Electric cars lose as much as half of their value after just three years on the road, new figures show, as the rate of depreciation far outstrips petrol equivalents.
Research from Auto Trader said there were “unsustainable levels of depreciation” in the electric car market, with used prices of battery-powered vehicles dropping by 23pc in the last year alone.
The online vehicle marketplace said a motorist buying a £50,000 electric car could expect to lose £24,000 in value over three years, while a similarly priced petrol car could lose £17,000. The value of used electric cars has dropped dramatically in the last 12 months after Covid-related supply shortages eased and as rising electricity prices hit demand.
This coincided with petrol prices falling to a two-year low. Auto Trader’s latest report warned that “residual values of electric cars remain unsustainably low”.
It said that the price of used electric cars could come under further pressure this year as thousands of motorists return vehicles acquired on three-year leases and as manufacturers cut the price of new vehicles.
“With over 800,000 new electric cars registered between 2020 and 2023, supply returning to the used car market will only increase in 2024, and if demand does not keep up, electric cars could depreciate even further, undermining both consumer and retailer confidence,” it said.
Manufacturers are now applying record discounts to new electric vehicles in a bid to boost stuttering demand.
Auto Trader said car makers were slashing thousands of pounds off prices, with average discounts of 10.6pc offered in December. This compares to discounts of 4.8pc a year earlier. It predicted that a wave of Chinese entrants would further push down the cost of electric cars.
Sales of new battery-powered vehicles in Britain rose by 18pc last year but accounted for just 16.5pc of all new cars sold - a slight decline from 2022. New electric cars are still more than a third more expensive than their petrol or diesel equivalents.
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Date: 2024-03-25 08:52 pm (UTC)Research from Auto Trader said there were “unsustainable levels of depreciation” in the electric car market, with used prices of battery-powered vehicles dropping by 23pc in the last year alone.
The online vehicle marketplace said a motorist buying a £50,000 electric car could expect to lose £24,000 in value over three years, while a similarly priced petrol car could lose £17,000.
The value of used electric cars has dropped dramatically in the last 12 months after Covid-related supply shortages eased and as rising electricity prices hit demand.
This coincided with petrol prices falling to a two-year low.
Auto Trader’s latest report warned that “residual values of electric cars remain unsustainably low”.
It said that the price of used electric cars could come under further pressure this year as thousands of motorists return vehicles acquired on three-year leases and as manufacturers cut the price of new vehicles.
“With over 800,000 new electric cars registered between 2020 and 2023, supply returning to the used car market will only increase in 2024, and if demand does not keep up, electric cars could depreciate even further, undermining both consumer and retailer confidence,” it said.
Manufacturers are now applying record discounts to new electric vehicles in a bid to boost stuttering demand.
Auto Trader said car makers were slashing thousands of pounds off prices, with average discounts of 10.6pc offered in December. This compares to discounts of 4.8pc a year earlier.
It predicted that a wave of Chinese entrants would further push down the cost of electric cars.
Sales of new battery-powered vehicles in Britain rose by 18pc last year but accounted for just 16.5pc of all new cars sold - a slight decline from 2022.
New electric cars are still more than a third more expensive than their petrol or diesel equivalents.