IIt’s no secret that one of the biggest financial losses a new car buyer faces is depreciation, with nearly half of a car’s retail value evaporating after just three years of ownership on average… if You are lucky.
Recently, depreciation has been flagged as a major barrier to electric vehicle uptake — which is natural, given the price difference between an EV and a comparably sized combustion vehicle, in the tens of thousands of dollars. is on order – but does that mean Electric is giving you more financial trouble than usual when it comes time to sell?
The short answer is “no, not really”. Here’s why.
The big picture
If you graphed the three-year retained values of all cars in Australia, the thickest part of the bell curve would be just above the 50% mark*. Believe it or not, a car clinging to anything north of 52 percent of its original value can be considered an above-average performer.
And that’s where you’ll find most of the pure electric vehicles and plug-in hybrids currently on sale in Australia. In terms of their cost-effectiveness, they actually don’t do that bad.
Except for the Mitsubishi Outlander PHEV.
Pity the Outlander. Despite being the first mainstream plug-in hybrid vehicle in Australia – and based on a volume-selling SUV – the electron-munching Mitsubishi retains just 42 per cent of its value after three years. This is a poor result, on par with the Tata Xenon, Haval H2 or BMW M5. Despite being able to travel up to 54km on dirt-low electricity, it’s also pretty good under what other combustion-engined Outlander variants achieve.
But this is an outlier.
The Nissan Leaf is next lowest on the retained value totem, but its 51 percent score isn’t quite as dire as the Outlander PHEV’s. gave BMW i3 and the Renault Zoe each return 53 percent to owners after three years, and the Hyundai Ioniq returns 54 percent. This group of battery electrics is in the ‘average’ part of the retained-price spectrum – not amazing, but certainly not terrible.
This is where things get interesting. The Hyundai Kona Electric is pretty expensive for a small SUV, retailing for just under $60K, yet it hangs on at 55 percent of its original value at the 36-month mark. That’s still a lot of money to say goodbye, but consider: a Toyota Kluger GXL AWD – which costs almost the same – retains 56 per cent of its value, yet the drop in value hasn’t deterred the thousands of Australians who have made the Kluger one of Australia’s most popular new cars.
So if an electric car falls at the same rate as a large SUV from one of Australia’s most trusted brands – and one that traditionally performs best when it comes to retained value Coming up – saying that depreciation is a major downside of EV ownership is an understatement. Depreciation is the major downside of the purchase. anyone New cars, and EVs, are no exception. Generally, as far as value retention is concerned, they perform no better or worse than other similarly priced cars.
There are also some other interesting takeaways. While Tesla is the brand most people associate with EVS, and one that ranks fairly high on the Desirability Index, the Tesla Model S has the same score as the Kona Electric: 55 percent. The Model 3 fares better in terms of variety with 57/58 percent (although it’s so new to the Australian market that those numbers may change), but it’s the Model X that’s the more solid performer with a score of 63 percent. Is.
That’s an excellent result for the Model X, and one that makes it one of the most depreciation-resistant cars in the country.
Jaguar’s I-Pace is still slightly behind with a respectable 61 percent (as is Volvo’s plug-in hybrid XC60 T8), while the larger XC90 T8 is another strong performer with 63 percent. The message is clear: If you want to buy an EV that’s close to depreciation proof, make it a big SUV… but not an Outlander PHEV.
Things can get better.
So sure, you can buy a larger conventional vehicle for the same amount you’d spend on any given electric car, but in most cases you’ll lose just as much when it comes time to sell. . If you’ve decided to go electric and can afford to do so, don’t let depreciation discourage you. If you’re after the most metal for your buck, EVs aren’t for you.
However, the sustained values of EVs in Europe will make you cry. The Model S retains about 61 percent of its original value there, while the Hyundai Ioniq Electric does even better at 61.7 percent. Nissan Leaf. 64.5% No wonder it’s one of Europe’s most popular electric cars.
The Model X also scored 64 percent, while the I-Pace is the best-performing pure electric of them all, with 74.6 percent retention after three years. In Australia, the highest scoring car according to industry data is the Mercedes-Benz C200 at 73 per cent.
Why do they do so well? With EVs receiving a lot of support from European governments in the form of lower taxation, reduced/removed congestion charges, and other incentives, it’s no surprise that electric cars are a more attractive prospect in the used car market there. are Until these steps are taken from here, EVs in Australia will likely remain fairly consistent in the depreciation stakes compared to other similarly priced cars.
*Note that these retained price figures, provided to us by industry monitor Glass’ Guide, are intended as guidelines for pricing in the trade, not necessarily if What do some owners get when they sell their three-year-old car? private market. By the same token, the prices you might see in classified ads don’t necessarily reflect the true market value – just what the owner is willing to let their car go for.
Importantly, the numbers are calculated using a consistent methodology, meaning we have an accurate idea of which cars and brands perform best in the used car market.