Anika Begay
EV depreciation is a pretty hot topic right now, and for good reason. On the one hand, there are some fantastic deals to be had on the used market, but on the other, of course, there’s the thorny issue of some EVs losing value. half of their value in a single year.
Cars that lose you a lot of money right out of the box are nothing new, especially at the pricier end of the market. And if you plan to keep your shiny new EV for a long time, then its value after just a year or two matters much less. But what if you’ve experimented with your first EV and then decided that its range or your local charging infrastructure isn’t up to par and you want to sell it within the first year? If that’s the case, you should be prepared for a significant loss.
In an effort to not lump all EVs into the same category, we tried to be balanced in our approach to uncovering trade-in valuations. There are plenty of details to share here, too, like the U.S. dealer who warned our reporter about selling him his EV, or the story of a Mercedes EQE that lost more than $600 Everyday—but for now let’s provide the cold, hard numbers.
We are using two tools for this research. The first is an online rating system from Edmunds, the US automotive industry resource, and the second is Cap HPI, a vehicle rating service for the UK automotive trade. We start with the UK EV trade landscape, then compare it to the US.
Main culprits
Our first finding was that in the UK, many new electric cars lose 50 percent of their value in the first 12 months. Yes, you read that right: some EVs depreciate by 50 percent in just one year.
Now, that can’t be said about every EV, but Cap HPI data provided to WIRED by Parkers, a respected British online car resource, revealed that six different EVs are all set to halve in value after 12 months and 10,000 miles. These include the Audi e-Tron GT, which has fallen 49 percent from £107,675 ($138,000) to £54,700 ($70,100), and the Ford Mustang Mach-E, which has fallen 52 percent from £59,325 to £28,575. A Polestar 2 would also lose 52 percent of its £52,895 list price in just 12 months, according to the data.
The Tesla Model 3 fared only slightly better, down 45 percent over the first 12 months and 10,000 miles, while the Porsche Taycan dropped 49 percent and the Hyundai Ioniq 5 lost exactly half that over the same period. These prices are all based on a mid-range version of each car, since factors like battery size, trim level, and even paint color can have a noticeable effect on trade-in value.
Miley’s face
But you know what has a smaller impact on depreciation? Mileage. If the Polestar 2 Long Range mentioned above had covered 20,000 miles in its first year instead of 10,000 – well above the UK annual average of just 7,000 – its estimated trade-in value would only drop by an extra £975, or an additional 2 per cent of its 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 its first 12 months and 10,000 miles. But if it had done 20,000 miles in the same year it would have dropped just another £2,650. Or, after two years and 20,000 miles it would be worth £44,175, according to Cap HPI data. Age (beyond the first 12 months) has a similarly insignificant effect. A 10,000-mile Taycan is worth £50,700 after a year, or £46,600 after two years.
YouTuber The MacMaster has tracked the decline in value of his two-year-old Taycan, which has dropped from a new price of £120,000 to a Porsche dealership valuation of £44,650 in March this year, leaving him in the red as he still owes around £64,700 on the EV. To make matters worse, the Porsche dealership that provided the valuation has allegedly refused to take his Taycan.
Remember, these are all estimated trade-in values. You would expect to earn more by selling the car privately, and you would see the same car advertised at a higher price by a dealer to ensure you 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, then only £2,500 more after two years and 20,000 miles. If the first 10,000 miles had been spread out over 18 months rather than 12, the price would only drop by £825 more over those six months.
The ability for Tesla and other EV makers to update and enhance a car’s software months or even years after it leaves the factory should help with long-term depreciation. We’ve seen how Tesla can push major UI updates and even add entirely new features over the air. In 2019, Jaguar pushed a software update that claimed to boost its I-Pace’s range by up to 8 percent, and in 2022, the Polestar 2 got Apple CarPlay, a feature manufacturers used to charge for, via a free OTA update.
EV vs ICE
As we’ve said before, steep first-day depreciation has long been the norm for the car ownership journey. But how do year-old EVs compare to similar combustion-engined cars? And more specifically, what happens when you compare two similarly sized, similarly priced cars from the same manufacturer? Cap HPI data has the answers, and once again, the results are best viewed sitting down.
Comparing a gasoline-powered Audi Q7 55 with an electric Audi e-tron 55 SUV, both one year old and with 10,000 miles on them, the gasoline-powered car is worth 42 percent more after 12 months, despite costing less when new.
This is also true for lower-priced cars. Cap HPI data showed that, after three years and 30,000 miles, a petrol Volkswagen Golf is 46 percent more expensive than an electric Golf.
We’d expected to find a similar difference between the petrol Porsche Panamera and the electric Porsche Taycan. However, Cap HPI data suggests that similar, mid-level 4S variants of each lose a similar amount of value over two years and 20,000 miles. The Panamera has fallen from £93,140 to £63,250, while the Taycan has dropped from £84,030 to £53,000.
Automotive America
Now for U.S. pricing. According to Edmunds, a 2022 Porsche Taycan Turbo with 10,000 miles (well below the U.S. annual average of 14,000) was worth about $106,000 as of this writing, in July 2024. That’s about $50,000 less than it would have cost new, excluding optional extras, which increase the retail price but tend not to affect resale value.
Historical data from Edmunds shows the car’s value briefly rising from $129,000 to nearly $131,000 between August and October 2023, then dropping significantly thereafter, plummeting to as low as $4,000 per month between November 2023 and February 2024, before dropping another $10,000 over the next five months.
