Electric vehicles (EVs) are losing value at an “unsustainable” rate as a slowdown in consumer demand sends used car prices tumbling, leasing companies have warned.
The British Vehicle Rental & Leasing Association (BVRLA) warned that so-called fleet operators, such as car leasing firms and rental companies, are having to swallow large losses when reselling EVs because of “accelerated, exceptional depreciation”.
OK. They were expecting 40% depreciation, they’re seeing 65%. Capitalism, eh?
So, they’re going to have to charge the leasers more. Which will, obvs, make leasing less attractive and so reduce the sale of new EVs. Which is a problem, as this is the vast majority of the EV market.
Mr Keaney said: “We need to accelerate the take up by consumers of used EVs and therefore new EVs in the marketplace. To do that, we’re going to need to have some targeted incentives. That’s just the plain truth.”
Ah. Please Mr. Ed can we have some taxpayers’ money?
Err, no, bugger off.
Consumers have worked this out, to the amazement of these companies:
Never buy an used EV.
One has no idea of the battery state or life expectancy.
One piece of regulation that would be usful, is a standard test to say what state the battery is in when it’s on the forecourt.
Depreciation for EVs that aren’t Teslas has always been a problem. Back in 2016 you could pick up a 3-year-old Nissan Leaf with 25k miles on the clock for 75-80% off new list price. The other non-Tesla EVs that sold in enough volume pre-2017 to make statistics reasonable for 3-year-old vehicles in 2020 were the Renault Zoe and BMW i3. While not quite as ruinous as the Leaf, they were also 60%+ down over 3 years.
The outliers were the Teslas. Because of the supercharger network, people in the “we occasionally do long journeys” brigade will consider one, thus the addressable second-hand market was a lot larger than the “we want a runabout and have another car for long journeys” market. When a load of other manufacturers — none of whom had their own well-regarded charging network — were kicked onto the bandwagon, the leasing companies decided to compare the residuals to Teslas, not even thinking about what the residual market would look like if the second-hand EV supply increased 10x over what it was at that point.
And the other massive problem is the type of cars. Porsche Taycans now start at £40k-ish used on Autotrader. It’s a rich man’s toy. The genuinely rich who are in that market will buy a new one and spec it to exactly their taste; for anybody else spending that kind of money on a car, they’re going to use it a lot. Which means long journeys, not wanting to worry about whether the next charger is available/working. Somebody who does fit that description and is willing to spend 30 minutes recharging every 250 miles will buy a Model S. Which haven’t depreciated anywhere near as much. In the mean time, cars whose use case is hardly ever going more than 50 miles from home haven’t lost much more proportionally than their petrol counterparts.
These numbers probably demonstrate how badly the leasing companies have screwed up by leasing the wrong cars… total numbers for sale on Autotrader:
Vauxhall Corsa-e : 430
MG ZS (electric models only) : 419
Porsche Taycan: 696
As the generous BIK regime obviously isn’t working will TTK (ok RR technically) provide a further incentive in October by reversing the planned staged increase to 5%. It’s hardly a big earner.
Having said that the problem is close to net zero uptake by private users.
The changeover to electric cars is dead in the water. For the foreseeable future they’re never going to be more than a niche market. If nothing else, the UK’s 20 years away from having the generating & distribution capacity to charge the things. If then. It’s purely a matter of waiting whilst the politicians adjust to reality. Which they will have to do. They’ll have no option.
It’s going to be the same right across Europe. I know this country. Spain’s distribution network is barely capable of supporting Spain’s electricity needs now. Half the countries in Europe are similar when you get outside their big cities.
They can create whatever incentives they like. I’m not buying a white elephant. No further discussion necessary. No, non, he, niet,
We used to have a profitable car industry, but now it’s been Milibanded.
Next up: your central heating.
At least we still have Ed Miliband, and Ed Miliband’s beady little eyes and adenoidal twattery, tho. That’s some comfort in the dark nights that lie ahead.
BiS
why go outside the big cities? Maybe that’s true for Spain where a lot of infra and real estate is surprisingly new but in most european cities the problem is even worse in large cities and more difficult to upgrade as you have to dig up streets and stuff.
I was just reading about how dealers were having problems with selling enough EVs. This is part of the same thing.
They’re pushing for EVs sold to be a much larger percentage of the market in the near future. There’s now also many more used EVs out there to be bought.
So the supply of both new and used EVs is larger. But the demand isn’t.
Why buy used when both dealers and governments are giving large incentives to buy new?
Electric vehicles (EVs) are losing value at an “unsustainable” rate…
I thought they were the sustainable future of motoring.
Like sustainable wind/solar energy that cannot sustain electrical output.
We now have regenerative farming which I thought we had had for at least the last 5 000 years, otherwise how did farms carry on continuously?
EVs are the automotive equivalent of the latest iteration of Dr. Who… A product built for the “modern audience/customer” that exists only in the imagination of The Woke.