Plug-in electric vehicles are getting hit with depreciation of their resale values. Many of these electric vehicles (EVs) are coming off lease this year, which presents a real challenge for manufacturers’ finance arms and other financial institutions who wrote the leases. It’s also affecting consumers who purchased the EVs and might be trading them in at a dealership or selling them to private parties; it’s also tough for retailers (dealers) who own these cars, through trade ins or buying them at auctions, and want to sell them at a decent profit margin. NADA Used Car Guide and Black Book are seeing those trends and have reported on it last week. The Tesla Model S is holding its value on the market, but other EVs are vulnerable. For owners of used EVs looking at their options, market research and consulting firm Morpace has asked electric vehicle owners for tips on how to move the metal.
NADA Used Car Guide’s Larry Dixon thinks that used vehicle buyers tend to lean more toward frugality than new vehicle shoppers. With that, concerns over upfront cost and long-term durability are more amplified. Black Book’s Anil Goyal sees gasoline prices as the key driver. “Smaller cars have experienced heavier depreciation over the last 12-18 months, but it’s clear that the small mainstream electric vehicles are experiencing even heavier valuation drops,” Goyal said in a Black Book commentary.
Current electric vehicle (EV) owners interviewed by Morpace are passionate about their plug-in cars, but are not too interested in buying a used one according to an analysis piece by Eric Roach, research director at Morpace. Buying a new EV is more likely for them. Morpace presented questions to its MyDrivingPower community, which is comprised of more than 250 U.S.-based EV owners. They did have a lot to say in suggestions to automakers and dealers on what they can do to make used EVs stronger in the market:
• Educate dealer staff with their own driving experience – One way to improve their credibility about EV knowledge suggested by respondents was that sales staff actually drive the vehicles themselves to become familiar with the product. Knowledge and some level of expertise on EVs is expected to come from the dealership and the people who are selling them.
• Provide a warranty on the battery or replace it – To deal with concerns over expensive battery packs, replacement or a 5-6 year warranty on the battery was suggested. This warranty would be expected to cover replacement costs, repairs, and guarantee a minimum battery range per charge. It would work best if the dealer is seen to be transparent, proactive, and straight forward about the battery and range for consumers to consider buying a used EV.
• Report charge cycles – EV owners want to know more about battery lifecycle, and they see the need for an indicator that provides the number of times a battery has been charged to date (equivalent to mileage on an internal combustion engine). Survey respondents think that more consumer confidence in used EVs would be supported by knowing the total number of cycles on the life of the battery and the number of cells still remaining.