EVs hit with falling resale value as consumer demand cools

Mint

25-04-2025

Electric cars are losing the battle to their conventional fuel counterparts in India's used-car market, as their resale value is simply not matching up to expectations despite having fewer moving parts, with battery concerns and influx of newer electric models playing their part.
According to used car aggregator platform Spinny, if an electric model made in 2023 is resold today, its price would have fallen somewhere about 23%. Comparatively, ICE (internal combustion engine) model would see 20% depreciation.
Used car marketplace CARS24 says that while three-to-five year-old popular ICE car models retain more than 50% of their original value, the same is not the case with EVs.
In fact, data sourced from Spinny suggests that the gap between the two widens when it comes to older models. For instance, a 2020 EV model would lose about 46% in value compared to 40% for an ICE model of the same vehicle manufactured in the same year.
Two factors are contributing to this. Consumers' discomfiture with battery longevity and replacement cost, and more attractive electric cars being launched at similar price points to older cars.
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'Automakers expect that ideally the resale value of electric vehicles should be higher than ICE vehicles as there are fewer parts, but that's not how the market is evolving," Hanish Yadav, senior vice president & business head at Spinny, said. 'The question over battery health still remains, which is creating uncertainty for resale value of electric vehicles."
A 2024 International Forum for Environment, Sustainability and Technology study pointed out that EVs could have 45-84% fewer parts than an average ICE vehicle.
'ICE cars currently lead in value retention due to their well-established ecosystem, ease of maintenance, and wider buyer
trust
," Gajendra Jangid, Co-Founder of CARS24, said. 'Popular models like Maruti Swift, Santro, Wagon R, and Tiago NRG regularly fetch above 50% of their original price even after 3-5 years of usage."
At car dealerships, where old cars are frequently handed to dealers for a discount against the purchase of a new vehicle, EVs appear to be struggling even more.
A Delhi-based car dealer said they gave
₹
9 lakh in exchange value for a six-year-old diesel vehicle of about
₹
18 lakh. 'But a two-year-old EV car of original price of around
₹
15 lakh given to us by a customer got about only
₹
5 lakh back," this dealer said. 'If a customer plans to sell a vehicle within a few years, we don't suggest buying electric vehicles for now."
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The lack of strong resale value–a key factor in purchase decisions for Indian car buyers–has implications for consumer demand as well. A recent study by Deloitte–2025 Global Automotive Consumer–said at least one in five car buyers flags uncertain resale value as one of the reasons for holding back on EV purchase.
Deloitte's study also said that only about 8% of consumers said they would prefer a battery-powered electric vehicle, a decline from 10% recorded in Deloitte's 2024 study.
In 2024, the country witnessed a 20% jump in electric car sales to reach nearly 100,000 units compared to the previous year, according to data from car registration portal Vahan. However, the penetration of EVs in the car market remains low at around 2.5%.
ICE cars' market leader Maruti Suzuki India Limited has its own insights. Partho Banerjee, the company's senior executive officer-marketing and sales noted recently that consumers are not seeing EVs as their primary car.
'EVs sold today are not primary cars, but secondary," he said during a media briefing on 1 April. 'Till the time we don't solve customer concerns on range, charging infrastructure, and post-sales, buyers will not have confidence."
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The continuous fall in value of electric vehicles is affecting car manufacturers as well. 'OEMs also bear the burden of diminished returns, particularly when resale concerns deter buyers or require the rollout of buyback and resale assurance programs," Saket Mehra, partner-risk and leader for automotive & EV at Grant Thornton India.
To counter resale concerns, EV manufacturers are coming up with their own offers. Tata Motors, the country's largest electric vehicle seller, has looked at exchange offers on cars along with facilitating trade-in of vehicles (price of old vehicle credited in the price of new vehicle to give the customer a discount).
JSW MG Motor India runs a dedicated programme called 'MG Reassure' to offer its existing customers a better resale value. For instance, the Gurugram-based company has a buyback offer for customers of MG Windsor wherein they are assured they will get 60% of the car's original price on return after three years.
Experts believe that electric technology needs to first stabilise before the used EV market can pick up pace.
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'Currently, as innovation in the EV space picks up pace, consumers are getting much better products at similar price points compared to earlier models," Yadav said. 'As a result, people are hesitant to buy older EVs. However, this trend could stabilize once the technology matures and customers gain more confidence in electric vehicles."