Your questions answered: What will an EV be worth after three years?

There’s lots of EV shopping among carsales readers this week, including one person looking for an affordable battery-electric car that offers the towing ability and spare tyre of petrol and diesel alternatives.

Another is looking for an electric vehicle with plush suspension to make the drive uber-comfortable.

We’ve also got one reader looking to do a novated lease with an EV and wondering about the tax office’s predetermined residual values.

Other topics we tackle this week include EV conversions and why one electric car is so much more expensive overseas.

And, yes, we do have one reader asking a non-EV question in the quest for a $30-45K car that won’t cost the earth. A warning: one of the options is a hybrid…

Question:

Answer: It’s impossible to accurately predict future values because they depend on so many factors, all of which ultimately relate to supply and demand. If a brand brings too many cars into the market then residuals are likely to be flat. If a car has a reputation for issues it could also be worth less years down the track.

The ATO residual figures for novated leases are usually quite conservative. So most three-year-old cars will comfortably be worth more than the 46.88 per cent stipulated.

If you look at 2020 EVs on carsales you’ll notice most have asking prices well above 46.88 per cent of their initial purchase prices.

And some – including Tesla Model 3, Hyundai IONIQ 5 and Kia EV6 – perform very well on the used car market.

Yes, we’re expecting plenty of advancements in EV tech – especially batteries – but there’s also plenty to like with the current crop of electric cars, especially when compared with their ICE alternatives.

So while no one can accurately predict what a car will be worth three years from now, we’d expect an EV bought today to be worth more than the rate the ATO stipulates.

Assuming you’re taking advantage of the fringe benefits tax (FBT) exemption that applies to EVs below the luxury car tax threshold, it means you will not only get the tax benefits but could also have a car worth more than the final payment on the lease after three years.

Question:

Surely there is a demand for proper spare tyres or do people have to now be totally reliant on someone else to save them IF their mobile phone has reception? – Paul S

Answer: Some EVs can currently tow but usually it’s around 1500kg or less. The reality is it hasn’t been a priority for car-makers in what is the early phase of EVs.

Once we start seeing more larger SUVs and utes you can guarantee the towing credentials will get better.

As for a spare tyre, that’s also in a similar boat, although it’s been complicated by a lack of space. EVs have their battery packs in the floor and a spare tyre means a smaller battery or much smaller boot.

Again, we’re confident you’ll start seeing some soon, but for now you’ll have to buy a spare wheel and pop it in the boot.

Tesla drivers have access to a tyre replacement/loan service while the car is under warranty. Granted, it won’t help you out of phone range, but anywhere else it’s a handy back-up.

Question:

Answer: The BMW i3 was a great little EV that packed in plenty of tech. As you may know, it has a carbon-fibre body that helped reduce weight, while super-skinny tyres add to its efficiency.

It was never a huge seller because it had a premium price tag and its quirky body – with rear-hinged back doors – reduced practicality. But it was fun to drive and is still decent buying these days.

The 60Ah versions are much cheaper because they had a battery pack half the size of the 120Ah ones that came out later.

The claimed 190km was nothing special and the real-world expectations were lower than that. You’d also want to ascertain what sort of condition the battery is in, especially as the car may no longer be covered by its battery warranty.

Degradation of batteries is normal, but you want to make sure it’s not too much. A BMW dealer and some mechanics will be able to help by plugging into the onboard diagnostics. RedBook Inspect should also be able to assist on this front.

Question:

If you were me, what EVs would you consider that would give me that comfortable ride? I’m not looking for a blistering 0-100km/h time, I just want comfort. – Bud C

Answer: The Mercedes-Benz EQE and Audi Q8 e-tron do a great job of smothering bumps, although each comes with a hefty price tag.

The best from the more mainstream brands for ride quality and control is the Kia EV6 – carsales’ Car of the Year 2022. It’s been tested and tuned on Aussie roads and the result is something that still delivers on driving enjoyment but also copes nicely with bumps.

Also look at the Hyundai IONIQ 5 and BYD Atto 3. We wouldn’t say they’re plush, but they’re certainly comfy.

Question: There seem to be EV conversions in the US and in England that appear to be quite prolific, but are there any of that nature here in Australia – and if not, why not? Is it lack of demand or I fear pricing for EV units themselves and the labour/engineering involved?

What do you guys see as the future of retrofitting classic cars with modern EV units in volume and reducing the cost. Yes, arguably a lot of classic car people will refuse to do them but there would also be a few that would be keen.

Answer: There are various companies doing EV conversions in Australia. However, none are particularly cheap, with prices typically starting at around $50K and heading north of that.

That high cost typically limits them to collectible cars and classics just like yours, where people gulp at having major mechanical work or replacement engines done to their beloved ride.

And you’ve nailed it. Some people don’t want to mess with the original and insist on keeping an internal combustion engine whereas others are more than happy to make a classic easier to live with by giving it a relatively simple electric motor.

Question: I travel from Newcastle to Sydney two to three times per week and am looking for a small, fuel-efficient vehicle with a lane departure system, Apple CarPlay and enough size to very occasionally put two German shepherds in the back for five-minute trips to our farm. My budget is $45K but would love to stay closer to $30K if possible.

Answer: The Skoda Kamiq is a nicer car to drive and has more interior space. But the Toyota Corolla fights back on running costs and a reputation for longevity.

In short, we’d be putting our money on the Corolla to go further with fewer issues. The Corolla’s hybrid system also means fuel use will be a lot less around town. The difference will be much less on your freeway runs, although the Corolla can run on regular petrol whereas the Kamiq calls for premium unleaded.

Some other options to stick on the consideration list include a Mazda3, Hyundai i30 and Kia Cerato, the latter getting a seven-year warranty.

Question:

So often we see statements in EV articles saying price in UK/wherever as indications of relative Australian pricing. The Australian offering is basically 50 per cent – yes, 50 per cent – more expensive than the Japanese. Why? Seems absurd.

By the way, north of Tokyo all the way to Sapporo I saw two Teslas and a few Leafs. EVs just aren’t a thing in Japan yet. South of Tokyo in Kyoto and Osaka there were a few more but way less than one in a 100. I have brochures and price list hard copies of Hyundai pricing if interested and the new Kona is very smart and another step up in feel and fit – very European. – Rob

Answer: Setting pricing for cars is a complex exercise that not only takes into account exchange rates but also which factory a car is sourced from, its exact specification level, the warranty period offered in that market and how many the manufacturer plans to sell (larger scale typically means lower prices).

Perhaps the most crucial component is how much customers are prepared to pay. Car companies will often price a vehicle according to its rivals and what the market expects (or will swallow) rather than what’s required for a modest profit.

Keep in mind that Tesla has been aggressive with pricing in Japan and Tesla is one brand all others would be keeping an eye on.

As for EVs in Japan, you’re absolutely right. I just got back from Japan and noticed that there aren’t that many, although there were some IONIQ 5 EVs running around as taxis.

Next step for Japan is to fix their charging network, which makes ours look advanced.

Got a question but don’t know where to find the information you need? Email us at editor@carsales.com.au

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