Even so, the trade-in values of used EVs have dropped sharply over the past year. Here’s some data from the NADA report that current EV owners may find alarming:
In model-specific terms, the May 2012 edition of the NADA Official Used Car Guide noted that the 2011 versions of the Volt and Leaf carried respective Average Trade-in Values of $31,060 and $24,857. By May 2013, values for each model had fallen by some $10,000 to $21,235 and $14,792, respectively.
By contrast, the value of a 2011 Prius fell by $4,735 and a gas-powered 2011 Ford Fusion dropped by $3,150 in value over that same time span.
Clearly, one big reason EV values have fallen so dramatically is that used EVs are competing for the attention of buyers against their shinier, untouched brethren: new-model EVs. Thus far, 2013 has been marked by aggressive deals on the Leaf and other electric cars, spurring on increased demand for plug-ins among bargain hunters. Now that the base price of the Leaf is under $19,000 once incentives are factored in, and there are an abundance of cheap lease deals for cars like the Fiat 500e, Honda Fit EV, and the Chevy Spark EV, it’s no wonder sellers are being forced to cut prices on older EVs. Who’d buy an old car when the new version costs about the same, or is maybe even cheaper?
What also makes EV depreciation a special case is that consumers worry about “range anxiety”—the limited number of miles a plug-in can be driven before requiring a recharge—even when the vehicles are new. As the vehicles age and the batteries lose their juice, the anticipation is that the driving range purely on battery power will drop over time. Among the many new promotions on EVs, SmartCar has been offering a deal for buyers to rent its electric car batteries for $80 per month, in order to lower the upfront price and also ease concerns about drivers being stuck with a battery that lacks power down the line. (The rent payment covers the cost of a battery replacement, if it’s ever needed.)
There’s also the general concern about the unknown, because EV technology is so new and hasn’t had the benefit of being tested over the course of decades. “Maintenance and longevity as EVs age affect used prices more so than prices for their ICE [internal combustion engine] counterparts,” the NADA report states. “All other influencing factors being equal, this imposes a higher rate of depreciation on electric vehicles, especially early on in the technology’s lifecycle—exactly where plug-in EVs are today.”