…By Lola Smith for TDPel Media.
A new study commissioned by ChooseMyCar.com has found that electric vehicles (EVs) depreciate in value at a much faster rate than petrol vehicles, losing more than 50% of their value in just three years.
The research compared the value of new cars in 2020 against their current value in 2023, with EVs losing an average of 51% of their purchase value, compared to just 37% for petrol vehicles.
This equates to a loss of £15,220 for EV owners and £9,901 for petrol vehicle owners.
The research also found that the higher the initial purchase price, the greater the loss in value, with the Tesla S model losing £25,000 in value in three years.
The research compared new car prices in 2020 against the average price of cars listed by private sellers or car dealers in 2023.
ChooseMyCar.com also looked at popular car buying websites to compare a ‘buy now’ price.
The researchers found that even entry-level EVs, such as the Nissan Leaf, were seeing losses of £13,000, and that entry-level cars were often seeing larger percentage decreases in their value, with the Hyundai Ionic losing 67% of its worth.
The research also found that the trend of higher rates of depreciation is expected to continue, according to market experts.
According to the research, the market correction that has seen new EVs lower their initial purchase price is partly responsible for the higher rates of depreciation.
However, the researchers noted that the trend is expected to continue.
The study found that the Government’s grant, which offered funding of up to 75% towards the cost of installing electric vehicle smart charge points at homes across the UK, helped incentivise car owners to switch to an EV, but the hundreds of pounds saved now look insignificant in comparison to the thousands of pounds lost in value.
The research identified the EV models with the biggest depreciation, with the Hyundai Ionic seeing a drop of 67%, followed by the BMW i3 with a drop of 64%, the Renault Zoe with a drop of 61%, the Nissan Leaf with a drop of 58%, and the VW ID3 with a drop of 55%.
The Tesla Model S saw a drop of 46%, and the Tesla 3 saw a drop of 43%.
Founder of ChooseMyCar.com, Nick Zapolski, commented that the research shows another blow for EV owners, as EVs themselves are not holding their value, and the price of electricity has increased, making running the cars less economical than before.
The installation of home charge points is expensive, and there are concerns about the availability and reliability of public charge points.
Furthermore, some of the initial incentives to encourage EV ownership are being discontinued, such as lower tax and free entry into ULEZ zones.
Zapolski called on the Government to take action if it wants to continue pushing the idea of EVs onto consumers, as currently, the cons of EV ownership threaten to outweigh the pros.