How does electric car depreciate compared to a gas car?
How does electric car depreciate compared to a gas car?
Posted on July 8, 2022
Electric vehicles depreciate in value like any other Internal Combustion Engine cars (ICE). However, research has shown that electric cars depreciate faster in value than any other gas-powered cars.
The most significant depreciation in any car should be noticed within the first three years of purchase. According to iSeeCars study, an EV owner should expect a 52% depreciation on a vehicle within its first three years after purchase.
They should also depreciate as high as 89% after 5 years of its initial purchase, while an ICE should expect a 39.1% purchase after its purchase in that same amount of years.
Not all-electric vehicles depreciate faster than gas cars. Electric vehicles produced by Tesla are known to hold more value than the electric car industry standard.
According to iSeeCars Tesla, entry-level model 3 depreciates by 10.2% in its first 3 years, which is so low compared to other EV or gas-powered vehicles.
EVs from Ford, Kia and others are soon catching up to Tesla as more used models hit the market.
Why do electric cars depreciate so quickly compared to ICE?
Electric vehicles are not so widely known yet. Their lack of popularity has made their demand low compared to gas-powered vehicles, leading to their depreciation in value.
That higher initial cost means a higher used cost, which is still putting people off.
Once we know more about how EVs age and how long batteries and motors last, our confidence will build and we’ll be much happier buying them used.
Then the price of used models will be equal to, or exceed that of ICE while gas engines are still around.
Battery deterioration is also one of the key factors to an electric vehicle getting depreciated; in an electric vehicle, after a couple of years, the battery capacity won't be as strong as it was once.
It would have deteriorated and not last long on a journey as it used to which is one of the main reason EV depreciates faster than ICE'S.
With The Depreciation Rate, Should Electric Cars Still Are Bought?
Due to the electric vehicle depreciation rate, many people ask if EVs should be avoided. Electric cars and other alternatively powered vehicles like fuel cells are the car industry's future.
Electric vehicles are undoubtedly progressing as more cities and communities open up to the idea and government incentives.
Tesla and Lucid are changing the story of EVs and their depreciating value; electric vehicle depreciation would likely stabilize and gain popularity. Therefore, it can still be bought.
Thanks for reading. Be sure to connect with us on Facebook, Twitter, Instagram, or LinkedIn to stay up to date on our latest great articles!