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Electric Cars Expected to Lose Their Value - Big Time

It's called depreciation, and it's striking EVs harder than most regular cars.

Pure electric vehicles are still a fairly new thing, and only now are analysts beginning to see whether or not they’ll retain their value after a few years of ownership. Kelly Blue Book, one of the most popular sources for owners to ascertain their car’s value, has just come out with an analysis regarding EV depreciation. And it ain’t too pretty. The Nissan Leaf, for example, is predicted to be worth less than 15 percent of its original price after the first five years of ownership.

The Ford Focus EV will retain 20 percent while the Chevrolet Spark EV will keep 28 percent of its value. So why are EVs likely to lose their value at a higher rate than gasoline-powered cars? Part of the reason is that buyers rarely pay the full MSRP due to tax breaks along with other state and local incentives. Simply put, cars sold at a discount depreciate faster. Tesla, for example, aims to counter this predicted trend by backing the resale value of its Model S for buyers who opt to use the Tesla finance program. Unless you can really afford to take a loss on your EV, with the exception of Tesla, then perhaps it’s not a good buy after all.

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