What is my used electric car worth?

The rest of us can be thankful for those early adopters who jump on the latest technology. They are the ones who shelled-out six figures for a massive OLED TV so that, a few years later, we could buy one for half the price.

They are more than likely the same group of tech heads that are leading the charge (pun intended) of new-fangled electric cars, recognising their value despite the fact they command a hefty price premium compared to an equivalent combustion-powered alternative.

And now, as some models move into their second generation at the same time as more car-makers introduce newer models, those early adopters are just as keen to stay at the front of the wave as they were when initially catching it.

“EVs are really seen as a technology purchase at the moment; people want to buy the latest and greatest, due to improving technology – in particular around battery life and range,” says Ross Booth, Data Services Director at RedBook.

While EVs are expensive now, the price will inevitably come down as economies of scale make them relatively cheaper to develop and build, and a combination of increased supply and positive word of mouth will heighten mainstream consumer demand.

In the meantime, at least some of the added expense buying an EV rather than a car with an internal combustion engine can be recouped in lower running costs.

A question often overlooked however, is whether there’ll be any pay-off at the other end – three or four years down the track – when it’s time to sell.

Ross Booth thinks not, certainly not while the technology continues to evolve and new-car prices for EVs remain high.

“Like an iPhone, [the promise of new technology] influences demand for new EVs, rather than a used EV purchase. Who wants to buy an iPhone7?” he said.

“There are still concerns in Australia [regarding] the substantial premium in the original purchase price, range anxiety, decreasing range over time and the cost and timing of a replacement battery.

“As a result, used EV prices decrease substantially quicker compared with the equivalent petrol, diesel or even hybrid competitors. The exception is Tesla, which is seen as a technological sports car, with a different brand perception, rather than a true EV.”

The expensive, high-performance electric sedans and SUVs from Tesla hold their prices very well. At a minimum asking price of around $65,000 for a five-year-old example, the Model S 85 has retained around 63 per cent of its new purchase price.

A Mercedes-Benz E 300 BlueTEC Hybrid from the same year has retained 46 per cent of its new-car purchase price, according to figures supplied by RedBook.

And conventional E-Class models from the same year depreciate just as fast, if not faster. The E 250 CDI (diesel) from 2016 cost $107,900 plus on-road costs when new and is now valued by RedBook at $49,300 for private sale.

As another example of the ‘early adopter’ factor influencing the depreciation of an upmarket model, the BMW i3 60Ah from 2015 – $63,900 plus ORCs new – has held its value much better than a conventional stablemate from the same year.

While the retained value for the i3 equates to $27,500, the more expensive BMW 320d M Sport auto sedan ($67,954) from the same year is now valued at $28,100.

Unfortunately, it’s not the same happily-ever-after ending for buyers of lower-priced EVs.

The Mitsubishi i-MiEV was originally leased to customers throughout Australia – including carsales – because the purchase price for such a small car would have been prohibitive at the time.

The 2011 i-MiEV did eventually go on sale, priced at $48,800 plus ORCs. Buyers can pick up a used example for $10,100, according to RedBook.

That’s a lot of money lost by the first owner – about $38,700. The retained value for the i-MiEV is just 21 per cent of its new purchase price. That’s not good, but nor is it that far away from the retained value of the Mitsubishi Colt from the same year – roughly 30 per cent.

Still, it’s misleading to bandy around percentages rather than actual dollar cost. As Booth notes, “you can’t bank percentages”.

“At the end of the day it comes down to total cost of ownership, and EVs may have lower running costs, but the major cost in owning any vehicle is the depreciation.”

Booth suggests that the depreciation of lower-priced EVs, expressed in dollars, will begin to stabilise as technology advances trickle through to the used-car market and consumer sentiment adjusts to these alternative-energy vehicles.

“Used values of EVs will improve in the future when the demand for used EVs improves,” he said.

“A good comparison is hybrid vehicles in Australia. These have been on sale for more than 20 years and used pricing of hybrids still lags behind petrol for similar reasons to EVs, including customers buying the latest and greatest and the advantage of a used hybrid compared with a traditional petrol vehicle.”

Battery longevity will be crucial to community acceptance of the EV, but concern for the lifespan of the nickel-metal hydride battery of the Toyota Prius hybrid is no longer the issue it once was.

People probably stopped worrying about Prius battery life after the taxi industry began using the small hybrids (and Camry Hybrids too) by the thousands.

That changing attitude is reflected in the retained values of the Prius gradually gaining ground – to the point where the resale value for the Prius these days is on a roughly equal footing with conventional cars.

“The gap in used values of hybrids is nearing parity with traditional petrol cars due to improved technology, the acceptance of that technology and the closing of the new vehicle price premium,” Booth said.

“Many hybrid vehicles are now only a couple of thousand dollars more than equivalent petrol models, whilst in the past they were sold at a major premium not too dissimilar to current EVs.”

EVs appear to be on the same trajectory as hybrids. The tipping point will be when mainstream buyers looking for an affordable, practical car begin to outnumber the early adopters.

Currently EVs are too expensive, and the first buyer usually takes a big hit when it comes time to sell, but Tesla has shown that doesn’t have to be the case, and new models like the Porsche Taycan and Mercedes-Benz EQC will likely bolster the argument in favour of electric cars.

But as to when EVs will be perceived to match conventional cars for total cost of ownership, nobody can say.

“When will EVs achieve depreciation parity with petrol and diesel engines in Australia?” Booth asks.

“Will it take over 20 years like hybrids? Many factors impact the demand and supply of vehicles, including government policy, which we see greatly influences new and used EV sales globally.

“The fact is more EVs are entering the market at an ever-improving performance. The impact on used EV depreciation will continue to be influenced by the supply of the vehicles and growing demand for a used EV compared with a new EV or a new or used petrol equivalent.”

Of course, one way to avoid the pain of a low resale value is this: don’t sell the car.

But if you are looking to upgrade, here’s a guide to what your electric car is worth.

Audi e-tron
2020: $105,900-$122,900

Audi e-tron Sportback
2020: $114,000-$129,100

BMW i3
2014: $26,500-$32,500
2015: $27,500-$35,400
2016: $31,200-$40,700
2017: $35,700-$42,800
2018: $43,800-$51,000
2019: $50,100-$55,300
2020: $53,600-$58,000

Hyundai IONIQ Electric
2018: $30,000-$35,900
2019: $32,200-$42,100
2020: $42,000-$53,100

Hyundai Kona Electric
2019: $48,400-$57,800
2020: $51,000-$59,300

Jaguar I-PACE
2018: $75,100-$90,700
2019: $79,200-$105,600
2020: $100,100-$132,200

Mercedes-Benz EQC
2019: $95,600-$102,900
2020: $98,900-$115,800

MG ZS EV
2020: $31,400-$34,200

MINI Electric
2020: $43,400-$47,100

Nissan LEAF
2012: $8800-$10,600
2019: $34,000-$37,200
2020: $36,400-$39,200

Mitsubishi i-MiEV
2011: $10,100-$11,700
2012: $10,700-$12,300

Tesla Model 3
2019: $49,900-$79,200
2020: $54,900-$84,700

Tesla Model S
2014: $49,100-$62,200
2015: $54,900 -$76,200
2016: $64,200-$94,100
2017: $68,800-$101,200
2018: $82,100-$104,300
2019: $92,100-$111,900
2020: $106,600-$130,200

Tesla Model X
2017: $90,000-$124,300
2018: $95,800-$111,200
2019: $98,600-$134,800
2020: $124,600-156,200

*Values provided by RedBook are based on private sale and taking into account all model variants released in each calendar year.