Values of used electric cars are likely to fall in the next 18 months as more cars come to market, potentially pushing down values of older models ‘significantly’.
That’s the view of Cazana’s director of insights, Rupert Pontin, who told Car Dealer Magazine in an exclusive interview the boom in new ‘petrol car-like’ electric cars will have repercussions on the used electric market where values have traditionally been strong.
‘In the past four to six months, we have seen is an increase in battery electric vehicles with a petrol-tank range,’ he said.
‘There has been a sea-change in the popularity and desirability of these types of electric cars, but when those cars come back to market there are a couple of things to consider.
‘Firstly, a battery electric vehicle has a very high retained residual value – if you look at a one-year old vehicle, it sits a lot higher in terms of value than its petrol counterpart (approximately up to 10 per cent), that situation is not sustainable in the 18 months to two years as we start to see more volume coming back to the marketplace.
‘In general terms we will see an erosion of intrinsic value against percentage of original cost when new.’
Pontin explained that with models better battery technology coming into the used car market, values of older models with less range and poorer battery technology will be affected ‘significantly’.
‘We are going to see some really interesting activity is the value of older technology,’ said Pontin.
‘We’ve seen this with the Renault Zoe – as it has gone through its iterations, and where technology is moving so fast and the range from one vehicle with an enhanced battery to another is changing so much, it tends to mean the value of the previous model tends to fall away quite quickly because the desirability isn’t there.
‘We will be going through a period of rapid change where we will see new capability come through in terms of range which will inhibit the value of the outgoing model quite significantly.’
Pontin also revealed that for the general car buyer, there’s still a ‘psychological blocker’ with electric cars but that’s likely to change as more cars with better ranges come to the used car market.
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