My Car Quest

August 17, 2022

Are Electric Vehicle Resale Values a Problem?

by Mike Gulett –

In the recent article here, When the Bloom Comes Off the Electric Vehicle Rose the author, Wallace Wyss, mentions that the benefits of electric vehicle ownership may not be what we were all told, which is amplified by comments from several readers.

Another issue that I have not seen mentioned is the problem with EV resale values caused by the degradation of the battery to the point where it is eventually not useable. Considering that the battery is a significant part of the total cost of an EV this is important.

I think we have all experienced the situation where the battery in our smart phone or notebook computer degrades over time to where it must be replaced. This also happens in EVs where it is very expensive to replace the battery.

Determining the battery health of a used EV may not be easy because the battery health is determined by more than just the milage. The history of driving conditions and driving environment are also important as is the charging history. But if you are buying a used EV do you really want to evaluate something so complex and perhaps not known as well as we know internal combustion engine vehicles? Because at some point that battery will not be usable in an EV and the value of that vehicle drops significantly, maybe to only spare parts value.

When we buy a car, whether it is new or used, we all assume there will be some future value in that vehicle when we decide to sell it. If we look out to the future and see a dramatic decline in the value (maybe to zero) because of the battery life issue we may decide to not buy that vehicle in the first place and possibly reducing the vehicle value years before the battery actually dies because no one wants to be the last owner stuck with a dead battery in their EV.

Buying an electric vehicle counting on a future resale value can be a real gamble.

Let us know what you think in the Comments.

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Summary
Are Electric Vehicle Resale Values a Problem?
Article Name
Are Electric Vehicle Resale Values a Problem?
Description
Over time starting when an EV is new the battery begins to degrade, at some point this affects the resale value because potential buyers know the battery end-of-life is looming out there in the future.
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Comments

  1. Robert Feldman says

    Many readers may recall last December that in Finland there was a Tesla owner by the name of Tuomas Katainen who purchased a used 2014 Model S for around $40K. The car didn’t run right after a year and after going back and forth a few times with Tesla service, he was told he needed a $22,600.00 battery replacement. He wrote to Tesla without receiving any assistance. His resolution was to pack the car with 66 lbs. of dynamite and blow the car up in a local gravel pit while filming the event and posting to youtube!
    Our government is solely focused on selling the sizzle of electric cars by telling us we can get off of fossil fuels, save money, and save the climate. BULLSHIT! This technology is too new and the infrastructure of charging, service support, and economy of scale is not there and won’t be for a while. Is there any wonder why Elon Musk himself made the claim that electric cars are not a “light switch” solution, and fossil fuels should be continually manufactured until the day comes in the future when alternative and sustainable fuels become widely available at a cost that is affordable to everyone.
    Buying any used EV is a great risk to anyone at any price. If at any time after purchase you need a battery pack replacement, any savings you might have achieved flies right out the window putting you under water!

  2. Excellent points made by Robert Feldman.
    I’d like to add a couple things:
    1. Robert’s comment about the cost of battery replacement was similar to that of an owner of a Nissan Leaf we met several weeks ago. The Leaf owner said he jumped at the chance to buy a Leaf in 2011 because he wanted a clean and energy efficient car that would not damage the environment. Since we were overseas on a tour with someone we had just met, I chose not to create a scene by bringing up the environmental cost of mining and extracting lithium (mainly in China), shipping it to Korea or wherever else the battery was to be made, shipping it to the country of the car manufacturer, using electricity (likely produced using fossil fuels) to recharge the battery over its lifetime and ultimately disposing of the battery in a responsible manner. I did say there are arguments that could be made for producing vehicles that use fossil fuels while doing research on other fuels like hydrogen and his lack of a response confirmed he was not open to other ideas.
    2. The Leafmeister did admit that his 11 year old battery has degraded to the point where it only allows a little over 30 miles per charge and he faces three choices: pay $18,000 for a new battery, sell the car for $3,000, or keep it until it degrades to the point where he can’t go anywhere.

  3. There’s a video on youtube of a guy driving a rusted out 1948 willys mb, speed holes in the floor just below the pedals and in the outer corner of the passenger footwell, and at about 6 mins in he comes across a tesla being towed lol.
    Was quite poetic.

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