As analysts try to apply used-car value metrics to the growing population of used EVs, J.D. Power is applying a “pretty significant deduct” to the residual value of any model with a range below 275 miles, which the firm considers to be the current industry average, according to the report.
J.D. Power also is examining the effect of charge time upon residual value, while Black Book is building models for residual value taking into account both charge time and range, the report said.
These efforts to more accurately predict EV residual range come amid market volatility. The average 3-year-old EV held 66% of its sticker price for a brief period in October, marking the first time used EVs held their value better than the used-car market as a whole, according to Black Book data cited by Automotive News. Yet used EV prices were actually declining.
Following a price surge that started last spring, average prices for 2- to 4-year-old EVs began dropping in July, and plunged below the market average before the end of October, the report said. That mostly aligns with analysis done by the firm Recurrent, released in October and claiming that used EV prices had peaked.
Prior to the pandemic, non-Tesla electric cars saw markedly more depreciation than comparable gasoline vehicles—partly the result of incentives that pushed the market price far below MSRP from the outset.
Looking at listing/asking prices, the price hike on used EVs was even more pronounced—one of many indications of demand exceeding supply. It’s a trend that was already underway before the pandemic, by some indications; in 2019, used EV prices had started tracking higher. That trend seems to be running its course, although it remains to be seen exactly how low used EV prices will go.