EVs Depreciate Fast. Here’s Why That’s A Problem

Falling Values

A common car-buying axiom is that any vehicle will lose value the moment it is driven off the lot. The loss of value over time is called depreciation. And it’s particularly true for electric vehicles (EVs), according to a new report.

The average EV has nearly halved in value over the past five years, compared to an average depreciation rate of less than 40% for all vehicles, according to an analysis by used car search engine iSeeCars. Some models have even lost up to 50% of their value in just one year, according to additional reporting by Wired. Technology is part of this problem. Because of the pace of technological innovation, EVs become “outdated” faster than traditional gasoline-fueled cars.

Navigating EV Purchases

Encouraging the adoption of electric alternatives, including EVs, has become a political priority. But while sales growth is relatively strong, adoption faces roadblocks, such as concerns over vehicle range, charging infrastructure, and higher prices relative to gas-powered vehicles. Rapid price depreciation could become another cause for concern.

Shoppers considering an EV may want to explore used models, which could be available at a significant discount. Despite the reported accelerated depreciation in the first years, software updates and operating efficiency can help EVs hold their value over the long term.

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