,411 in depreciation. So will the i-Miev really lose half of its value in just three years?
That is up to the market. Automakers are making a big push on electric cars, and while depreciation will certainly be taken into account. However, I also feel most of the “early adapters” to electric cars are not going to be looking to save money, at least not right away. Electric cars have a higher up-front cost, limited range (for now), and fewer “fueling” stations. Even if they do depreciate at a rapid rate though, that means people in the market for a used electric car will have more bargaining power while those with more purchasing power can go by the latest and greatest electric car. Depreciation doesn’t have to be a bad thing.
Source: BBC | Image: Mitsubishi
PDF 
About Christopher DeMorro
When I read this headline, my first though was that used EVs will be affordable. I have always bought used cars and I would love an EV. I would love a used one for $10K a lot more than a new one for $30K. I can wait two or three years. And, if there is a quantum leap in battery technology, there will be 3rd party retrofits.
When I read this headline, my first though was that used EVs will be affordable. I have always bought used cars and I would love an EV. I would love a used one for $10K a lot more than a new one for $30K. I can wait two or three years. And, if there is a quantum leap in battery technology, there will be 3rd party retrofits.
When I read this headline, my first though was that used EVs will be affordable. I have always bought used cars and I would love an EV. I would love a used one for $10K a lot more than a new one for $30K. I can wait two or three years. And, if there is a quantum leap in battery technology, there will be 3rd party retrofits.
in 10 years when you need new batteries the price will be way less than it is now. Did you really just say electric cars have fewer fueling stations than a gas car? I think you are going to be pretty hard pressed to find a building in the US that does not have 110 and probably 220 readily available.
in 10 years when you need new batteries the price will be way less than it is now. Did you really just say electric cars have fewer fueling stations than a gas car? I think you are going to be pretty hard pressed to find a building in the US that does not have 110 and probably 220 readily available.
in 10 years when you need new batteries the price will be way less than it is now. Did you really just say electric cars have fewer fueling stations than a gas car? I think you are going to be pretty hard pressed to find a building in the US that does not have 110 and probably 220 readily available.
Early adopters, not early adapters. ;^)
onesojourner, just because there is electricity, doesn’t mean you can use it. Even asumming you could just plug the car in (which in most cases you can’t they tend to use special charging stations), a parking lot with a bunch of extension cords snaking across it is both unsightly and dangerous. Add to that that the juice isn’t free and there aren’t many places you can charge. Even apartment dwellers may have issues charging at home.
Early adopters, not early adapters. ;^)
onesojourner, just because there is electricity, doesn’t mean you can use it. Even asumming you could just plug the car in (which in most cases you can’t they tend to use special charging stations), a parking lot with a bunch of extension cords snaking across it is both unsightly and dangerous. Add to that that the juice isn’t free and there aren’t many places you can charge. Even apartment dwellers may have issues charging at home.
Early adopters, not early adapters. ;^)
onesojourner, just because there is electricity, doesn’t mean you can use it. Even asumming you could just plug the car in (which in most cases you can’t they tend to use special charging stations), a parking lot with a bunch of extension cords snaking across it is both unsightly and dangerous. Add to that that the juice isn’t free and there aren’t many places you can charge. Even apartment dwellers may have issues charging at home.
All the apartment buildings up north already have outlets so people can plug in their block heaters. Every thing I have read thus far seems to say that you can charge just about any new ev on 110, if you want the super fast charge you are going to need a charging station with 440.
All the apartment buildings up north already have outlets so people can plug in their block heaters. Every thing I have read thus far seems to say that you can charge just about any new ev on 110, if you want the super fast charge you are going to need a charging station with 440.
All the apartment buildings up north already have outlets so people can plug in their block heaters. Every thing I have read thus far seems to say that you can charge just about any new ev on 110, if you want the super fast charge you are going to need a charging station with 440.
I tend to agree with Robert Llewellyn on this subject:
Sincerely, Neil
I tend to agree with Robert Llewellyn on this subject:
Sincerely, Neil
I tend to agree with Robert Llewellyn on this subject:
Sincerely, Neil
Very astute observation, Neil.
Plunking a new battery in a used electric car would make it perform like new again, and battery prices have nowhere to go but down. I’ll bet they actually hold their value better than conventional cars.
Replacing an internal combustion engine and/or automatic transmission on a used car, with all of its air pollution controls, fuel injectors, radiators, and on and on is rarely feasible. When the engine or tranny goes, it is usually time for the junkyard.
Electric motors are going to have long lives.
Very astute observation, Neil.
Plunking a new battery in a used electric car would make it perform like new again, and battery prices have nowhere to go but down. I’ll bet they actually hold their value better than conventional cars.
Replacing an internal combustion engine and/or automatic transmission on a used car, with all of its air pollution controls, fuel injectors, radiators, and on and on is rarely feasible. When the engine or tranny goes, it is usually time for the junkyard.
Electric motors are going to have long lives.
Yes, electric cars will depreciate more than gasoline cars, and there is data to prove it: Peugeot and Citroen have sold more than 5000 electric cars in France, about 10 years ago, and up to 2006/2007, you could find a used one for very little money.
Now their prices are up, as those who are lucky enough to own one keep it since it’s impossible to buy a new replacement. But with new models coming, the Nissan Leaf and the Mitsubishi I-MiEV, I expect history to repeat itself. But what’s wrong with it? All Jaguar cars depreciate hugely, but that doesn’t stop millions of dreaming to own one.
Yes, electric cars will depreciate more than gasoline cars, and there is data to prove it: Peugeot and Citroen have sold more than 5000 electric cars in France, about 10 years ago, and up to 2006/2007, you could find a used one for very little money.
Now their prices are up, as those who are lucky enough to own one keep it since it’s impossible to buy a new replacement. But with new models coming, the Nissan Leaf and the Mitsubishi I-MiEV, I expect history to repeat itself. But what’s wrong with it? All Jaguar cars depreciate hugely, but that doesn’t stop millions of dreaming to own one.
Yes, electric cars will depreciate more than gasoline cars, and there is data to prove it: Peugeot and Citroen have sold more than 5000 electric cars in France, about 10 years ago, and up to 2006/2007, you could find a used one for very little money.
Now their prices are up, as those who are lucky enough to own one keep it since it’s impossible to buy a new replacement. But with new models coming, the Nissan Leaf and the Mitsubishi I-MiEV, I expect history to repeat itself. But what’s wrong with it? All Jaguar cars depreciate hugely, but that doesn’t stop millions of dreaming to own one.
Sad to hear that depreciation may hit electric cars harder than normal vehicles…
Sad to hear that depreciation may hit electric cars harder than normal vehicles…
Sad to hear that depreciation may hit electric cars harder than normal vehicles…
There’s your key word, “may”. The LEAF is different. It’s unlike an BEV on the market and they will be in demand for a long time. When people see how many charging stations there are in the cities and on the interstates, they will want one. My prediction is that it will ‘appreciate’. I don’t plan on buying another car for a long, long time after I buy a LEAF.
There’s your key word, “may”. The LEAF is different. It’s unlike an BEV on the market and they will be in demand for a long time. When people see how many charging stations there are in the cities and on the interstates, they will want one. My prediction is that it will ‘appreciate’. I don’t plan on buying another car for a long, long time after I buy a LEAF.
There’s your key word, “may”. The LEAF is different. It’s unlike an BEV on the market and they will be in demand for a long time. When people see how many charging stations there are in the cities and on the interstates, they will want one. My prediction is that it will ‘appreciate’. I don’t plan on buying another car for a long, long time after I buy a LEAF.
Depreciation is not always a bad thing? Strange argument… throwing away you money is not necessarily a bad thing because someone else can pick it up.
There have been better ways of running cars than batteries and internal combustion engines since Tesla drove the Pierce Arrow for a week fueless. However, we will keep marketing these things because when the masses throw away their money, there is always someone around to pick up the debris.
Depreciation is not always a bad thing? Strange argument… throwing away you money is not necessarily a bad thing because someone else can pick it up.
There have been better ways of running cars than batteries and internal combustion engines since Tesla drove the Pierce Arrow for a week fueless. However, we will keep marketing these things because when the masses throw away their money, there is always someone around to pick up the debris.
Depreciation is not always a bad thing? Strange argument… throwing away you money is not necessarily a bad thing because someone else can pick it up.
There have been better ways of running cars than batteries and internal combustion engines since Tesla drove the Pierce Arrow for a week fueless. However, we will keep marketing these things because when the masses throw away their money, there is always someone around to pick up the debris.