Resale value of EVs

Much like combustion engined cars, the resale value of an EV depends on a number of factors

As technology progresses and governments aim to increase the take-up of electric vehicles, consumers will be able to choose from a variety of different models at different price points, from a range of brands. Much like ICE vehicles, this means that there is no silver bullet or uniform answer as to how the resale value of an electric vehicle will compare to other EVs or the wider market including combustion-engined competitors. 

However, there are some broad factors to look at when considering the potential resale value of an EV.

Vehicle manufacturer – perceived reliability and reputation   

The perceived reliability and reputation of the car manufacturer is one factor that can significantly affect resale values. An EV is from an established brand that is known for selling vehicles that are durable and don’t break down when properly maintained, will likely have a higher resale value than a new upstart brand that may only have recently begun selling cars locally, with unknown reliability. 

Research and analytics firms such as JDPower and IHSMarkit often conduct surveys evaluating the initial quality and reliability of various car manufacturers. While these surveys may be a useful source of information to look at, they are typically geared towards the American and European markets, and the results may not be transferable to the Australian context. 

Other related factors that can affect a brand’s perceived reputation include the brand’s dealership network and access to parts and service. A more extensive dealership network that offers a strong presence in regional as well as metro areas will give consumers greater confidence that access to parts and servicing will be easier, and that the brand will maintain a presence on local shores over the long term. 

Battery longevity

Battery longevity is another factor that may be critical in determining the long-term resale value of an EV. If the battery’s ability to hold a charge drops off significantly over a longer period of time, this will reduce the car’s range and therefore its suitability to be driven over long distances. This remains an important consideration, given our limited charging infrastructure. 

Most car manufacturers guarantee that an EV’s battery will retain at least 70% of its original charge for at least eight years (and/or usually at least 100,000 km). However, the extent to which an EV’s battery will hold a charge over a longer period of time, for example 15 or 20 years, is unknown and may depend on the specific model. If the battery can be affordably replaced over these timeframes, the depreciation of an EV may be reduced.

For more information on battery longevity, please see our EV Hub article on battery degradation. 

OTA (over-the-air) updates and subscription features

Cars today are becoming increasingly digitalised, and customers expect their vehicles to have the latest technology, including (but not limited to) features such as Apple CarPlay and Android Auto. 

Some EVs (and combustion engined cars) now feature OTA updates. This means that the car’s software and internal systems can be updated through a wireless Internet connection rather than having to visit a dealership. Depending on the car, this could mean everything from a simple map update for the built-in sat-nav system, to improving the performance of the vehicle’s active safety systems (such as autonomous emergency braking) or the addition of entirely new software features. 

OTA updates can therefore help keep the technology in an older EV current with newer models, and thereby improve resale value. 

The downside of cars having greater connectivity is that manufacturers can also lock certain features behind a paywall or make them subscription only, despite the car having the hardware necessary for the feature to work. Some car manufacturers, for example, have made heated seats or improved performance a subscription feature. This subscription may be tied to the owner rather than the vehicle, such that if the car is sold, the new owner would have to pay again to use these features, which could adversely affect resale values. 

For more information on OTA updates, please see our previous story.