When looking for a car, depreciation is a major factor in your decision. Whether you are buying new and want to calculate how much you will lose over the years or wait to buy used and get the best possible deal. If you want to know if electric cars depreciate, then this post is for you.
Electric vehicles (EVs) are becoming increasingly popular among consumers due to their many benefits, including lower operating costs, improved environmental impact, and reduced reliance on fossil fuels. However, like any other vehicle, EVs are subject to depreciation, which is a crucial factor to consider when purchasing a car. In this blog post, we will discuss the depreciation of EVs compared to gas-powered cars, projections of future values, and whether they are a good value compared to regular cars.
Depreciation of EVs vs. Gas-Powered Cars:
Like any other vehicle, the value of an EV depreciates over time. According to a study by Kelley Blue Book, the average depreciation rate for a new electric car is 56% over five years, while a gas-powered car depreciates by an average of 61% over the same period. This means that while both types of vehicles experience depreciation, EVs tend to hold their value better than gas-powered cars. The reason behind this is the rapid advancements in technology and the short time since their mass production.
EV Future Values:
Predicting the future value of an EV is challenging because it depends on various factors such as battery technology advancements, charging infrastructure, and government policies. However, some experts predict that EVs will hold their value better than gas-powered cars in the future due to their increasing popularity, advancements in technology, and rising environmental concerns. It is expected that as more people switch to EVs, demand for gas-powered cars will decrease, leading to a decline in their resale value.
Value Compared to Regular Cars:
When comparing the value of EVs to regular gas-powered cars, it’s essential to consider the operating costs. Although the initial purchase price of an EV may be higher, they tend to be more cost-effective in the long run due to lower fuel and maintenance costs. EVs also tend to have longer lifetimes and lower environmental impact. Furthermore, some governments offer tax incentives or rebates to encourage consumers to purchase EVs, which can help offset the higher initial cost.
I’ve included some of the most popular EVs here to give an example of what to expect.
Nissan Leaf Depreciation
The Nissan leaf suffers from above-average depreciation. Averaging 60% over 5 years.
The worst EV on our list is the Nissan Leaf, which has the lowest depreciation year over year. A two year old Leaf seems to be the sweet spot for both value and reliability.
| Nissan Leaf Depreciation | Top Trim | SL Plus or SL | ||
| Year | MSRP | Current Price | $ Decline | % Decline |
| MY 2021 | 33,526 | 33,526 | $ – | 0% |
| MY 2020 | $33,236 | $32,900 | -$ 336 | -1% |
| MY 2019 | $32,490 | $28,900 | -$ 3,590 | -11% |
| MY 2018 | $33,222 | $18,200 | -$ 15,022 | -45% |
| MY 2017 | $30,892 | $12,500 | -$ 18,392 | -60% |
| MY 2016 | $30,288 | $11,200 | -$ 19,088 | -63% |
| MY 2015 | $29,890 | $8,900 | -$ 20,990 | -70% |
| MY 2014 | $29,975 | $7,800 | -$ 22,175 | -74% |
| MY 2013 | $29,544 | $6,500 | -$ 23,044 | -78% |
| MY 2012 | $28,410 | $5,300 | -$ 23,110 | -81% |
| MY 2011 | $28,120 | $4,900 | -$ 23,220 | -83% |
Chevy Bolt Depreciation
The Chevy Bolt has a depreciation averaging 60% over 5 Years.
The Chevy Bolt is only in its 5th model year, so it is possible that depreciation will decrease slightly over the next few years as first-year vehicles typically suffer from above-average depreciation. Still, it gives the Nissan Leaf a run for the money in the depreciation department.
A one or two-year-old model appears the be the best value.
| Chevy Bolt | Trim | LT | ||
| Year | MSRP | Current Price | $ Decline | % Decline |
| MY 2021 | $ 37,495 | $ 37,000 | -$ 495 | -1% |
| MY 2020 | $ 39,295 | $ 27,700 | -$ 11,595 | -30% |
| MY 2019 | $ 39,295 | $ 22,300 | -$ 16,995 | -43% |
| MY 2018 | $ 38,900 | $ 18,400 | -$ 20,500 | -53% |
| MY 2017 | $ 37,500 | $ 15,100 | -$ 22,400 | -60% |
Tesla Model 3 Depreciation
The Tesla Model 3, so far, shows very little depreciation. First year models have the highest at 21% due to its higher initial MSRP. 2019 Model 3’s however average a 5% appreciation.
Anyone wanting a Tesla Model 3 but hoping to save some money on a used one is probably still scratching their heads. ( Myself included ) The Model 3 has very little depreciation and even some 2019 models are selling at 2020 prices. Supply and demand are part of the reason for this. Simply, there are more customers than cars available. This may not be sustainable, but four years in there seems to be no decline in used prices.
| Tesla Model 3 | Standard Range | |||
| Year | MSRP | Current Price | $ Decline | % Decline |
| MY 2021 | $ 39,190 | $ 39,190 | $ – | 0% |
| MY 2020 | $ 39,190 | $ 39,000 | -$ 190 | 0% |
| MY 2019 | $ 36,200 | $ 37,900 | $ 1,700 | 5% |
| MY 2018 | $ 46,000 | $ 36,200 | -$ 9,800 | -21% |
Tesla Model S Depreciation
The Tesla Model S has a depreciation of 52% after 5years.
The Tesla Model S does not have the stellar resale value of its younger brother the Model 3. A few factors contribute to this. Primarily advances in technology. The Model S battery tech for example has improved significantly over the years. So the smaller range of the older models is not quite as appealing as the newer offerings.
The Model S MSRP also puts it squarely in the luxury category which is the most depreciated sector in all of automobiledom.
A 2019 or even a well-priced 2018 are the best value picks for the Model S. It will alleviate the fears of expensive repair bills, but offer a significant discount on the purchase price.
| Tesla Model S | Mid Range | |||
| Year | MSRP | Current Price | $ Decline | % Decline |
| MY 2021 | $95,799 | $79,300 | -$16,499 | -17% |
| MY 2020 | $95,799 | $63,200 | -$32,599 | -34% |
| MY 2019 | $95,799 | $55,600 | -$40,199 | -42% |
| MY 2018 | $95,799 | $49,400 | -$46,399 | -48% |
| MY 2017 | $95,799 | $46,300 | -$49,499 | -52% |
| MY 2016 | $95,799 | $39,300 | -$56,499 | -59% |
| MY 2015 | $95,799 | $38,600 | -$57,199 | -60% |
| MY 2014 | $95,799 | $37,300 | -$58,499 | -61% |
| MY 2013 | $95,799 | $22,200 | -$73,599 | -77% |
| MY 2012 | $95,799 | $18,800 | -$76,999 | -80% |
The above numbers do not reflect any rebates available from state to state which may affect the results.
Or perhaps not. Where I live, people are selling Model 3’s with 15,000 Miles for the same price as a new one. If I bought new, I would get a $5000.00 federal rebate and wind up with a new car for $5k less, and yet these ads keep popping up.
I also haven’t drawn a correlation between EV depreciation and standard automobile depreciation. Though at first glance it appears to be actually quite similar.