According to a recent investigation by WIRED, some electric vehicles are experiencing severe depreciation, losing up to $600 per day in value. This trend presents both challenges and opportunities in the evolving EV market.

Steep Drops in EV Value

Some electric cars are reportedly losing as much as 50% of their value within the first year. In the UK, several models including the Audi e-Tron GT, Ford Mustang Mach-E, and Polestar 2 have seen their values plummet by around 52% after just 12 months and 10,000 miles.

The Tesla Model 3 fared slightly better, dropping 45% in value over the same period. Luxury EVs aren’t immune either, with the Porsche Taycan losing 49% of its value in its first year.

EV vs. ICE Depreciation

When compared to their internal combustion engine (ICE) counterparts, EVs generally fare worse in terms of value retention. For instance, a gas-powered Audi Q7 55 retained 42% more of its value after one year compared to an electric Audi e-tron 55 SUV, despite having a lower initial cost.

US Market Trends

In the United States, the depreciation isn’t quite as severe but still significant. A 2022 Porsche Taycan Turbo with 10,000 miles was valued at about $106,000 in July 2024, approximately $50,000 less than its new price.

Karl Brauer, an analyst from iSeeCars, noted, “It’s clear used-car shoppers will no longer pay a premium for electric vehicles, and in fact consider electric powertrains a detractor, making them less desirable—and less valuable—than traditional models.”

Factors Contributing to Rapid Depreciation

Several factors contribute to this trend:

High initial costs of EVs
Concerns about range and charging infrastructure
Rapid technological improvements in newer models
First-generation technology in many current EVs
Discounts on new EVs affecting used market prices

Silver Lining for Used EV Buyers

While this depreciation is concerning for new EV owners, it presents excellent opportunities for used car buyers. Bargains abound, from £5,000 ($6,400) Renault Zoes to $30,000 Jaguar I-Paces.

EVXL’s Take

The rapid depreciation of EVs highlights the growing pains of a maturing technology. However, this shouldn’t deter potential EV adopters. As we’ve seen in recent Tesla updates, manufacturers are continually improving their vehicles through over-the-air updates, potentially slowing long-term depreciation.

For those considering an EV purchase, buying used might be the most economical option, allowing you to benefit from lower prices while still enjoying the advantages of electric driving. As the EV market stabilizes and technology improves, we may see depreciation rates align more closely with traditional vehicles in the future.