Interesting subject.
EV residuals crashed after the parts shortage following Covid was resolved. Prior to this crash they were artificially high, some to the point where you could own the car for a year and still sell it for a profit. Then some idiots thought that was an advantage of EV ownership and were surprised when that stopped.
Secondly, there’s been a lot of communication around ownership of EVs from new, helped by corporate benefits and sales share targets. There’s not been much about ownership of EVs for those who would be the typical ex-fleet customer. Those who buy at 2-5 years old and change regularly having seen the worst of the depreciation already happen on the vehicle. These people will typically have a car that’s well within its HV warranty (battery, motor and associated parts), some within the warranty for the rest of the vehicle. However, those who talk to these potential customers all hear lots about failure and the excessive costs of replacement of the significant parts. (£20k battery anyone?)
There’s insufficient demand, hindered by a lot of BS around EVs from various sources. There’s genuine concern for reliability, not because the theory isn’t positive but because the data doesn’t exist in sufficient quantities around 5-7 year old versions of the current models. As technology evolves, older models are now of a historic technology. This doesn’t help persuade people to buy a used EV.
What’s surprising, though, is that in far too many cases the ownership of a used EV could be a wise choice. If charging at home is an option, the savings are phenomenal. Reliability of high voltage elements are still better than ICE, there’s simply mechanically less to go wrong. However, the rest of the vehicle are still equally as liable to fail as any other vehicle. That’s where there’s an issue, these Chinese manufacturers are untested over a prolonged period, nobody knows whether a Chinese built suspension will last, whether the steering could fail or whether the trim will fall off. So, currently, to buy a used Chinese EV which is likely to exceed 80,000 miles within this next period of ownership is effectively as much a pioneering venture as owning the original cars were. Not many used car buyers are of a pioneering mindset, they’re the ones who bought new.
Until all this has been resolved, residuals won’t recover to the usual levels. That means putting new EV manufacturers on the Scheme is a huge risk as either failure (mechanical or business) could become an issue and residual values in 3 years are utterly unknown, almost unpredictable. Even pricing known and popular models needs to include high depreciation despite the possibility that, in 3 years time, used EV retail may have taken off.
I'm Autistic, if I say something you find offensive, please let me know, I can guarantee it was unintentional.
I'll try to give my honest opinion but am always open to learning.
Mark