NADA: Prices of Used Plug-in Electric Vehicles to Drop 30% in 2013

Looks like a win/win for someone that wants the technology but couldn't afford new.

 

That may be a tough call, since it's basically the same car.

 

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The low 14% depreciation of a Toyota is why I feel Prius Hybrid is one of the most heavily taxed cars in northern Virginia...and that's before they added on the new $64/yr "Prius" tax .​

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The implication is a Plug_in hybrid has Federal tax credits and defacto annual car tax credits in VA, and may make more sense than a hybrid moving forward (eg; used Plug_in).​

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Interesting question if the Fed tax credits actually cause or contribute to the depreciation. I suspect PiP depreciates more than a non-PiP.​

 

it will be regional on the pip. low in cali due to demand and high in the northeast where you could get a base fro 25K after incentives and tax credits. it's really not depreciation in that case though. i don't think range has much to do with it.

 

The Fed Tax credits are most of the depreciation. When you can buy a new car and get a 7500 credit, the consumer of the used car expects to depreciate from that point, but NADA wants to make the PHEVs look bad so compute from MSRP (i.e. before discounts/credits). For a 40000, that is an 18.75% depreciation just from the credit.. For a 42,000 Volt (i.e. multiple optoins) with a 4000 discount + 7500 the net price is 30500 after credits/discounts for a new cars. Thus its instant 27% depreciation.. so the fact that the average volt is selling for 31000 actually says they are holding their value, after discounts/credits, very well.

 

Isn't NADA the same group trying to block Tesla from direct selling?

 

I agree with the Dr..

My PIP depreciated heavily due to tax credit and other incentives. My Prius Three didn't depreciate nearly as much. I know from experience that dealers will devalue a plug in based on the available incentives. The amazing lease rates due to such incentives make buying a used but overpriced plug in unattractive to a lot of consumers.

Articles like these are very misleading.

 

I would take the article with a grain of salt.
As others, have commented, NADA is hardly an unbiased source.
They are heavily invested in gasoline-car inventory (make that NEW gasoline-car inventory -since I don't think most used car dealerships are part of NADA- so a used EV loses on both counts: not gas, not new)

Given this perspective, what could be the motivation for NADA to release this type of data? To us here at priuschat.com, it may seem like great news because our first instinct is "Hey great! Now I can go out and get a used EV for a real low price."

We need to to bear in mind, though, that this is probably not the first instinct of the average Joe out there. He/she's more likely to say, "Aha! Those EV prices drop like a rock as used cars. I knew they were unpopular and/or unreliable. This data proves it."

Depending on his/her personal bias towards EVs -and politics-, the average Joe might also think:

- That the price drop confirms the unpopularity of EVs, if not for being 'forced' onto the public with incentives
- That battery technology is suspect, and will prove unreliable in the long run, and risky if out of warranty
- That the risk of putting extra $ up front on an EV is only exacerbated by the lower resale value, especially if they find that the EV did not meet their needs, forcing them go back to a gas or hybrid car

I realize I am being cynical here, but my experience with reading internet comments about the 1st generation of hybrids like "You'll need $10,000 battery replacements every 50,000 miles" -and so on- has made me so.

Of course, those hybrids have proven themselves, and I believe the Prius has one of the best resale values. The same cannot be said of the 1st generation of EVs/PHEVs. Time will tell.

With that being said, here are some (less cynical) ways to look at why the prices drop so much:

- People have genuine doubts about the battery holding up, and don't want to buy (or can't afford) a replacement pack. Stories about the LEAF prematurely losing range in hot climates like Arizona don't help.
- Gas prices are 'low'. Just as Prius resale values shot up during the $4.50/gal of July '08, much the same would hold true with used EVs in case of a $5+/gal spike
- People are concerned with the utility of the vehicle past the warranty. This is a twist on the battery-reliability fear.
LEAF loses all practicality with a battery pack that is severely degraded 50% or more. Volt becomes more or less a 45mpg hybrid car, and PiP becomes more or less a 60 mpg hybrid car, after both lose all effective EV range. Thus, all things being equal, the amount of depreciation should be LEAF>Volt>PiP.

Me personally, I agree with other commenters. This is a great opportunity to go out and get an EV for a steal! Most of here at priuschat.com know that EVs and hybrids go to great lengths to protect and extend the longevity of their battery packs (by controlling depth of discharge, temp, etc.) That's why the liquid-cooled and 50% DoD of the Volt make it a better bet than the air-cooled and 90% DoD of the LEAF. If the average Joe out there doesn't know this stuff (or is biased), then it is their loss and our gain! (We call that 'information asymmetry' in economics ).

 

Vastly different TCO and utility, however. Especially when regional electric kWh rates are also factored in.

 

What I'm talking about is when the uninitiated looks at a standard hatchback and a PiP and wonders why the PiP is much higher in price, even though they look the same.

 

No doubt, bewildering.

 

If you go into a Toyota dealership looking for a Prius, a salesman generally won't show you a PiP unless you specifically ask to see one. They don't want to go through the explanation of why it's $7000+ more than a standard Prius.

 

except for the guy in the other thread who said the salesman tried to talk him into one, but he wasn't buying the hype.

 

Good point! GM will have to face the truth on expired leased Volts coming back to the dealers' lots. A used Volt would be a great used car, IF, GM can give the dealerships pricing flexibility and allow the dealers to make a profit. The sooner GM gets its' head out of the sand, the better.

DBCassidy

Ummm, when I bought my Prius, I didn't care about Fed Tax credits. I bought it for the economy of saving gas, world leading reputation, reliability, affordability, and dependability. Also (this is unheard in a GM dealership) my Toyota dealership retains not only a vast majority of their customers but also their employees!

DBCassidy

 

The Volt has a 16kilowatt battery and 10 for driving and 6 reserved.
I wont see MILEAGE loss till after ~10 years.
Chevy thought ahead.

As per the wiki:
The Volt's battery is guaranteed by General Motors for eight years or 100,000 miles (160,000 km), and will cover all 161 battery components. GM estimates that the Volt batteries will degrade by 10 to 30% after 8 years or 100,000 miles.GM has applied for a patent that may allow technicians to quickly and cheaply recover some of the performance of degraded battery packs.The Volt’s battery management system runs more than 500 diagnostics at 10 times per second, allowing it to keep track of the Volt’s battery pack in real-time, 85% of which ensure the battery pack is operating safely and 15% monitor battery performance and life

 

So they did deduce one of the primary reasons for the low re-sell value on page 6:

"Therefore, at a minimum, late-model used plug-in prices must logically max out below their new MSRP minus the credit. This is one of the primary reasons used plug-in EV value retention significantly lags other fuel types. To put it another way, tax credits effectively reduce both new and used vehicle prices in a manner similar to manufacturer cash incentives."

Then I looked at the date of the data "NADA values from April 2013." I remembered that we bought my wife's PIP in April with a $4650 Toyota rebate and 0% for 60 months + $2500 Fed tax credits. So I would like to see the data quarterly to see if it is a stable trend or abnormality during this limited (not national) aggressive rebate for the 2013 PIP that ended in April 2013.

 

There are indications of pent-up demand for lower cost EV/PHEV from buyers who did not have enough tax liability to take advantage of the federal tax credits. I think these buyers will be at the retiree end more than the student end of the age spectrum though, but I could be wrong.

The "rapid depreciation" will wilt as the tax credits expire, but the expected cost reductions might outpace the loss of tax credits, as they should.