A recent analysis by iSeeCars has unveiled notable disparities in the 5-year depreciation rates of electric vehicles (EVs), with Tesla models capturing both ends of the spectrum. The study indicates that while EVs, in general, struggle to retain their value, Tesla’s Model S claims the highest depreciation, and the Model 3 stands out as the most resilient.
iSeeCars categorizes electric vehicles as the least resilient in terms of holding their value, experiencing a depreciation of 49.1 percent over a 5-year period. In contrast, hybrids and pickup trucks emerge as the most robust segments, with depreciation rates limited to 37 percent and 35 percent, respectively.
Noteworthy is the improvement in EV depreciation rates since 2019 when the average loss after 5 years was a staggering 67.1 percent. The recent figure of 49.1 percent indicates an 18 percent amelioration, signaling a positive shift in the market.
Karl Brauer, iSeeCars executive analyst, sheds light on the factors influencing EV depreciation. He emphasizes the impact of incentives, such as federal tax credits, which contribute to lowering the upfront cost of EVs but may lead to higher depreciation. Concerns about battery replacement costs also play a role in the depreciation dynamics of electric vehicles.
Delving into individual EV models, the study highlights the Tesla Model 3 as an outlier, exhibiting the lowest 5-year depreciation among its peers. Conversely, the Tesla Model S faces the highest depreciation within the electric vehicle category.
For potential buyers eyeing used EVs, the study implies that the substantial depreciation rates present opportunities for attractive deals. However, for those considering new EV purchases, an awareness of the significant value loss over the initial 5 years is advised. The findings offer insights for consumers navigating the evolving landscape of electric vehicle ownership.
