I was shocked when I saw the Wired headline scream at me this morning, "EVs Are Losing Up to 50 Percent of Their Value in One Year," but on reflection, maybe I shouldn't have been.
Depreciation can be tough for new cars. The rule of thumb is that the typical new car loses 15% of its value just as soon as the buyer drives it off the lot. That changed in recent years when lockdown-related supply-chain issues caused used car prices to spike to record highs, but they seem to be returning to normal now.
Let's get back to that Wired report because the numbers must seriously frustrate EV owners looking to trade in their used EV on a new one — or just ditch it for a nice, traditional, gas-powered vehicle.
"In the UK," Wired found, "various new electric cars lose 50 percent of their value in the first 12 months. Yes, you read that right—"some EVs depreciate by 50 percent in a single year." Tesla's popular Model 3 fell "by 45 percent in its first 12 months and 10,000 miles, while the Porsche Taycan fell by 49 percent and the Hyundai Ioniq 5 lost exactly half in the same period."
"Although initial depreciation isn’t as brutal in the U.S. as the UK, there are still plenty of deals to be had," Wired found — which is great for people looking to buy a used EV but not so great for people who bought their EV new.
"Wired found a fully-loaded 2020 Taycan Turbo with just 5,000 miles on the clock for $92,000—a saving of $86,000 on the original purchase price. That’s the equivalent of more than $17 per mile in depreciation."
Ouch!
Lower total cost of ownership (TCO) was supposed to be a big reason to love EVs. A Tesla has just 18 moving parts between the battery and where the rubber meets the road, so it was thought that EVs would be cheaper to maintain, leading to lower TCO. But that isn't panning out in the real world. iSeeCars found earlier this year that "EVs are the most expensive vehicles to operate over 1,000 miles."
"People drove EVs an average of 10,256 miles during that period, seeing costs of $5,108 per 1,000 miles, according to the study. "In contrast, owners drove gas vehicles 12,813 miles, averaging $3,123 over the same distance."
I'd add that EV prices, while typically higher than ICE vehicles, are often subsidized with your tax dollars.
This last detail from Wired might have EV owners fuming:
A June 2024 study, also from iSeeCars, found used EV prices had fallen below gas-powered cars for the first time. Having analyzed more than 2.2 million used cars between May 2023 and May 2024, iSeeCars found the average used EV had fallen from $41,000 to $28,800, while the average gas car had fallen only slightly, from $32,700 to $31,400.
For what it's worth, I looked up my car on Kelly Blue Book just now, and it has depreciated nearly 50% — after four-and-a-half years. And, of course, it has a gas engine.
There's something about EVs that is crushing the used market.
Is it the limited number of battery recharges before driving distance is seriously degraded? Is it the shockingly high TCO? Or is the market for EVs still made up largely of wealthier-than-average enthusiasts?
All three?
Exclusively for Our VIPs: Underappreciated Albums: 'But Beautiful — Standards: Volume I'
P.S. Once again, let me thank you for being a VIP or VIP gold supporter. But I do have some bad news. Stephen Kruiser's Thursday travel plans got all mangled up, so there will be no Friday edition of Five O'Clock Somewhere today. We'll see you on Monday — with Kruiser reporting in from lovely Ann Arbor, Mich.
