Rapid Depreciation of Used Electric Vehicles Poses Challenges for Manufacturers

Fri 18th Apr, 2025

The shift from traditional combustion engine vehicles to electric vehicles (EVs) is motivated by numerous factors, including improved environmental impact, quieter operation, and ongoing technological advancements that enhance battery range. However, potential buyers are increasingly concerned about the resale value of EVs, especially since these vehicles, particularly luxury models, are experiencing significant depreciation shortly after purchase. While lower prices on the used car market may attract buyers, this rapid decline in value is causing considerable challenges for both owners and manufacturers.

Manufacturers of electric vehicles, especially those who rely heavily on leasing programs, are facing significant risks associated with the decreasing residual values of their cars. Luxury EVs, in particular, are often leased by first-time owners, placing the risk of depreciation squarely on the manufacturers. The residual value of a leased vehicle is inherently uncertain and can only be estimated, leading to financial unpredictability for manufacturers.

Recent reports indicate that automakers have had to revise their residual value expectations significantly. Volkswagen Leasing GmbH, for instance, reported a total residual risk of EUR1.86 billion for 2024, while BMW disclosed a write-down of EUR533 million in its 2024 financial statement as a direct result of altered residual value projections.

The extent of depreciation for used electric vehicles is highlighted by data from the German Automobile Trust (DAT) and Autoscout, revealing that the residual value of three-year-old luxury EVs plummeted from approximately 70% at the beginning of 2023 to just 49% by the end of 2024. Several factors contribute to this steep decline, including the vehicle's model year, mileage, features, and, crucially, the condition of the battery. Additionally, the cessation of government incentives for electric vehicles at the end of 2023 has significantly impacted resale values. The environmental bonus previously helped bridge the price gap between new and used EVs, but its removal has led to a sharp decline in demand for new electric vehicles.

Consequently, the used electric vehicle market has reacted with a noticeable drop in prices to make these vehicles more appealing. Currently, there is a notable trend in which luxury electric cars suffer depreciation of up to 50% within just one year of their initial sale. For instance, the Audi e-tron GT, which retails for around EUR126,000 as a new model, can be found on the used market for between EUR68,000 and EUR90,000 after just one to one and a half years of use and a mileage of 5,000 to 10,000 kilometers. Similarly, the BMW iX, priced between EUR83,500 and EUR105,700 when new, is often available for under EUR50,000 shortly after its initial release, depending on its mileage.

The Porsche Taycan also illustrates this trend, where the base model starts at EUR102,000, while high-performance variants can exceed EUR150,000. However, even well-equipped Taycan models experience steep depreciation, often being listed for around EUR100,000 just one year post-purchase, reflecting a reduction to approximately 50% of their original price.


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