While acknowledging the various advantages of driving an electric vehicle (EV), it is prudent to be well-informed before making a purchase, particularly when considering depreciation rates.
The results of a recent investigation conducted by iSeeCars, focusing on the devaluation of vehicles over the last five years in the US market, have been revealed. As per these conclusions, electric vehicles have demonstrated a higher rate of depreciation compared to internal combustion engine (ICE) cars and hybrid models.
Despite the standard 5-year rate standing at 38.8 percent for all vehicles, electric vehicles experience a more substantial decline, exceeding 10 percentage points at 49.1 percent. Additionally, SUVs exhibit a depreciation rate higher than the average vehicle, reaching 41.2 percent.
The Tesla Model S emerges as the electric vehicle experiencing the highest depreciation, witnessing an average value loss of 55.5% over a five-year period. In contrast, its smaller sedan counterpart, the Model 3, demonstrates the least depreciation among electric vehicles, with an average decline of 42.9%. It’s worth noting that the study focused on five specific models—Tesla Model 3, Tesla Model X, Nissan Leaf, Chevrolet Bolt EV, and Tesla Model S—aligning with the duration of the five-year analysis.
Conversely, hybrid vehicles have experienced a significant enhancement in residual values, witnessing an almost 20-percentage-point increase over the last four years—from 56.7 percent in 2019 to the current 37.4 percent. Factors contributing to this positive shift include elevated fuel prices and a growing familiarity with hybrid technology, leading to an expanded market and heightened demand for hybrid vehicles.
In the realm of five-year ownership depreciation, the Porsche 911 stands out with the lowest rate at 9.3%, trailed by the Porsche 718 Cayman at 17.6% and the Toyota Tacoma at 20.4%. Conversely, the Maserati Quattroporte takes the lead in depreciation, experiencing the highest rate at 64.5% over the same duration.
Indeed, it’s noteworthy that in 2023, the overall trend is a better retention of value compared to 2019. This improvement can be attributed to the combination of reduced new car production during the pandemic and the current limitations in the used car supply. Pre-pandemic, the standard scenario was a car losing about 50 percent of its value over five years. Presently, the average 5-year depreciation has decreased to 38.8 percent, with electric vehicles emerging as the group with the highest depreciation, losing approximately half of their value.
