2024/08/25

Used electric cars experience ongoing depreciation

A recent assessment by a specialized energy platform reveals that used electric vehicles are depreciating at an alarming rate. This trend is exacerbated by the sluggishness of the overall electric vehicle market and ongoing trade tensions between China, Europe, and the United States.

According to "Wired," the average used electric car loses half its value within a year. However, some models depreciate even faster. Tesla, Mercedes, and Ford vehicles are among those affected.

Despite a promising start in 2024, global sales of electric cars have fallen short of expectations. Europe, in particular, has witnessed the slowest growth. While the U.S. market is also experiencing a slowdown, the introduction of more affordable models is expected to boost sales in the future.

According to 'Wired,' the rapid evolution of new electric vehicle models is a primary driver of declining used car prices. This phenomenon mirrors the smartphone market, where newer, technologically superior devices quickly obsolete older ones. Manufacturers' relentless pursuit of improved performance, speed, range, and affordability is a key factor.

Rising production costs, coupled with concerns about battery range and charging infrastructure, further contribute to the depreciation of used electric vehicles. To address these challenges, manufacturers are focusing on developing advanced models with enhanced capabilities.

China's dominance in the global electric vehicle market is largely due to its lower production costs and diverse product offerings. This affordability and variety have made Chinese vehicles attractive to consumers in Europe and America.

Concerned about China's growing influence, these regions have imposed tariffs on imported Chinese electric cars. Despite these efforts, the global electric vehicle market is facing headwinds, including lower-than-expected sales and manufacturer bankruptcies. This occurs as countries are increasingly turning to electric vehicles to reduce carbon emissions from the transportation sector, which accounts for a significant portion of total emissions.