EVs are depreciating much faster than gas-powered cars

Summary

The resale value of electric vehicles is collapsing worldwide, hurting private owners and fleet operators. The crisis became especially apparent when BluSmart, India’s pioneering all-electric ride-hailing service, collapsed in April amid financial fraud allegations. The Delhi-based company’s fleet of thousands of cars, originally worth over $12,000 each, suddenly flooded the market at about $3,000. For Tesla owners in the U.S., their 2023 Model Ys are worth 42% less than what they paid two years ago, while a Ford F-150 truck bought the same year depreciated just 20%. Older EV models depreciate even faster than newer ones. The crisis exposes the fundamental problem that nobody really knows what electric cars are worth in the secondhand market, as their value is largely tied to batteries with uncertain lifespans. “For gas cars, there’s a 100-year process behind them based on odometer and major maintenance schedules and the expected life of combustion engine parts,” said Andrew Garberson, head of growth and research at Recurrent, a Seattle-based startup that evaluates the wear and tear on used EVs to bring transparency to the secondhand market. “Electric cars have fewer moving parts, and a lot of the value of the car is tied up in one component — the battery.” A U.K.-based study found 3-year-old EVs lost more than half of their value compared with 39% for gas cars. Another study conducted by Boucar Diouf, an EV researcher and professor at Kyung Hee University in Seoul, found EVs in the U.S. can lose as much as 60% of their value over three to five years, compared with less than half for traditional vehicles. For fleet owners and operators — across sectors from ride-hailing to rentals to logistics — pledging to go green, this value disaster is threatening to derail the sustainability movement. Florida-based car rental company Hertz, which bought 100,000 Teslas in 2021, reported a $2.9 billion loss in 2024, driven largely by plummeting EV value, according to its February...