- EVs depreciate faster than any other category of cars.
- The Tesla Model 3 holds its value better than any other EV in the study.
- Hefty discounts and government incentives are causing EVs to depreciate more quickly.
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Electric vehicles aren't holding their value like other cars.
A recent study of 5-year depreciation rates by iSeeCars found that the small group of EVs that have been on the market for at least five years have the worst depreciation across all major vehicle types.
On average, electric cars have a five-year depreciation rate of 49.1%, the study found. That's compared to an overall industry average of a 38.8% five-year depreciation rate.
As the electric vehicle market matures, the automotive industry is still working to understand the depreciation formula for battery-powered cars.
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Between new technology like lithium-ion batteries which have much less road testing than 100-year-old internal combustion engines, and the complex web of discounts and government incentives used to bolster EV demand, it can be hard for any electric car to retain value consistently.
"Used electric vehicles have always suffered higher depreciation than equivalent gasoline cars," iSeeCars executive analyst Karl Brauer said in the study. "This pattern will continue until electric vehicles don't require heavy incentives to sell and consumers gain confidence in their long-term ownership costs."
Here are the five electric models iSeeCars tracked in their study, all of which have been in production for at least five years.
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1. Tesla Model 3
The Tesla Model 3 has the best value retention at a five-year depreciation rate of 42.9%. That outpaces the average for the segment by 6.2 percentage points, but still lags the industry average of 38.8%.
2. Tesla Model X
In second place is another Tesla: the Model X. iSeeCars found that the Tesla SUV has a five year depreciation rate of 49.9%.
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3. Nissan Leaf
The Nissan Leaf, which has been on the market since 2010, has a five-year depreciation rate around 50.8%, the study found.
4. Chevrolet Bolt EV
The Chevrolet Bolt EV, long General Motors's only electric car option before new models began rolling out in recent years, comes in second-to-last with a five-year depreciation rate of 51.1%.
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5. Tesla Model S
Finally, the Tesla Model S, the oldest car in Tesla's lineup, notches a five-year depreciation rate of 55.5%.
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