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Do EVs drop in value in the same way as combustion-powered vehicles ?

May 20, 2022

Before buying a vehicle, it is common to think about the option of reselling it in the near or distant future. Thus, you are entitled to ask yourself how much our electric vehicle will be worth in 5 years compared to a combustion-powered vehicle, and what elements come into play in the depreciation of this vehicle. Historically, a strong drop in value has been observed for old generation and outdated EVs. Up to a 70-80% depreciation over the first three years after purchasing for the Citroën C-Zero, Mitsubishi i-Miev and Peugeot iOn, as these are now outdated. With their battery of only 14.5 kWh and a range of 150 km on the old unrealistic NEDC cycle, these electric cars, which were among the first to be distributed in France, quickly became outdated. Indeed, many alternative options have since arrived on the new car market. The reasons for this are the fight against global warming, the management of “CO2” fines associated with the CAFE standard, and the no-claims policy, which greatly benefits electric cars, up to €1,000 to €5,000, (figures updated as of July 1, 2022).

The supply and image of electric cars are on the rise... The value of second-hand cars is following the same path!

When talking about the many alternatives available on the market, it is impossible not to mention the Californian brand Tesla. The Model S, 3, X and Y are selling like hotcakes, both new and second-hand. They are sometimes even perceived as being worth more than their price when new (2) (3)! The same goes for the electric Mini Cooper SE, which is highly popular; one could also think about the more discreet Honda e, another very “fashionable” electric city car. Driven by the CO2 regulation, supply is constantly increasing, within the Stellantis, BMW, VAG (VW, Audi, Skoda, Seat), Honda and Mazda groups. The second-hand car supply is thus directly affected.

Increasingly versatile electric vehicles

A little over a hundred kilometres of range... Now that's a speech from another era! Now cars are being designed on dedicated platforms, with batteries under the floorboard, and with large wheelbases. This means that the batteries are bigger, the range is much greater and there is less fear of running out of power!

The increasing production rate of battery pack cells has resulted in a drop in battery prices, and has limited the price rise of the latest models of cars. Greater versatility for lower prices - it's a win-win!

For example, the Renault Zoé had a battery capacity of 22 kWh when it came out in 2013, and it has been up to 52 kWh since 2020 - and this was achieved without major structure changes (4). It is worth noting that this Zoé, with its 52 kWh, was priced at €32,000 in 2020, not including bonuses and conversion premiums, as opposed to €35,350 for the 14.5 kWh Peugeot iOn ten years earlier. (5)

These latest Zoé cars provide a clear example of the progress of electric vehicles - progress that now seems to be stabilising, at least in the core electric vehicle market. The second-hand supply is growing, as is the average purchase price in this sector.

Wanting to make an ecological purchase, right away? The second-hand car market is waiting for you.

The Covid-19 crisis, the shortage of electronic components – these are both factors which are currently affecting car dealers' visibility, particularly with regard to vehicle delivery times. Electric models are globally favoured, in particular in order to limit the CO2 fines mentioned above.

Also, due to the long delivery times on the new car market, there is a strong appeal for second-hand zero-emission vehicles at the moment. As a result, their depreciation over time could be considerably reduced… (3)

The final obstacle to purchasing an EV: the condition of the battery. There are solutions.

This phenomenon is at the heart of the relative lack of interest in electric cars on the second-hand market: how can you be sure that the battery is in good condition in cars that are potentially already technologically outdated? Solutions are being implemented by manufacturers. Renault, for example, has introduced a “battery certificate” for its used cars, which is valid for three months and can be accessed via the My Renault app. This is a way of finding out the condition of the battery... (2) The idea has also been adopted by Moba, formerly known as “La Belle Batterie”. This organisation, specialised in EV batteries, provides a certificate that assesses the state of wear and tear of the battery, which also helps reassure the buyer of a second-hand vehicle, whether they are a private individual or professional. (6) This will give you peace of mind about the current range potential of the vehicle you are interested in.

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