More EV FUD debunking. A friend triggered me by saying "I'm not buying a second-hand EV, who would buy a third-hand one? I'll be stuck with it!" That's utter nonsense, I thought, there are quite a lot of third-hand Renault Zoe/Nissan Leaf/Tesla Model S around these days. But I kept my mouth shut and checked it out first.
To carry out a bit of research I needed to pick a market. I picked the UK just because it's a market I'm very familiar with. Tackling specifically the "I'm going to be stuck with a car nobody wants" angle, let's forget all the running cost arguments (we know EVs are cheaper to run in almost all circumstances, and cleverer people than I have done the maths on that). The focus here is on depreciation, because the premise of my friend's comment is an old EV will be so devalued as to be practically unsellable.
At time of writing there are over 100 second-hand EVs for sale in the UK that are over 10 years old, mostly Nissans, Renaults, BMWs (the i3) and, of course, Teslas - with a smattering of others (those little Citroen and Peugeot things, a Smart or two, etc.) Prices range from £1,500 for a Mitsubishi electric roller-skate to £37,000 for a rather hopeful Model S owner (we can probably ignore that as a blip and set the max at around £25,000). In short, there's definitely a market.
So my next step was to look at a few vehicles and find approximate ICE (Internal Combustion Engine) equivalents to see how their values are holding up.
The Tesla Model S came out in 2014 so we have a 10 year period to look at, and I have a friend who bought one of the first ones (he still has it, by the way, battery performance is still amazing and he gets free electricity from the Tesla Supercharger network for life). New they were between £50,000 and £70,000, so expensive cars! The bigger 85 kW battery, which was way more popular, was £57,000 in standard trim, so let's call it that.
What turns out to be a similar money/spec ICE car that same year? I settled on the BMW 5 series 550i. Performance, gadgetry, size, target market, body style, all really similar. As was the price, identical, £57,000 on the road in standard trim.
If you wanted a BMW 550i from 2014 now you'd be struggling, seems they weren't very popular, but second hand prices are between £10,000 and £15,000. A Tesla Model S from 2014, on the other hand, would fetch between £15,000 and £20,000, so about £5,000 more. In short, we're looking at depreciation as follows:
- Tesla Model S: between 65% and 75% over 10 years
- BMW 550i: between 75% and 83% over 10 years
Interesting! At the luxury end, the EV has held its value better than the ICE car. (An early Tesla Model S is actually a cracking buy, thanks to the batteries turning out to do far better than anybody expected and the fact they all come with free electricity from Tesla's Supercharger network for life, there's nothing Tesla can do to stop you, it's a physical module!)
So let's look at the cheaper stuff. Renault make this easier for us, by making more or less comparable electric and ICE cars at the same time.
The Zoe had its debut in 2013 with a 22 kW battery. It didn't have tons of range, but as a runabout it was perfect, and again, I know someone who still has a 2013 Zoe and loves the fact they can charge in just 10 hours on a normal 10A socket, while doing everything they need to do during the day. Pricing is a bit more complex, you could buy the Zoe in base trim for £15,500 without the battery or £19,000 with the battery included.
(Side bar on the battery leasing thing, you can buy a replacement 22 kW battery for maximum £3,000, leasing it would've cost you about £60 a month, so you'd have bought the battery in about 4 years. Leasing the battery probably wasn't/isn't worth it, which is why nobody does it any more, and you can buy the battery in a used Zoe on a leasing contract for between £2,000 and £2,500, thus cancelling the lease and owning the car outright.)
The Renault Clio had less room in the boot and a less funky design, but the base trim was £13,000 in 2013.
Let's keep things simple and go with the £19,000 Zoe with the battery included and the £13,000 Clio. Quite a chunky £6,000 price difference at point of purchase, it's not the same proposition as the BMW 550 versus the Tesla Model S where there was already price parity.
Nowadays a Clio from 2013 fetches about £4,000 and a Zoe with the battery costs about £6,000 (which makes sense, they're about £3,000 without the battery but you either have to keep paying the monthly lease or buy the battery from Renault - ends up about the same). So depreciation:
- Renault Zoe (with battery): about 68%
- Renault Clio: about 69%
So in percentage terms, the depreciation of a Renault Zoe versus a Renault Clio is more or less identical - let's say 70%, just to make it easy. And less fierce than the depreciation on our luxury ICE saloon, the BMW 5-series, though on a par with the middle-of-the-road Tesla Model S depreciation. Just for fun:
- Renault Zoe (without battery): 80%
Ouch! Definitely didn't want to lease that battery!
We saw there was price parity between the ICE and electric luxury saloons back in 2014, and these days it's nearly impossible to find an ICE luxury saloon any more! However, at the lower cost end of the market there are still quite a few options.
The Renault Zoe was about 30% more expensive than the Clio in 2013, what about now? Well, the Clio is almost gone, but you can still buy a new one... just! Renault are selling the last of their stock, after this they will be a 100% EV company. Prices seem to be from £20,000. The Renault 5, which is the approximate equivalent in Renault's new EV range, is from £23,000. So the price difference now is just 13% for base trim. We're really close to price parity now, but EVs still have that huge running cost advantage.
And you absolutely will be able to sell your Renault 5 in 10 years time, all things being equal you should get about £7,000 for it in 2035, although that remains to be seen of course. Your petrol Clio, however? As ICE cars get banned from more and more city centres, and taxed more and more, maybe by 2035 you'll struggle to sell that!