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What Will The True Residual Value of a Used EV Be? Toyota May Provide the Answer.

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Used car salesman

Used car salesman

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If you're lucky you may already be on a waiting list for the 2011 Nissan Leaf. Or perhaps you've decided to get the 2011 Chevrolet Volt. If your next car is electric it could easily immunize you from fluctuating gas prices and ensure low running costs. But what will that shiny new electric car be worth in five years' time? If the Telegraph's Mike Rutherford is to be believed at best just 10% of the initial ticket price.

But with previous generation electric vehicles like the ageing Toyota RAV4 EV still exchanging hands for sums in excess of $30,000, is that analysis wholly accurate, or a highly skeptical piece of scaremongering?

High Ticket, High Depreciation?

It goes without saying that every electric car hitting the showrooms this year and for the foreseeable future will be a high ticket item, comparable with some premium brand cars from Lexus and Acura to name two.  But if previous generations of electric and hybrid vehicles have taught us anything it is that resale value does not track conventional charge.

Angular Rear Exterior View - 2004 Toyota Prius 5dr HB (Natl)

Angular Rear Exterior View - 2004 Toyota Prius 5dr HB (Natl)

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Take the Toyota Prius. Kelly's Blue Book lists a 2005 Toyota Prius 4D as being worth $8,835 for  a good condition example with 100,000 miles on the clock.  That represents a depreciation of almost $13,000 in five years.

Compare this to a 2005 Acura RSX, worth $23,650 when new. Of comparable condition, age and mileage to the Prius, Kelly value a good example as being worth $9,250 for private sale, a depreciation of $14,400. In other words, both cars depreciate at about the same speed. Yes, one is a Hybrid with high MPG while the other is a performance coupe.

These prices are for cars for sale in the Washington DC Metropolitan area, somewhere the Prius still enjoys high popularity. Different areas will result in different resale value.

Warranty Expiration ≠ Dead Battery.

In his article, Rutherford argues that after five years are up, the Nissan 2011 Nissan Leaf's battery pack will have ceased to function and will require an expensive replacement.  Nissan plan to warranty the battery and drivetrain in every Leaf for 60,000 miles or five years, whichever is soonest.  In short, he expects Nissan's battery pack to fail as soon as it is out of warranty.

But exceeding the mileage or age warranty does not indicate the battery pack is about to stop working.

If we take the Toyota Prius as an example we can see that many models quite happily exceed the 100,000 mile, 8-year battery warranty without a single hitch. Yes, some cars suffer battery issues well before the warranty is out, but it is more normal to see a battery pack last for a long time beyond the end of the warranty.  Failure is the exception here, not the rule.

2004-1009 Toyota Prius battery pack, second generation

2004-1009 Toyota Prius battery pack, second generation

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Toyota RAV4 EV Long Life Battery Pack Performs

The only pure electric car that Toyota made, the RAV4 EV, also exceeds expectation when it comes to battery life. Some RAV4 EVs have exceeded 200,000 miles on a single battery pack. Only recently, after between eight and twelve years of being used, have some started to fail.

And even with battery packs starting to age, second-hand RAV4 EVs are still exchanging hands for as much as the new ticket price for the 2011 Nissan Leaf.

Can You Say HOV Lane?

Any car with perks associated with driving it is going to retain some higher value over a similarly aged vehicle with none. One reason the Prius has enjoyed such popularity is the granting of HOV stickers in states allowing a single occupant Prius to use car-pool lanes in the rush hour. While this privilege has ended in many states for hybrids it is set to continue with EVs. If recent trends continue, HOV stickers can exchange hands for as much as $1,500.


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Comments (16)
  1. we also need to take into account the cost of battery packs. they no doubt will come down in price quite a bit after 5 years.
    as i stated earlier, we need to standardize those packs, so that any ev owner can buy the latest and greatest.
    the main thing that will hurt resale value of the first evs is improvements to the car itself.
    that doesnt happen today, cuz the gasoline car has been around for 100 years. so they try to sell us how cool and in fashion it is.
    with evs, there will be substantial improvements. once they start coming out with the motors in the wheels, that will hurt the resale value of every ev with a drive train.
    but the old ev will still do a pretty good job for its owner.
     
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  2. We drive our cars/trucks until there is nothing left of them anyway, so resale value is not a big issue for us. Let's just get on with it.
     
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  3. First off, the batteries will not cease to function after 5 years, their range will be less than original spec, but you will still be able to drive. So replacing the battery pack will not be mandatory. After all, the RAV4 EV, and Ford Ranger EV are all around 10 years old and still running on their original batteries.
    Even Prius battery pack do not need replacement after 100,000 miles. The only time they have needed to be replaced is when they are in an accident that damages them.
    So once again, an "expert" who doesn't know what the hell he is talking about dispenses advice, and gee what a shock, his advice reflects negatively on EVs.
     
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  4. lol noel,
    i just bought my 3rd car. the first one lasted 19 years, and i sold it to the state.
    the second one lasted 18 years, and i sold it to a mechanic who was gonna replace the engine.
    so i also dont worry much about resale value.
     
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  5. Unless energy storage differs from almost all other technologies, there will be cheaper and better devices available in six years. It is hard to believe that they will not be usable in a Nissan Leaf. The rest of the car should last almost forever, let's not quibble about brakes and tires.
    Therefore when Nissan is ready to deliver on my reservation, I shall buy a Leaf unless somebody comes out with a better ev before then. The Zotye looks promising but I do not want an SUV.
     
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  6. Desertstraw: energy storage does in fact differ from almost every other technology in the sense that it's considered highly disruptive by vested interests (Big Car, Big Oil, Big Finance etc)which do what ever they can to slow new technology in this field down. Well known is how the patent of NiMH battery technology used in the EV-1 and RAV4 EV was acquired by Chevron never to be allowed in plug-ins again. No doubt these nonsensical zero residual value scare stories can be traced back to anti plug-in FUD campaigns sponsored by these same vested interests.
     
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  7. hi desertstraw,
    this is why i keep clamoring about the boxes being standardized, so that what you say is true - that being that when a new battery system is available, the consumer can choose to purchase it, and simply replace boxes.
    hi chris,
    we have finally overcome that big oil problem. or at least it is now in their best interest. but oil no longer is gonna stop the evs from coming.
     
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  8. Where is the link to Nissan's warranty? I cannot find any claim from Nissan saying that the warranty is 60,000 miles. Their website says that the warranty has not been determined.
     
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  9. Chris O. and ev enthusiast, I agree with both of you.
     
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  10. EV enthusiast: Big oil needs to consider it's moves more carefully now I suppose since their little mishap in the Gulf of Mexico. Still, Chevron is already pressuring Obama not to delay further deep sea drilling, but maybe someone should point out to Obama that this dependency on ever costlier and riskier oil sources has a lot to do with Chevron's own policy of keeping the addiction going by abusing their patent rights on alternative energy sources for transportation like the NiMH patent. Maybe Chevron should be made to pay part of the Gulf mess for their little economic crime against humanity by delaying mass production of EV's by 10 years with their NiMH scheme.
     
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  11. The NiMH patent should be seized via Eminent Domain.
    The individuals at Chevron who orchestrated the obstructionist patent strategy should be charged with Treason because their crimes directly helped fund the Enemies of the US during time of war.
     
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  12. the nimh batteries arent as good as the ones coming out now, are they ? if so, the patent is basically worthless. it already did its damage.
     
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  13. If the current electronics (cell phones, laptops, mp3s, etc) are any indication of the future, the Auto Companies will not standardize batteries or the charging cables. Bottom line is that they have to make money somewhere. If general parts and maintenance is decreased you need find new revenue sources. They will be banking on people losing cables, damaging cables, and forgetting cables. And in 5-10 years when the battery needs to be replaced. "Sir, That will be $3000 for the battery, $795 for the connection adapter, $1000 for labor, oh and you will need a new cable, $405. And of course you will want 3 cables. Once for home, one for work and for in the car. Total is $6,010. Now add 5% state tax + 3% for the Road Maintenance tax + 2% environmental recovery fee and your Total is, $6,611. Thank you sir and have a nice day! Remember I am a Skeptic!
     
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  14. Jimza Skeptic and/or Nikki: do you know what (roughly, not trying to get too crazy on specifics) a "battery pack" costs. your comment contains great numbers and i was wondering if those are pretty close?
     
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  15. Actual battery costs as of today have not been released by anyone. The general consensus is that right now the pack costs about $10,000. Many sources believe that in 5-10 years the cost will drop significantly to the $3,000 range over time. Only time will tell for sure. So you need to take my numbers with a tea spoon of sugar.
     
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  16. My other comments about charging cables and connectors comes from actual costs for our electric fork lifts and pallet mules at work. They look like they would be the same type used for the Volt or Nissan Leaf.
     
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