Electric Vehicles Lose Up to 72% Value in Five Years, Study Finds

Used EVs lose up to 72% of their value in five years, led by models like Jaguar I-Pace and Tesla. See which hybrids hold value and what it means for buyers.

While new car prices continue to climb, electric vehicles are experiencing a dramatic drop in resale value. According to a comprehensive iSeeCars study analyzing over 800,000 five-year-old vehicles, EVs lose an average of 58.8% of their original value—a rate significantly steeper than the 45.6% average for all vehicles.

The worst depreciation was recorded by the Jaguar I-Pace, which lost a staggering 72.2% of its MSRP—equivalent to $51,953. Tesla’s lineup also featured prominently among the biggest losers: the Model S depreciated by 65.2% ($52,165), the Model X by 63.4%, the Model Y by 60.4%, and the more affordable Model 3 by 55.9%.

This depreciation is driven in part by rapid technological advancement. As battery range, power, and durability improve year after year, older models become less appealing on the used market. Despite this, not all electrified vehicles follow the same path.

Hybrids, particularly from Toyota, have shown resilience in retaining value. The Toyota RAV4 Hybrid lost only 31.2% of its value over five years. Other models like the Prius, Corolla Hybrid, and Highlander also stayed within a range of 31–39.8%. This is especially impressive considering that the average depreciation for hybrid vehicles stands at 40.7% over five years. Honda’s Accord and CR-V hybrids fell just below that hybrid average, with value losses of around 41%, yet they still outperformed the overall market-wide depreciation rate of 45.6%.

For buyers, these depreciation figures present an opportunity. Models such as the Kia Soul EV, Chevrolet Bolt, BMW i3, and Hyundai Kona Electric are becoming bargains in the used car market—still technologically capable but priced far below new equivalents. This is especially relevant as EV charging infrastructure continues to expand, particularly in regions like California and across Europe.

European markets confirm the trend. Used EV prices dropped by 17–25% over the last year, with the average price falling to €32,656 in November 2023. Government incentives such as Norway’s VAT exemption on new EVs have also played a role, making new purchases more attractive but destabilizing resale values.

Owners are already feeling the impact. With some models losing more than half their value in just a few years, resale has become a financial challenge. However, this trend is boosting EV rental and subscription models, as steep depreciation makes short-term use more cost-effective.

Experts remain cautious. Until technological innovation slows, EVs may continue to struggle with value retention. In a twist of irony, their rapid evolution is what makes them both desirable and financially volatile.

Source: autoblog.com