The leap in electric car technology and rapidly expanding model range over the past decade have been indicative of the future direction of the automotive industry. Although electricity is increasingly penetrating European cars, the laws of the market remain similar: some electric cars depreciate more than others. Therefore, buyers are increasingly asking themselves the question of what to consider when choosing an electric car so that it still retains a solid residual value after a few years.
Increasing competition reduces value
The first generation Nissan Leaf, which debuted in 2010, can be considered one of the pioneers of modern electric cars. Not only was it one of the first mass-market electric cars, but for a time it was virtually the only choice for drivers who wanted a traditional mid-range sedan suitable for everyday use.
For this reason, the residual value of this electric car was initially quite high, but the arrival of more modern models on the market affected the prices of the Leaf in the secondary market. For example, in 2015, the Kia e-Soul offered drivers not only a more playful look, but also a longer range on a single charge. Increasing competition and improved technical features have reduced the Leaf’s residual value.
For example, currently the first generation Nissan Leaf, produced eight-nine years ago, costs around 6-7 thousand. euros, or approximately 20%. its initial values. The newer ones (six-seven) cost around 10 thousand. euros, or about a third of the original price, and the Kia e-Soul of a similar year – about 14-15 thousand. (almost half the price of a new electric car).
Dainius Jakas, electric car enthusiast and creator of the blog “100procentuelektrinis.lt”, notes that technologies and the distance traveled on a single charge are one of the key aspects that help maintain a higher residual price of an electric car.
“For example, a new Hyundai Ioniq used to cost about the same as a Nissan Leaf, but now a used Ioniq costs much more because it is technologically superior: it goes much further on a single charge, has a cooled battery and is cheaper.”
And the second generation Leaf, compared to the first model, differs only visually and has a slightly modified interior, but the technologies are almost the same. Therefore, it can be noted that the Ioniq produced in 2017 is more expensive than the Leaf which is one year newer, notes D. Jakas.
Technological progress
Increasing competition among automobile manufacturers leads to rapid technological progress. Ten years ago motorists were satisfied with an electric car that could travel 100-150 kilometers on a single charge, now models that can travel three or four times further attract more attention. Therefore, such electric cars are likely to become more valuable in a few years, but an electric car expert believes that much will depend on the progress of technology.
“Until battery technology for electric vehicles develops and the final price of a car is comparable to that of a car with an internal combustion engine, the depreciation in the first year will be quite high. A simple comparison: a petrol Hyundai Kona costs about 20,000 and an electric one costs about 40,000, but in five years the two will cost about the same or there will be little difference.”
Moreover, no one guarantees that, for example, after five years the normal distance traveled by an electric car will be 800 kilometers on one charge. In this case, the electric Hyundai Kona, which now covers a relatively high distance, will be valued the same as the Nissan Leaf, which now covers 100 kilometers, thinks D. Jakas.
Therefore it is important to pay attention to other parameters of the electric car, such as the charging speed of the battery. Although technology is improving in this regard as well, many electric cars still need at least half an hour or an hour to charge the battery enough to continue the journey.
Some manufacturers solve this problem with 800 volt systems. The Porsche Taycan, for example, is one of the first electric cars to have such a system, so five minutes at a charging station is enough to travel another 100 kilometers. However, this technology is already possible for much cheaper electric cars.
For example, the latest Kia EV6 also features an 800-volt system that offers ultra-fast charging. This means the batteries from 10 to 80%. it will be able to recharge in just 18 minutes and the energy needed to travel 100 kilometers will be recharged in less than four and a half minutes. According to the release, the new Kia EV6 will be able to travel a distance of 510 kilometers on a single charge.
This means that even on long journeys a relatively long distance will be covered between one charge and another and it will be possible to replenish electricity reserves relatively quickly during stops. Such features of the electric car will continue to meet drivers’ needs quite well in the future, so its residual value is likely to be quite high.
Guarantees that dispel doubts
Although electric cars are technically simpler than cars with internal combustion engines, drivers are often still skeptical about batteries, which are the most expensive component of an electric car.
Buyers sometimes worry about electric vehicle batteries discharging due to frequent charging and discharging. However, owners of electric vehicles three to five years old don’t need to worry about this.
“Under EU regulations, electric vehicle batteries have an eight-year warranty. Manufacturers typically guarantee that the battery capacity will still be at least 70% after eight years. To my knowledge, only one model’s battery achieves this discharge rate,” said D. Jakas.
Thanks to this warranty, used electric vehicles retain a relatively high residual value even after many years of use, because one of its most important and expensive components—the battery—is under warranty. The overall warranty for an electric vehicle also helps maintain its value. For example, Kia offers a seven-year warranty. If the first owner uses the vehicle for five years, the second owner will not only enjoy the battery warranty but also the warranty for other components.
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