Used Electric Vehicles – How Much Is the Rest of Them Worth?

Environmentally friendly and popular with employees, electric vehicles seem to be a good investment for many fleet operators. But what seems sensible at the beginning can disappoint at the end of the term.  Because you can only determine the “Total Cost of Ownership” once you have sold the vehicles. That’s why the central question is: How much is the rest of your electric car worth? Only when you have all the numbers for the calculation can you assess holistically and for your individual case whether investing in an electric fleet is worthwhile.

There are currently clear signals from the market on this question: the sharp decline in residual value is continuing and the resale value of electric vehicles is falling faster than that of combustion engines. We wanted to know more. That’s why we conducted our own analysis and examined the facts using meaningful market data and the experiences of our Holman experts.

If you want to find out something about the residual values ​​of vehicles, you have to look at the used car market, which is directly linked to the residual values. The chart above from Autoscout24 clearly shows that used prices for electric vehicles have fallen by 30% compared to the same quarter last year. However, the level of combustion engines remains stable.

Sales director Stefan Heck of AutoScout24 – one of the largest used car exchanges in Germany – predicts that it is only a matter of time before used car prices for electric vehicles fall below those for combustion engines. Since the price pressure on the brands remains high, this would have a major impact on the leasing of electric vehicles, according to the sales manager.[1]

However, we wanted to know more about it and have the average resale figures of Hyundai Kona and Tesla Model 3 with the common leasing combination of 36/10,000 km p. a. examined in detail for you.

The Hyundai Kona example shows that the resale value achieved has decreased in recent quarters, both in the open market (blue) and through remarketing (green). The market has now approached our average sales values.

When looking at the Tesla Model 3, the fall in the price of used cars for electric vehicles can be observed even more sharply: here, in particular, the dealer purchase price on the market is rapidly plummeting and falling by 10,000 euros within a year.

Since the residual value is strongly based on the used car market, we can say one thing: the downward trend is clear and obvious – this is probably unsettling for fleet managers. But what are the possible causes of the decline in the resale value of electric vehicles and what options do you have?

Discounts on Electric Cars Confirm the Downward Trend

An expert from the Center of Automotive Management in Bergisch Gladbach also confirms this: “Used electric vehicles are currently in the car dealers’ yards. Recently there has been a major low in demand, which is why there have been falling prices and many discount campaigns – e.g. B. at Tesla – for electric vehicles.”[2]

Just a week ago, Tesla announced another discount campaign in response to poor sales for its Model Y, which has already been reduced for the sixth time in a row. This is due, among other things, to the sharp decline in newly registered electric vehicles, which at Tesla is 64% compared to the previous year.[3]

This development is also confirmed by the graphic addition of our own evaluation based on Schwacke:

Explanation: LP = list price, net; ETX FC = Schwacke Forecast

It can also be clearly seen here that the list price of the Tesla Model Y fell sharply at the end of last year and at the beginning of this year due to the discount campaigns. This in turn also has a negative impact on the residual value (ETX FC), which is also falling sharply after a constant trend at the end of last year – not a good development.

You will therefore certainly ask yourself what effects this will have on you as a fleet manager when it comes to leasing, as the residual value risk is known to be borne by the leasing companies.

That’s not entirely true – the leasing rates are based on the predicted residual value (resale value) of the vehicles, which is why an extraordinary deterioration of these will probably be factored into the future leasing rates.

If the residual values ​​of electric vehicles continue to fall, the risk for leasing companies and thus for manufacturers who use mileage leasing as sales financing will become ever greater. This is also proven by the Center Automotive Research in Duisburg, which published the following figures in a current report – based on the leasing combination 36/15,000 p. a. – published:[4]

• Car manufacturers cover 15% of the loss in value of electric vehicles

A risk that lessors certainly want to bear. What is clear, however, is that the trend is continuing, or at least that is how BMW CFO Walter Mertl sees it. Manufacturers depend on subsidies (which are being eliminated), new car production and supply and demand. What will happen next is currently unclear.[5]

Conclusion: These are turbulent times when it comes to the residual values ​​of electric vehicles. There is currently a clear downward trend. This will likely impact lease prices. On the positive side, there are high discounts on purchases. You should definitely consider this in your procurement strategy. The topic is not only driven by the market but is also strongly influenced by politics and society. There can always be positive – or negative – surprises. One thing is certain: as Holman, we are closely following developments in the market and will always inform you about new trends. Please do not hesitate to find out about further developments in the automotive market and/or about our products on our homepage.

[1] Article: Online edition of Handelsblatt: “Used electric cars will soon be cheaper than diesel vehicles”; March 28, 2024, 7:40 p.m.

[2] See article: Online edition of Handelsblatt: “Used electric cars will soon be cheaper than diesel vehicles”; March 28, 2024, 7:40 p.m.

[3] See article: Online edition of Handelsblatt: “US vehicle manufacturer reduces prices for Model Y by 6,000 euros”; June 11, 2024, 3:26 p.m.

[4] See article: Online edition of Handelsblatt: “Used electric cars will soon be cheaper than diesel vehicles”; March 28, 2024, 7:40 p.m.

[5] See article: Online edition of Handelsblatt: “Used electric cars will soon be cheaper than diesel vehicles”; March 28, 2024, 7:40 p.m.