EV Depreciation is BRUTAL | MGUY Australia
There are so many reasons why EVS are just not a sensible choice for most people right now if you don’t have a garage or driveway to charge overnight public charging is completely impractical if you need to travel long distances regularly forget it if you need to tow or haul loads or you’re
Running a business don’t bother with an electric truck just get a diesel our cars are often our second largest purchase we make after a house and so resale value and depreciation are an important factor to consider especially when cars are often financed like with a house we don’t want to be in the
Position of owing more on the mortgage than the house is worth but that’s likely the situation for many EV owners as used values are plummeting later in this video we’ll see how desperate some owners are to shift their EVS in the current secondhand Market if you’re after Eevee and Net Zero sanity you’ve
Come to the right place welcome to mguy British engineer and lawyer now Sydney YouTuber if you like my videos and content please be sure to like share and subscribe hit the notification Bell and drop a comment down below below one of the main problems I believe with EVS as
A value proposition is that one of the most expensive elements of the car the battery is essentially disposable unlike a phone or a tablet where we replace them every few years and it doesn’t matter if the battery degrades a bit in that time with a car it’s different it’s
A huge capital investment and we wish to preserve its value with a normal car you do this by regular servicing ensuring the service book is stamped repairing where necessary but the intrinsic value of the car does doesn’t change that much sure it gets wear and tear and any car
Will depreciate to some extent but a well-maintained 10-year-old internal combustion engine car is still a viable vehicle this is not the case with EVS where its intrinsic value does not remain the same the battery which is a significant proportion of the car’s initial purchase price is just a soggy
Bag of chemical reactions or should I say a very complex very expensive soggy bag of chemical reactions and at some point it will with 100% certainty fail or degrade to the extent that its value is reduced to the sum of the scrap metals I’ve been trying to think of an
Analogy it’s like buying a house but 30% of the purchase price is the potted plants inside you know they’re going to die off eventually so there’s no way you’d pay that proportion of the price for something so shortlived compared to the lifespan of the house but that’s
Exactly what you’re doing with an EV 30% of the price is are so bag of wet chemical reactions but this is just the tip of the iceberg when it comes to factors affecting EV depreciation as we can see no one wants used EVS making new ones a
Tougher cell too the shift away from cars with dirty combustion engines is running into a new hurdle drivers do not want to buy used electric vehicles EVs and that is undermining the market for new ones too in the 1.2 trillion us secondhand market prices for battery powered cars are falling faster than
Than their combustion engine cousins buyers are shunning them due to a lack of subsidies a desire to wait for better technology and continued shortfalls in charging infrastructures a fierce price War sparked by Tesla and competitive Chinese models are further depressing values of new and used cars alike threatening earnings at Rivals like
Volkswagen and stellantis as most new vehicles in Europe are sold via leases automakers and dealers which Finance these transactions are trying to recover losses from plummeting valuations by raising borrowing costs that is hitting demand in some European markets that were in the Vanguard of the shift away from fossil fuel powered propulsion some
Of the biggest buyers of new cars including rental firms are cutting back on EV adoption because they are losing money on resiles with 60 dropping Tesla models from its Fleet the problems are expected to intensify in 2024 when many of the 1.2 million EV sold in Europe in
2021 will come off their three-year leasing contracts and enter the secondhand Market how companies tackle this problem will be key for their bottom lines consumer confidence and ultimately decarbonization including the European Union’s plan to phase out sales of new fuel burning cars by 2035 there isn’t used car demand for EVS
Said Mr Matt Harrison Toyota motor’s Chief Operating Officer in Europe that’s really hurting the cost of ownership story warning signs around EVS appeared early in 2023 when Tesla started aggressively cutting prices in an effort to prop up sales that sparked a price War as other manufacturers followed eating into profitability for some and
Pushing up already steep losses for others prices for secondhand EV slumped by around a third in the year through October compared with a decline of just 5% in the overall used Market according to sales data from IC cars.com a website that ranks cars and dealers used EVS
Take longer to sell than petrol models even after significant price cuts the group said part of the problem is that the industry is handling secondhand EVS for the first time while combustion engine cars can be quickly valued via their age and mileage there are no tests in widespread use that determine the
Quality of a battery added Mr verigan Von naap the battery represents around 30% of an’s value and that share is expected to decline in the coming years according to Bloomberg nef well maybe at some point that will happen but if a hyai ionic 5 battery is $60,000 Canadian
Dollars and is enough to Total the car out after just one year there’s a long way to go to be sure some EVS are performing well years after their introduction with less than expected battery degradation said Mike Tindle an analyst of HSBC Tesla cars can sell quickly in the secondhand Market because
Of the Brand’s reputation as a technology leader and its regular Wireless software updates but that’s not the case here in Australia where Tesla Model 3s are sitting unsold on car sales for months even with prices slashed dramatically a situation which is not helped by Tesla constantly cutting the prices of its new
Cars which damages the used Market even more take a look at some of these listings 2023 model 3 48,000 pricing insights 17 price updates since September of last year total price decrease 177,000 and it gets worse 2019 Tesla Model 3 42,800 see the pricing insights 10 pricing updates since August
2022 so that’s nearly 18 months on the market $23,700 and this one is the worst $42,000 for a 2021 Tesla Model 3 it’s got over 100,000 km that’s probably why it’s going to be difficult to shift 10 price updates $27,000 and that’s been on the market
For over near well nearly 2 and 1 half years September 2021 and these are Teslas supposedly the most desirable of the EVS at the moment I can’t begin to imagine what the market is like for used MGS or bys or other cheap Chinese stuff if you need another reason not to
Buy an EV right now this one has to be pretty compelling any EV will depreciate far more rapidly than the equivalent internal combustion engine car for a multitude of reasons and the used Market if you want to move it on is almost non-existent do you really want to put
Your hard-earned cash into a soggy bag of wet chemical reactions that’s just about it for this video thanks for watching I really hope you enjoyed it drop a comment down below and let me know what you think if you have any tips or stories you can hit me
Up on Instagram or by email and I look forward to seeing you in the next one bye for now
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