Recent trade-in data illustrates that electric vehicles (EVs) are depreciating at shocking rates. This predicament sheds light on the struggles of owners of these costly models. According to one recent report, some EV brands depreciate as much as 50% in the first year. This sobering figure sows doubt in would-be purchasers’ minds about whether they should make long-term commitments to electric mobility.
This is particularly well demonstrated by a $100,000 all-wheel-drive (AWD) 2024 model. After driving it for 19,623 miles, its owner recently got a trade-in quote of $63,100. This generous figure puts their recent devaluation at a whopping 37%. This places owners at risk of a significant and rapid devaluation immediately upon the acquisition.
In the same way, the owner of a new $127,000 Cyberbeast, purchased last September, has been hit with the same kind of depreciation disaster. After only eight months of ownership, the owner was given a trade-in offer of $78,200. That amount already assumes a very high depreciation rate of 38%. Together, these numbers paint a picture of an alarming trend in the EV market where steep depreciation affects consumers’ bottom-line funding decisions.
EVs trade in for less compared to private-party sales, making this issue even worse. As a result, millions of owners find themselves unable to sell or trade in their vehicles. Only to realize that trade-in offers are well below what the retail market would value their unit at. This mismatch could deter new buyers from making the leap into the EV market. As a result, it can even cause more devaluation of current models.
High depreciation rates of electric vehicles (EVs) make for good click-bait headline. They do strike an important note of caution, questioning the longterm sustainability, and indeed the longterm appeal, of EVs for consumers. Consumers want to know what the next best thing is before they make the leap into EVs. The risk of big dollar losses due to trade-ins may influence their decisions.
