Depreciation of electric vehicles is a hot topic at the moment, and for good reason. On the one hand, there are fantastic deals to be found on the second-hand market, but on the other hand, there is of course the thorny issue that some EVs are losing their popularity. half of their value in one year.
Cars costing you a fortune the moment you drive them off the dealership is nothing new, especially at the higher end of the market. And if you plan on keeping your shiny new EV for a long time, its value after a year or two will matter far less. But what if you experimented with your first EV and then decided that the range or local charging infrastructure wasn’t good enough and you wanted to sell it within the first year? If that’s you, you’d better prepare to take a significant loss.
In order not to tar all electric vehicles with the same brush, we’ve tried to be balanced in our approach to uncovering trade-in valuations. There’s plenty of color to report here, like the U.S. dealer who actively warned our reporter not to sell him their electric vehicle, or the story of a Mercedes EQE that lost more than $600 every day—but now let's give the cold, hard numbers.
We’re using two tools for this research. The first is an online valuation system from Edmunds, the source of the US auto industry, and the second is Cap HPI, a vehicle valuation service for the UK car trade. Let’s start with the UK EV trade-in landscape and then compare it to the US.
Main Offenders
Our first discovery was that in the UK, several new electric cars lose 50 percent of their value in the first 12 months. Yes, you read that right: some electric cars lose 50 percent of their value in a single year.
This can’t be said of every electric car, but Cap HPI data provided to WIRED by Parkers, a respected UK online car resource, revealed how six different electric cars are all expected to halve in value after 12 months and 10,000 miles. These include the Audi e-Tron GT, which has fallen by 49 percent from £107,675 ($138,000) to £54,700 ($70,100), and the Ford Mustang Mach-E, which has fallen by 52 percent from £59,325 to £28,575. According to the data, a Polestar 2 is also set to lose 52 percent of its £52,895 sticker price in just 12 months.
The Tesla Model 3 fared only slightly better, down 45 percent in the first 12 months and 10,000 miles, while the Porsche Taycan was down 49 percent and the Hyundai Ioniq 5 lost exactly half over the same period. These prices are all based on a mid-spec version of each car, as factors like battery size, trim level and even paint color can have a significant effect on resale values.
Miley Face
But you know what has less impact on depreciation? Mileage. If the aforementioned long-range Polestar 2 had covered 20,000 miles in its first year instead of 10,000 – well above the annual UK average of just 7,000 – its estimated trade-in value would have dropped by just £975, or another 2 per cent of the original price.
It’s a similar story with the Taycan. A 4S model with the long-range battery dropped from £100,200 to £50,700 in the first 12 months and 10,000 miles. But if it had done 20,000 miles in the same year, it would only have dropped by a further £2,650. Or, after two years and 20,000 miles, it would be worth £44,175, according to the Cap HPI data. Age (after the first 12 months) has a similarly insignificant effect. A Taycan with 10,000 miles is worth £50,700 after one year, or £46,600 after two years.
YouTuber The MacMaster has charted the depreciation of his own two-year-old Taycan, which has plummeted from a new price of £120,000 to a Porsche dealer value of £44,650 in March this year, leaving him in negative equity as he still owes around £64,700 on the EV. To make matters worse, the Porsche dealer who provided the valuation refused to take his Taycan.
Remember, these are all estimated trade-in values. You would expect to make more by selling the car privately, and you would see the same car advertised for more at a dealership to ensure they make a profit.
The Tesla Model 3’s depreciation also slows significantly after the first year. Cap HPI data shows that a 2023 Model 3 Long Range would drop from £50,000 to £27,550 after one year and 10,000 miles, and then drop by just an additional £2,500 after two years and 20,000 miles. If the first 10,000 miles were spread over 18 months instead of 12, the price would drop by just an additional £825 over those six months.
The ability for Tesla and other EV makers to update and upgrade a car’s software months or even years after it leaves the factory should help with long-term depreciation. We’ve seen Tesla push out major user interface upgrades, and even add entirely new features, over the air. In 2019, Jaguar released a software update that claimed to increase the range of its I-Pace by up to 8 percent , and in 2022, the Polestar 2 got Apple CarPlay, a feature that manufacturers used to charge a fortune for, via a free OTA update.
EV vs ICE
As we’ve said before, heavy day-one depreciation has long been a fact of life for car ownership. But how do year-old electric cars compare to comparable combustion cars? And more specifically, what happens when you compare two cars of similar size and price from the same manufacturer? Cap HPI data has the answers, and again, the results are best viewed while sitting down.
If you compare a petrol Audi Q7 55 with an electric Audi e-tron 55 SUV, both one year old and with 16,000 kilometres on the clock, the petrol car is worth 42 percent more after 12 months, despite costing less when new.
This also applies to cars with a lower value. Cap HPI data showed how, after three years and 30,000 miles, a petrol-powered Volkswagen Golf has a price premium of 46 percent over an electric Golf.
We’d expect to find a similar difference between the gas-powered Porsche Panamera and the electric Porsche Taycan . However, Cap HPI data suggests that comparable, mid-range 4S variants of each lose a similar amount of value over two years and 20,000 miles. The Panamera fell from £93,140 to £63,250, while the Taycan fell from £84,030 to £53,000.
Car America
Now, onto US pricing. According to Edmunds, a 2022 Porsche Taycan Turbo with 10,000 miles (well below the US annual average of 14,000) was worth about $106,000 at the time of writing in July 2024. That’s about $50,000 less than what it would have cost new, excluding optional extras, which add to the resale price but typically don’t affect resale value.
Historical data from Edmunds shows that the car’s value briefly jumped from $129,000 to nearly $131,000 between August and October 2023, but has since fallen sharply. Between November 2023 and February 2024, the value dropped by as much as $4,000 per month, before dropping by another $10,000 over the next five months.
