Latest news with #depreciation
Daily Mail
5 days ago
- Automotive
- Daily Mail
Report: Electric cars lose more than half their value in two years
Electric cars are losing more than half their value within two years, according to a new report. Analysis by Cox Automotive has suggested that a 24-month-old battery car sold to the trade in April on average retained just 47 per cent of its original new cost. However, two years earlier, an EV of the same age profile was - on average - holding on to 83 per cent of its new price. The dramatic acceleration in depreciation is being blamed on manufacturers who are caught in an unprecedented catch 22 scenario currently playing out in the automotive sector. With car makers being forced to increase their sales of EVs to meet Government-mandated targets, they are offering huge discounts on new models to make them more attractive to new customers in order to meet their quotas. But this is having a significant knock-on impact for residual prices, as drivers are seeing more value for money buying new rather than opting for a nearly-new second-hand EV, which has seen used prices tumble. The Zero Emission Vehicle (ZEV) mandate introduced to law last January requires mainstream car manufacturers to sell an increasing share of EVs every year between now and 2035. Failure to adhere to these quotas can result in significant fines of £12,000 for every car sold below the required threshold for that year. In 2024, the minimum quota was for 22 per cent of all deliveries by manufacturers to be zero-emission electric cars. However, the target jumps to 28 per cent this year, 33 per cent in 2026 and 80 per cent by 2030. Officials reported that every mainstream brand achieved last year's 22 per cent EV sales mix - though at a huge cost to car companies. The Society of Motor Manufacturers and Traders (SMMT) reported that makers lost a collective £4billion in discounted prices as they tried to make electric cars appear more attractive to petrol and diesel counterparts. Mike Hawes, chief exec at the trade body, described the scale of these discounts as 'unsustainable'. Labour's decision to force EV owners to pay car tax for the first time from April has also dampened demand for new models - and triggered further manufacturer discounts. Both Vauxhall and Abarth - the performance division of Fiat - have recently reduced prices of their electric cars so that they sit below a £40,000 expensive car tax supplement being imposed on new EVs starting from next year. But Cox Automotive Europe discounts are now having a huge knock-on effect on the second-hand market, because 'nearly new' used EVs are falling in value as a direct result. Second-hand electric vehicle prices are also taking a hit from the huge acceleration in available models coming to market, with March seeing a record 69,313 new electric cars entering the road. A rapid development of battery technology is also stinging the value of quickly outdated older EVs, while the emergence of new cheaper brands - predominantly from China - is also pushing second-hand values lower. As such, a two-year-old electric car today is now holding just 53 per cent of its original price. In contrast, the average diesel car selling to trade with the same age profile is retaining 30 per cent of its new value. When second-hand EV values were at their peak in 2022 - as a result of supply constraints around the Covid-19 pandemic - a two-year-old electric car was losing only 17 per cent of its showroom price. Philip Nothard, insight director at Cox Automotive Europe, 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. '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.' On the flipside, EVs between three to five years old are performing much better. At auction, these vehicles have seen only a modest price drop of 15 per cent on average in the same time period as they aren't impacted as severely by heavy manufacturer discounts and tend to attract a different driver. Last month, Prime Minister Sir Keir Starmer was forced to water down Britain's electric vehicle sales targets in response to Donald Trump's watershed tariff announcement. The PM's new measures included additional leniencies in the ZEV mandate in a bid to 'support car makers'. And only last week, a leaked letter from transport minister Lilian Greenwood revealed that the Government is considering dumping the expensive car supplement - widely being referred to as the 'Tesla Tax' - for new electric cars in an effort to stir up more demand for green vehicles.
Daily Mail
5 days ago
- Automotive
- Daily Mail
Used electric cars lose half their value in two years - manufacturers blamed for discounting new prices
Electric cars are losing more than half their value within two years, according to a new report. Analysis by Cox Automotive has suggested that a 24-month-old battery car sold to the trade in April on average retained just 47 per cent of its original new cost. However, two years earlier, an EV of the same age profile was - on average - holding on to 83 per cent of its new price. The dramatic acceleration in depreciation is being blamed on manufacturers who are caught in an unprecedented catch 22 scenario currently playing out in the automotive sector. With car makers being forced to increase their sales of EVs to meet Government-mandated targets, they are offering huge discounts on new models to make them more attractive to new customers in order to meet their quotas. But this is having a significant knock-on impact for residual prices, as drivers are seeing more value for money buying new rather than opting for a nearly-new second-hand EV, which has seen used prices tumble. This graphs shows the average auction sale price for EVs under 24 months old as a percentage of their original cost new, with the typical electric car retaining just 47% of its showroom price The Zero Emission Vehicle (ZEV) mandate introduced to law last January requires mainstream car manufacturers to sell an increasing share of EVs every year between now and 2035. Failure to adhere to these quotas can result in significant fines of £12,000 for every car sold below the required threshold for that year. In 2024, the minimum quota was for 22 per cent of all deliveries by manufacturers to be zero-emission electric cars. However, the target jumps to 28 per cent this year, 33 per cent in 2026 and 80 per cent by 2030. Officials reported that every mainstream brand achieved last year's 22 per cent EV sales mix - though at a huge cost to car companies. The Society of Motor Manufacturers and Traders (SMMT) reported that makers lost a collective £4billion in discounted prices as they tried to make electric cars appear more attractive to petrol and diesel counterparts. Mike Hawes, chief exec at the trade body, described the scale of these discounts as 'unsustainable'. Labour's decision to force EV owners to pay car tax for the first time from April has also dampened demand for new models - and triggered further manufacturer discounts. Both Vauxhall and Abarth - the performance division of Fiat - have recently reduced prices of their electric cars so that they sit below a £40,000 expensive car tax supplement being imposed on new EVs starting from next year. But Cox Automotive Europe discounts are now having a huge knock-on effect on the second-hand market, because 'nearly new' used EVs are falling in value as a direct result. Second-hand electric vehicle prices are also taking a hit from the huge acceleration in available models coming to market, with March seeing a record 69,313 new electric cars entering the road. A rapid development of battery technology is also stinging the value of quickly outdated older EVs, while the emergence of new cheaper brands - predominantly from China - is also pushing second-hand values lower. As such, a two-year-old electric car today is now holding just 53 per cent of its original price. In contrast, the average diesel car selling to trade with the same age profile is retaining 30 per cent of its new value. When second-hand EV values were at their peak in 2022 - as a result of supply constraints around the Covid-19 pandemic - a two-year-old electric car was losing only 17 per cent of its showroom price. Philip Nothard, insight director at Cox Automotive Europe, 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. '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.' On the flipside, EVs between three to five years old are performing much better. At auction, these vehicles have seen only a modest price drop of 15 per cent on average in the same time period as they aren't impacted as severely by heavy manufacturer discounts and tend to attract a different driver. Last month, Prime Minister Sir Keir Starmer was forced to water down Britain's electric vehicle sales targets in response to Donald Trump's watershed tariff announcement. The PM's new measures included additional leniencies in the ZEV mandate in a bid to 'support car makers'. And only last week, a leaked letter from transport minister Lilian Greenwood revealed that the Government is considering dumping the expensive car supplement - widely being referred to as the 'Tesla Tax' - for new electric cars in an effort to stir up more demand for green vehicles. Nothard added: 'The used market is a crucial source of profitability for the automotive sector. 'Within increasingly volatile market conditions, the strength and consistency of used operations are crucial. 'To ensure this, more support for the used EV sector is needed to put the brakes on the rapid pace of depreciation.'
Telegraph
6 days ago
- Automotive
- Telegraph
Electric cars halve in value after just two years
Cox Automotive said the faster rate of depreciation among 'nearly-new' EVs was being driven by the discount wars being fought by manufacturers, which have been aggressively cutting prices to help them meet net zero sales targets. Under the so-called zero emission vehicle (ZEV) rules which are mandated by the Government, 28pc of new car sales are meant to be electric this year with the target set to rise gradually until it reaches 80pc in 2030. The falling value of EVs is also being accelerated by the growing range of cheaper models available on the market. The average price of a second-hand EV fell from £39,849 to £24,908 between April 2022 and April 2025, according to Autotrader. Philip Nothard, of Cox Automotive Europe, said used-car prices reached a peak in 2022 as the pandemic squeezed global supplies of new vehicles. But he added: '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. '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.' Compared with nearly-new models, Mr Nothard said that 'middle-aged' EVs between three and five years old were faring better. These only saw their prices fall by about 15pc over a similar period when they were sold at auction, Mr Nothard said. Brands made price cuts worth £4bn on new cars last year, equivalent to a discount of about £11,000 per car, according to the Society of Motor Manufacturers and Traders. While discounting is a common practice, the level of discounts on EVs has been higher than those for petrol and diesel cars, according to Autotrader. Falling EV values are positive for consumers, but the accelerated drop has become a cause of concern within the car industry. Fleet operator fears Fleet operators such as car rental companies, which accounted for two thirds of all new car purchases last year, tend to buy new vehicles and sell them on after two to three years. The growing drop in resale values means they risk recovering far less of their initial investment than anticipated. In 2023, the EV leasing firm Onto collapsed into administration as it was forced to write down the value of its 7,000-strong fleet by £21m in a single year. The British Vehicle Rental & Leasing Association (BVRLA) last year warned that many fleet operators were having to swallow large losses when reselling EVs because of 'unsustainable' depreciation. It said rising depreciation costs could force leasing companies to raise prices for consumers, in order to better shield lenders from losses. The BVRLA has called for the Government to intervene with market stimulus measures, including potentially a VAT cut or grants for used car buyers. Mr Nothard said: 'The used market is a crucial source of profitability for the automotive sector. 'Within increasingly volatile market conditions, the strength and consistency of used operations are crucial.
TechCrunch
25-05-2025
- Automotive
- TechCrunch
Tesla opened Cybertruck trade-ins, and the numbers aren't pretty
In Brief Per Inside EVs, Cybertruck owners are now allowed by Tesla to trade in their cars for the first time since they hit the market – but they'll incur a heavy hit in the process. CarGurus recently showed depreciation rates of up to 45%. Meanwhile, Business Insider talked this past week with two owners who shared firsthand what value Tesla has assigned their Cybertruck. One owner, who bought a $100,000 AWD 2024 model and accumulated 19,623 miles, received a quote for $63,100 (a 37% depreciation); the other purchased a top-of-the-line $127,000 Cyberbeast last September was shown a quote for $78,200, which would amount to a 38% loss after eight months. Tesla initially banned owners from reselling the vehicle – a policy typically used to prevent scalping of high-demand vehicles and to maintain brand control. In Tesla's case, it may also have delayed a wave of trade-ins or resales from owners facing a backlash owing to Elon Musk's high profile in the Trump administration or frustrated with ongoing quality control issues, which have included runaway gas pedals and falling trim pieces. Worth noting: trade-in figures are typically lower than private-party sales, and EVs as a category depreciate fast. According to Wired, some brands can lose up to 50% in year one.
Fast Company
21-05-2025
- Automotive
- Fast Company
Tesla's Cybertruck is officially a flop
We've known since launch that the Cybertruck is a flop. Sales have been residual after they peaked at 5,175 units registered in July 2024, gradually falling to just 2,000 units sold in April 2025. The dip has been so deep that the Boring Company would have a hard time reaching the bottom of its sales chart pit, which has totaled 46,000 units since production started in late 2023. Now we have learned that things are getting worse for Cybertruck owners: The Cybertruck has depreciated by 45% after only one year, according to Car Guru. The depreciation is so bad that Tesla wasn't accepting its own children as trade-ins until three days ago, as the Cybertruck Owners Club found out. According to an estimate obtained in Tesla's app by an owner, a $100,000 AWD Foundation Series with about 6,200 miles on the odometer is now worth $65,400. That's a 34.6% drop in its value in just one year (on average, cars depreciate around 30% in the first two years). Worse, as Electrek points out, 'it's also worth nothing that Tesla's online 'trade-in estimates' are often higher than the final offer.' The reason may be as simple as the fact that few people want a Cybertruck. We have reported on its many design and quality failures: Doors that sever fingers, a gas pedal that can cause uncontrollable acceleration, falling trim pieces that can cause accidents. Those are just a few examples in a seemingly never-ending timeline of problems that has resulted in eight recalls since its debut. Surprise! It depreciates This polygonal nightmare is flailing, and it should come as no big surprise. There were signs of what is happening now back in May 2024, when the price of secondhand Cybertrucks cratered a few months after initial hype and limited production drove up the truck's resell price to double or triple its original $102,235 price tag. This tracks Tesla's own stock, which has been similarly inflated with a price-to-earnings ratio of 188.13 as of May 19, meaning that the company's share price trades at 188.13 times its earnings per share. For comparison, BYD—the leading EV manufacturer in the world—has a PE ratio of 27.67. As Tesla increased the production volume, the demand began to fall fast, leading to unsold inventory and forced production slowdowns that left assembly lines empty, with workers taking leave or doing other tasks. Demand was so low that used car dealers reduced purchases, contributing to the rapid depreciation. Musk once claimed that Tesla cars would increase in value, which turned out to be false. Like nearly every other car on the planet except collector pieces, Tesla's cars have depreciated in value. But the regular depreciation has now accelerated for the entire brand. Tesla Model 3 and Model Y vehicles experienced the most significant depreciation among the top 200 car models in 2024. Tesla experienced a 71% decline in net income and a 13% drop in EV sales in Q1 2025. The company is facing a critical moment due to stagnant design, outdated technology, and declining sales. The Cybertruck is the epitome of this problem. My prediction? Soon there will be a few thousands of these hideous trucks in an underground parking lot with no exit. A new Musk grave with a big tax write-off sign on the front.
