Auto Trader’s latest retail price index reveals a striking trend: electric vehicles (EVs) have taken the lead as the most significant depreciators among used cars in May. Supported by extensive and reliable data, this comprehensive guide undeniably demonstrates that all seven of the top devalued cars in May were EVs.
In this blog…
Which cars are included in the list?
The cars that saw the largest falls in value were the Tesla Model S at 23.6% and Audi e-Tron at 22.8%, closely followed by the Jaguar I-Pace, which saw a 22.5% year-on-year fall in May 2023.
Other vehicles that made the infamous list include the Nissan Leaf, Renault Zoe, Porsche Taycan and BMW i3, which all saw their values plummet dramatically, according to Auto Trader’s pricing data.
These findings mirror the results published in Cap HPI’s valuations last week.
Cap HPI is a valuation expert that uses trade prices versus retail for their findings. They found that all-electric vehicles are 29 of the top 30 most significant drops in used car prices.
Which non-EVs are included in the list?
The only models in the top ten depreciated models that were not an EV were the BMW 8-Series, the Volvo XC40 and the Land Rover Discovery 3.
What factors are influencing EV depreciation?
– Battery Degradation: car batteries are a crucial component of an electric vehicle, and its performance and longevity can impact depreciation. As with all batteries, EV batteries can experience degradation over time, resulting in reduced range and performance. Most concerning is the pace that EV batteries are degrading – many of which are degrading at a rate much faster than the manufacturer has stated.
– Limited Charging Infrastructure: the availability and accessibility of charging infrastructure across the UK are impacting the depreciation of EVs. Many potential buyers feel that the infrastructure available across the UK is inadequate, and therefore they may be hesitant to make a purchase. Limited charging options can limit the convenience and practicality of owning an EV, reducing demand and leading to higher depreciation.
– Battery Replacement Costs: the cost to replace EV batteries is a significant concern for both current and prospective electric vehicle owners. There is a lot of uncertainty surrounding the future battery replacement costs, leading to higher depreciation.
– Expiration of Government Incentives: government incentives such as tax credits and subsidies can positively impact the value of an electric vehicle as they become more accessible. However, the UK government have recently stopped these incentives, which has put EVs out of reach for many UK households.
How is this impacting the world of automotive finance?
The news that retail prices are still falling is unlikely to ease the worries of concerned dealerships, car finance brokers and lenders. More and more car finance intermediaries are refusing to stock second-hand EVs due to the significant depreciation of these vehicles.
Marsh Finance, amongst other car finance lenders, is no longer financing second-hand electric cars because they are deemed high risk. This follows similar sentiments expressed by a panel of independent dealers at the Car Dealer Live conference in March.
Here are the top 10 depreciating used cars in May 2023:
10) Volvo XC40:
Average asking Price: £32,540
Price Change: 8.6%
9) Land Rover Discovery 3:
Average asking Price: £6,010
Price Change: 10.2%
8) BMW 8-Series
Average asking Price: £48,121
Price Change: 12.2%
7) Porsche Taycan
Average asking Price: £95,975
Price Change: 17.4%
6) BMW i3
Average asking Price: £18,874
Price Change: 18.6%
5) Nissan Leaf
Average asking Price: £15,809
Price change: 19.5%
4) Renault Zoe
Average asking Price: £15,362
Price change: 21.6%
3) Jaguar I-Pace
Average asking Price: £39,830
Price Change: 22.5%
2) Audi e-tron
Average asking Price: £43,986
Price change: 22.8%
1) Tesla Model S
Average asking Price: £35,953
Price change: 23.6%
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