The electric car race seems to be the new horsepower race, with seemingly every automaker trying to pump out a new electric or plug-in hybrid car. The battle is between all kinds of brands, both luxury and entry level. Chevy and Nissan battle it out with the Volt and Leaf, respectively, while Tesla and BMW have been at each other’s throats for the past year or so. The electric car wars are getting red hot. There’s a problem, however, and that is the fact that EVs are depreciating in value at an extraordinary rate.
Most people who drive EVs have leased theirs, which means that they were able to take advantage of some pretty great government incentives. The problem is that when those leases are up, the electric cars are worth next to nothing afterwards. Nissan has just sent over 500 off-lease Leafs to auction and got rid of them for what seems like pennies. Much of the reason for this is that there are only incentives for buying new EVs, not used ones. So once the car has been leased, driven and given back to the dealer, no one wants to buy them anymore.
One of the Country’s largest liquidator of wholesale cars, Manheim Auctions, claims that used 2013 Nissan Leafs, by 2016, will only be worth $7,650, compared to today’s value of $14,900. That’s nearly cut in half in only one year. But it isn’t just the Leaf that suffers ridiculous annual depreciation. While the Leaf is expected to lose 48.70% in annual depreciation, the Mitsubishi i-MiEV is expected to lose 44.70% and even the Tesla Model S is expected to drop 28.90%. Those are massive annual depreciation numbers. Even the BMW i3 has been having lease takeovers, from people who put significant down payments on their initial lease, for incredibly low monthly payments. We’ve seen payments ranging from $250 to $400/month on well equipped i3s with the Range Extender function.
The EV is one of the most important vehicles for the automotive landscape at the moment, but the current value of them is already low and is continuing to plummet. Decently low oil costs and lack of incentives on used EVs is causing people to buy low-cost gasoline alternatives for commuting, rather than a low-cost EV, like the Leaf or Volt. Only if oil prices start to rise again, or some kind of government incentives are put on used EVs, will the second hand value of them go up. Until then, go out and buy used EVs, you’ll get one for pennies on the dollar. Hell, I don’t see a reason why people shouldn’t be flocking BMW lots for used i3s. Who cares if it doesn’t have more incentives, go buy a carbon fiber monocoque EV for the same price as a decently loaded Honda Accord while you still can.