Electric vehicle depreciation is something of a hot topic right now, and for good reason. On one hand, there are some fantastic deals to be had on the secondhand market, but on the other of course, there’s the thorny issue of some EVs losing half of their value in a single year.
Cars losing you a chunk of cash the instant they’re driven off the dealer lot is nothing new, especially at the pricier end of the market. And if you intend to keep your shiny new EV for a long time, then its worth after just a year or two matters far less. But what if you’ve experimented with your first EV then decided its range or your local charging infrastructure isn’t up to scratch, and want to sell within the first year? If that’s you, you’d better be prepared for a significant loss.
In a bid not to tar all EVs with the same brush, we’ve aimed to be balanced in our approach to discovering trade-in valuations. There’s plenty of color to be reported here, too—like the US dealer who actively warned our reporter against selling him their EV, or the story of a Mercedes EQE that lost more than $600 each day—but for now let us deliver the cold, hard numbers.
We are using two tools for this research. The first is an online appraisal system by Edmunds, the US automotive industry resource, and the second is Cap HPI, a vehicle valuation service for the UK auto trade. Let’s start with the UK electric trade-in landscape, then compare it with the US’s.
Main Offenders
Our first discovery was that, in the UK, various new electric cars lose 50 percent of their value in the first 12 months. Yes, you read that right—some EVs depreciate by 50 percent in a single year.
Now, this cannot be said of every EV, but Cap HPI data provided to WIRED by Parkers, a respected UK online car resource, revealed how six different EVs are all projected to halve in value after 12 months and 10,000 miles. These include the Audi e-Tron GT, which plummeted by 49 percent from £107,675 ($138,000) to £54,700 ($70,100), and the Ford Mustang Mach-E, which fell by 52 percent from £59,325 to £28,575. According to the data, a Polestar 2 would also lose 52 percent of its £52,895 sticker price in just 12 months.
The Tesla Model 3 fared only slightly better, falling by 45 percent in its first 12 months and 10,000 miles, while the Porsche Taycan fell by 49 percent and the Hyundai Ioniq 5 lost exactly half in the same period. These prices are all based on a midspec version of each car, since factors like battery size, trim level, and even paint color can have a marked effect on trade-in value.
Miley Face
But do you know what has less of an impact on depreciation? Mileage. If the long-range Polestar 2 mentioned above had covered 20,000 miles in its first year instead of 10,000—well above the annual UK average of just 7,000—its estimated trade-in value falls by only an extra £975, or a further 2 percent of its original price.
It’s a similar story with the Taycan. A 4S model with the long-range battery fell from £100,200 to £50,700 in its first 12 months and 10,000 miles. But if it had covered 20,000 miles in the same year it would have fallen by only another £2,650. Or, after two years and 20,000 miles it would be worth £44,175, according to the Cap HPI data. Age (beyond the first 12 months) has a similarly insignificant effect. A 10,000-mile Taycan is worth £50,700 after one year, or £46,600 after two years.
YouTuber The MacMaster has been charting the decrease in value of his own two-year-old Taycan, which dropped from a new price of £120,000 down to a Porsche dealership valuation of £44,650 in March earlier this year, leaving him in negative equity as he still owes approximately £64,700 on the EV. To make matters worse, the Porsche dealership giving the valuation supposedly refused to take his Taycan.
Remember, these are all estimated trade-in values. You would expect to earn more by selling the car privately, and you’d see the same car advertised for more by a dealer to ensure they make a profit.
Depreciation of the Tesla Model 3 also slows significantly after the first year. Cap HPI data states how a 2023 Model 3 Long Range would fall from £50,000 to £27,550 after one year and 10,000 miles, then by only an additional £2,500 after two years and 20,000 miles. Had the first 10,000 miles been spread over 18 months instead of 12, the price would fall by only an extra £825 in those six months.
The ability for Tesla, and other EV manufacturers, to update and upgrade a car’s software months or even years after it left the factory should help with long-term depreciation. We’ve seen how Tesla can push out major user interface upgrades, and even add entirely new features, over the air. Back in 2019, Jaguar pushed out a software update that claimed to increase the range of its I-Pace by up to 8 percent, and in 2022 the Polestar 2 gained Apple CarPlay—a feature that manufacturers used to charge handsomely for—via a free OTA update.
EV vs. ICE
As we said earlier, heavy day-one depreciation has long been par for the car ownership course. But how do year-old EVs stack up against similar internally-combusted cars? And more specifically, what happens when you compare two cars of a similar size and price from the same manufacturer? Cap HPI data has the answers and, again, the results are best viewed sitting down.
When comparing a gas-powered Audi Q7 55 with an electric Audi e-tron 55 SUV, both one year old and with 10,000 miles, the gas-powered car is worth 42 percent more after 12 months, despite costing less when new.
This is also true with lower-value cars. Cap HPI data showed how, after three years and 30,000 miles, a gas-powered Volkswagen Golf has a 46 percent price premium over an electric Golf.
We expected to find a similar difference between the gas-powered Porsche Panamera and electric Porsche Taycan. However, Cap HPI data suggests similar, midlevel 4S variants of each lose a similar amount of value over two years and 20,000 miles. The Panamera fell from £93,140 to £63,250, while the Taycan dropped from £84,030 to £53,000.
Auto America
Now for the US prices. According to Edmunds, a 2022 Porsche Taycan Turbo with 10,000 miles (well under the US annual average of 14,000) was worth about $106,000 at the time of writing in July 2024. That’s about $50,000 below what it would have cost new, not including optional extras, which pump up the retail price but tend not to affect resale value.
Historical data produced by Edmunds shows how the car’s value briefly rose from $129,000 to almost $131,000 between August and October 2023, but has fallen markedly since, tumbling by as much as $4,000 per month between November 2023 and February 2024 before dropping a further $10,000 over the next five months.
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The valuation tool states: “This vehicle’s value is likely to decrease within the next month. Time is not on your side if you’ve been waiting to sell/trade for maximum value.” WIRED found just such a Taycan for sale in Los Angeles for $120,000, suggesting a dealer profit of roughly $13,000 before any negotiation.
Although initial depreciation isn’t as brutal in the US as the UK, there are still plenty of deals to be had. WIRED found a fully-loaded 2020 Taycan Turbo with just 5,000 miles on the clock for $92,000—a saving of $86,000 on the original purchase price. That’s the equivalent of more than $17 per mile in depreciation.
A 2023 Polestar 2 Long Range Single Motor with 10,000 miles on the clock has a trade-in value of $30,500, according to the Edmunds appraisal tool. This increases to $32,500 if sold privately, and the tool states an estimated dealer price of $35,000. The trade-in value represents a $20,000 or 40 percent drop from the car’s approximate retail price.
As with the Taycan, Edmunds says the Polestar 2’s value is trending down, but interestingly it increased in three of the previous eight months to July 2024. During our research WIRED saw how, in some cases, Edmunds would suggest holding onto the vehicle, since prices were on the up. As one EV specialist stressed to us, car values constantly change regardless of how they are powered.
Covid Consequences
The used-car market was turned on its head in the wake of the Covid-19 pandemic, as production slowed, key components such as microchips became scarce, and secondhand prices rose. According to iSeeCars, a US car search and research company, the effects are still being felt, and all cars held their value better in 2023 than in 2019. Prior to the pandemic, the average car would lose 50 percent of its value in five years, the company said, but by late 2023 this had fallen to 38.8 percent.
However, electric cars are performing less well, losing an average of 49.1 percent of their value in five years, according to analysis of more than 1 million 2018-model-year cars sold between 2022 and 2023.
A June 2024 study, also from iSeeCars, found used EV prices had fallen below gas-powered cars for the first time. Having analyzed more than 2.2 million used cars between May 2023 and May 2024, iSeeCars found the average used EV had fallen from $41,000 to $28,800, while the average gas car had fallen only slightly, from $32,700 to $31,400.
“It’s clear used-car shoppers will no longer pay a premium for electric vehicles, and in fact consider electric powertrains a detractor, making them less desirable—and less valuable—than traditional models,” said Karl Brauer, an analyst from iSeeCars.
Secondhand Supremacy
While undoubtedly a concern for anyone who plans to sell their nearly-new EV, the data is great news for secondhand buyers. From a £5,000 ($6,400) Renault Zoe and £12,000 ($15,000) Citroen e-C4 to a $25,000 Polestar 2 or a $30,000 Jaguar I-Pace, there are amazing deals to be had. And, what’s more, EV batteries are lasting longer than expected, according to Recurrent, whose community of 20,000 EV drivers states just 2.5 percent of battery packs have been replaced outside of manufacturer recalls.
It’s common knowledge among EV buyers that replacing a failed battery pack can be incredibly expensive. According to Recurrent, replacing an EV battery out of warranty costs between $6,500 and $20,000.
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The fear of coughing up more cash than the car is worth to swap out a broken pack lingers in the mind of any driver whose EV is no longer protected by its manufacturer’s battery warranty, which often lasts for eight years or 100,000 miles. That said, battery failure is rare, and many aftermarket warranty providers now include EV battery cover, according to the RAC, a British breakdown company.
And the Loser Is …
Yet despite EV batteries lasting longer than expected, year-one depreciation horror stories remain. The most acute eample we’ve seen was of a Mercedes EQE run for six months by TopGear. An anonymous call to a Mercedes dealer revealed it had lost £40,000 ($51,000) in just three months and 4,500 miles. That’s close to 50 percent in 12 weeks, or the equivalent of about £480 ($615) per day.
Parkers data provided to WIRED told a less extreme story, but still revealed how a midrange Mercedes EQE 350 is estimated to plummet from a retail price of £89,290 to just £49,500 in its first 12 months. A gas-powered Mercedes E-Class also fell to just under £50,000 after one year, but it cost £20,000 less to start with.
Why Is This Happening?
Car depreciation is nothing new, especially at the luxury end of the market; anyone who has shelled out six figures for a German executive sedan will know what steep losses feel like.
Factor in the even higher costs of electric cars and their optional extras, plus the omnipresent concerns of EV range and charging infrastructure—then look at how quickly EVs are improving with every facelift, with new models gaining extra range, performance, and charging speed over their predecessors—and soft residuals are bound to occur.
Consider too how many of the EVs grabbing depreciation headlines right now are examples of first-generation technology. The Porsche Taycan, Audi e-tron, and Mercedes EQ families are all first attempts by legacy manufacturers caught napping by Tesla and, more recently, by a slew of low-cost, state-backed upstarts from China. They are the original, non-3G iPhones of their day and are now already being replaced by facelifted versions that go much farther and charge more quickly.
Discounts on new EVs also have an effect on the used market. Tesla is well known for its wildly fluctuating prices, but others have slashed prices recently, too. WIRED found official Porsche dealerships in the UK offering several brand-new (but previous-generation) Taycans with a £20,000 ($25,000) discount on their £110,000 list price. One example, a GTS Sport Turismo was being offered with a £33,500 discount.
With the new 2025 Taycan having only just arrived, discounts on last year’s tech are to be expected, and that’ll twist the knife even further on used prices, as well as on a secondhand market already filling up with three-, four- or five-year-old EVs that have just reached the end of their lease deal.
So, What Should You Do?
Despite rampant depreciation, EV sales are still on the up. They accounted for 18.5 percent of all new vehicle sales in the UK in July, according to the Society of Motor Manufacturers and Traders, up 18.8 percent on the previous year, and are outselling plug-in hybrids 2 to 1. According to Edmunds, 6.8 percent of new vehicles sold in the US in May were fully electric, four times that of plug-in hybrids.
For buyers who can charge at home—and perhaps benefit from associated tax incentives, too—buying a new EV can still be a sound financial decision, providing you intend to keep it for the long term. Buying the car outright, or with a bank loan, and selling it within 12 months will likely leave you significantly out of pocket. But, as the data in both the US and UK shows, prices tend to stabilize through subsequent years.
The best advice? Buy secondhand, unless you can truly afford to not care otherwise, and enjoy your bargain EV—complete with its low running costs and minimal maintenance requirements—for the half-decade or more still on the battery warranty.
Additional reporting by Boone Ashworth.
