Warning to EV drivers as cars' value PLUMMETS after just two years – are you set to lose thousands?

The Irish Sun

6 days ago

EV DRIVERS face losing thousands in the first two years of buying a car as manufacturers scramble to meet net zero targets, experts have warned.
The average electric vehicle will reportedly retain just 49 per cent of its value after 24 months - a dramatic dip on the 83 per cent in 2022.
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Electric vehicles are becoming a much less secure bet if consumers or companies are looking to resell, compared to the more robust petrol/diesel market
Credit: Getty
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Many are pointing towards the governments "zero emission vehicle mandate" to explain the drop in second hand EV prices
Credit: Getty
Diesel and petrol cars, in comparison, typically retain 70 per cent of their value, a whopping 20 per cent more than their supposedly higher-tech counterparts.
This collapse in the second hand EV market has likely been triggered by a trend of mass-discounts applied by car markers trying to meet government net zero standards for EV sales.
The governments "zero emission vehicle mandate" rules that 80% of new cars sales must be EVs by 2030, with the goal of 100% by 2035.
If manufacturers fail to meet this target, they may be liable for a cash fined levied according to the number of vehicles short they are.
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The EV market is also being affected by a steep rise in competition, with cheaper models slashing the average price from nearly £40,000 down to less than £25,000 between 2022-2025, according to Autotrader.
Philip Nothard, of Cox Automotive Europe,
However, Mr Nothard also said: "
The current performance of nearly-new EVs in the used market is still much lower than we would anticipate for vehicles in this age profile.
'The heavy discounts offered on new vehicles mean that
consumers can pick up a brand-new model
for the same price as a nearly-new model.
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'This gives consumers very little incentive to consider them, which is a real blow to a market that needs all the incentives it can get its hands on.'
Mr Nothard added that "middle-aged" EVs, between three to five years old, were holding their value considerably better in recent years, only dipping 15% in resale price.
The first-ever all-electric MINI JCW Aceman
Discounting of new EVs has seen £4 billion slashed from price tags last year, amounting to an average of £11,000 per vehicle, according to the Society of Motor Manufacturers and Traders.
Although these tumbling prices are good for consumers, the rate of reductions has sparked concern in elements of the car industry.
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Fleet operators, such as car rental companies, are particularly vulnerable to these market changes.
Accounting for two thirds of all new car sales, car rentals usually buy their vehicles new every few years, relying on the resale market to makeup some of these costs.
With this market plummeting, companies are have to take deep cuts to profits when updating their fleets.
I
n 2023, the
EV leasing firm Onto fell into administration
after it was forced to write down the value of its 7,000-car fleet by £21m that year.
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The British Vehicle Rental & Leasing Association (BVRLA) last year warned that many similar companies were experiencing heavy losses when reselling EVs because of this 'unsustainable' depreciation.
Consumers may have to foot some of these rising costs in order for leasing companies to remain trading positively.
The BVRLA has since made a plea to the government for intervention, calling for market stimulus measures to prop up faltering industries.