Plummeting Prices and Evolving Technology: The Current Landscape of Used Electric Vehicles
Once costly and exclusive, electric vehicles (EVs) are now more accessible than ever on the used market. The economic shift is evident when comparing past and present prices of popular models. A Nissan Leaf, which was priced around $35,000 in 2017, is now available for under $6,500. Similarly, a 2021 Hyundai Kona, originally over $43,000, can be found for less than $16,000 here. Even newer models like the 2024 Hyundai Ioniq 5, initially near $62,000, are now listed at approximately $37,000 after being driven for 8,000 miles. Luxury vehicles are not immune to this trend; the Audi e-Tron GT, once valued at $124,000, now sells for $52,000 here.
Driven by the significant drop in prices, used EV sales saw a 59 percent increase year-over-year in August, according to Cox Automotive. However, potential buyers are left wondering if used EVs are a wise investment given their rapid depreciation. According to industry expert Stephanie Valdez Streaty from Cox Automotive, the decision largely depends on the vehicle and the buyer’s needs. She suggests that the initial cost premium over gas-powered cars — now at a record low of about $900 — can be offset by savings on fuel and maintenance. “I would buy one now,” Valdez Streaty remarked, highlighting the strong value proposition of used EVs.
Despite the appealing discounts, past experiences or perceptions about electric cars deter some consumers. John Helveston, a technology adoption expert at George Washington University, explains that earlier models had batteries that degraded rapidly, which often resulted in disappointing ownership experiences. However, advancements in battery technology have improved driving ranges and reduced degradation. Yet, battery warranties generally cover only significant capacity loss, making the car’s original range a crucial factor in assessing depreciation.
Helveston notes that EVs with initial ranges under 200 miles tend to lose value quickly, whereas models like Teslas, with ranges exceeding 300 miles, hold their value better. His research indicates that while EVs depreciate faster than their gas counterparts initially, the depreciation rates converge after a few years.
Buyers should also consider available incentives. Qualified purchasers can earn up to $4,000 in federal tax credits on used EVs priced under $25,000, or up to $7,500 for new models. However, these incentives are set to expire soon, which could influence pricing. Additionally, a surplus of leased EVs entering the market might lead to further price reductions, though the overall market impact remains uncertain. Kevin Roberts from CarGurus believes the market will stabilize, stating, “We don’t expect to see the price volatility in used EVs that we’ve seen in the past.”
The process of buying a used EV can be complex. Helveston points out that, unlike gas vehicles, battery health in EVs is more dependent on usage than on age or mileage. He advises potential buyers to have a full charge check during a test drive to estimate remaining battery capacity. Cox Automotive’s Manheim auction network provides battery ratings, which dealers may share with buyers.
Some consumers may opt to purchase the least expensive EV and maximize its utility, particularly for limited daily driving needs. Helveston himself chose this route, buying a 10-year-old Leaf with a 60-mile range for $5,000. For his daily needs, it’s sufficient, and he reasons that the low purchase cost justifies the investment.
This article originally appeared in Grist at https://grist.org/economics/used-evs-have-never-been-cheaper-but-are-they-a-good-deal/.
Original Story at laist.com