Stunning Deals On Used Electrical Cars … At The Expense Of 1st Owners
Editor’s note: No doubt about it – early adopters deserve a fine amount of credit for helping to usher in fresh, better tech. In Steve’s article below, he highlights the costs that early adopters (buyers) of electrical cars pay for bringing society one step closer to clean transportation. However, I think it’s significant to highlight that the spin side of swift depreciation of electrical cars is that there are wonderful deals on the used car market. Just head over to CARFAX and search out a Nissan LEAF, BMW i3, or Chevy Volt, and then read on to love this Gas2 repost.
There are BMW i3s selling for
$20,000. There are Chevy Volts selling for
$Ten,000.There are Nissan LEAFs below $7,000 and one below $6,000! Superb buys for people looking for a used car. It’s no wonder the Leaf is one of the car models quickest to sell once hitting the used car market. (Naturally, lower prices come with certain degradations in value, but the general story is that you can get a lot more value for $1 from used electrical cars than pretty much any other cars.) -Zach Shahan
Wondering about buying an EV? Maybe you want to do your part to save the planet. Or maybe you are just tired of paying for gasoline. You could be attracted by the instant torque and quiet rail. But how much will an electrical car actually cost you?
Clever shoppers know the true cost of an automobile includes lots of factors. Purchase price is just one of them. They include fuel, interest, insurance, taxes, maintenance, and repairs. Then there is the big one – resale value. Until you know what your car will be worth when you sell it or trade it in, you indeed have no idea how much it will cost you to own.
Sadly, if we are talking about an EV, the response is likely to be bad news. According to Anil Goyal, senior vice president of operations for used car pricing service Black Book, a three-year-old, off-lease Nissan LEAF wholesales for inbetween $6,000 and $7,000. That’s less than 20% of its original sticker price. A similar car with a gasoline engine usually sells for around 50% of its MSRP. A five-year-old LEAF is worth a dismal 11% of sticker price.
Okay. You’re right. The calculations are skewed because they don’t take into account the federal tax credit available for electrified cars ($7,500). Please don’t shoot the messenger. But there is no denying that low resale values mean the business case for buying a fresh EV is tighter to make.
The only bright spot in the EV picture for new-car buyers is the Tesla Model S (there are precious few used Model X cars for sale, so we can’t comment on that yet). Black Book says a 3-year-old Model S is worth 62% of MSRP. Why the difference? “To be under twenty percent [for a three year old LEAF] is fairly telling,” says Goyal. “A lot of it has to do with request.” Lots of people want a used Tesla. Not so many want a used LEAF.
There are several reasons for the difference. Very first, the rhythm of development for electrical cars, especially in battery capacity, is fairly rapid. Many people recall when private computers very first became popular. The technology was improving so quickly that the machine you bought in the morning was obsolete by the time you got it home and set up. Only Tesla has over-the-air wireless updates that keep all its cars as technically up to date as possible.
2nd, range is a factor. That used LEAF may only be able to drive about sixty miles before the driver feels the urge to recharge it. Any car that won’t go at least one hundred miles on a total battery has limited appeal to used car shoppers, Goyal says. That eliminates the original LEAF and the original BMW i3, as well as all the fully electrical compliance cars like the Volkswagen e-Golf, Fiat 500e, and Mitsubishi i-MiEV. Every Tesla ever made can go far more than one hundred miles on a single charge.
Third is styling. Toyota began it by making the Prius look different from other cars on the road. The idea was to make it stand out from “ordinary” cars. It worked well for Toyota (after many years), so Nissan did something similar with the LEAF. People who own a LEAF are generally glad with their cars, but few would call it beautiful.
Not so with Tesla. Elon Musk has learned well from Apple. Everything he touches has to be appealing to the eye, even if it is a home battery storage system that sits in the basement. The Model S is an attractive car. It still looks good today, almost five years after it very first went on sale. The LEAF just looks dated alongside contemporary cars.
Fourth is the proprietary network of Supercharger super-fast charging stations that a Tesla proprietor can access when away from home. Buyers of other used electrical cars are left to fend for themselves as they attempt to navigate through a elaborate labyrinth of charging options. In the final analysis, Tesla’s decision to build its own charging network maybe the most brilliant business decision of the 21st century.
Will used EV prices ever rebound? There are a lot of fresh models coming to market soon. And of course the supply of used Teslas won’t stay low forever. The bottom line is that people are not going to lush down their hard-earned money on a car with awful resale value just to save a few bucks at the pump. Even the most dedicated treehugger doesn’t want to be stuck with a car nobody wants once the honeymoon is over.
Tesla is eating everybody else’s lunch. The others have to figure out how to make cars that people want to own even after the “fresh” wears off. A big part of that would be a commitment to building a charging infrastructure that is ordinary to use with enough chargers for everyone. Instead, they are sitting around with their palms in their pockets waiting for the taxpayers to shoulder the cargo.
It’s a matter of attitude. The conventional auto companies still see electrified cars as a necessary evil, a fad that will pass eventually. They will build enough of them to please regulators, but their hearts are still married to the golden era of the automobile when cheap gasoline for internal combustion engines was the order of the day. By the time they awaken from their long nap, Tesla may be the superior force in the industry, if it isn’t already.
Check out our fresh 93-page EV report, based on over Two,000 surveys collected from EV drivers in forty nine of fifty US states, twenty six European countries, and nine Canadian provinces.