I feel what this article fails to mention is how the depreciation of EVs compares to depreciation of gas cars. Apparently, based on google searches, cars depreciate 15% when driven off the lot, and then a further 15% per year after that. So it looks like EVs are depreciating quicker.
This would definitely be a good deal, as they also have lower operating costs.
I'm really curious to see how the used market shakes out when it becomes time to play hot potato with the inevitable battery array replacement. Gas cars need work to but that work is less costly and they can take a whole lot of neglect.
When it's time to replace, you'll get a larger battery for less money. You may be able to sell or reuse the old battery for stationary power storage.
Nissan Leaf (one of the oldest BEVs) launched with 24kWh batteries. Now it has 40kWh for the same price (even less if counting inflation), and 64kWh upgrade options.
Batteries tend to degrade 1%-2% per year, and there's no breaking point when you have to replace. In the Model S's (another old EV model with over a decade of data available) the cooling system tends to die sooner than the battery it cools.
BEV battery recycling is still in infancy, because EV batteries are lasting longer than expected.
The battery is the achilles' heel of EV's. An ICE engine can last 20+ years if you take care of it. An EV needs a battery replacement at the tune of $10K+ after 10 years at best. I think once they make longer lasting and/or cheaper batteries, this difference will level out.
FWIW I drive a Toyota ICE and fully expect it to last to 200K+ miles and 20 years. If I decide to trade it, it would keep a heck of a lot of its value vs a Tesla. Those things depreciate like produce.
If theres no road salting a car can last literally forever. Especially older cars that were built on solid platforms. So many old big block trucks or diesel mercs in socal still working fine after 40-50 years. I see even older cars too, some of them beat to absolute crap with hardly any paint left on the metal but still in service.
I did the math on the Toyota and based on how many miles I drive in a year (I work at home) and the expected life of the vehicle, it'll run reliably until I'm 169 years old. :)
The thing is with the used car market is that maintenance cost is not paid by all the owners. Its paid only by who happens to be holding the hot potato when the battery is screwed, and most people with means aren't holding a car to 150k miles, that's about how many miles an ICE car has in the maybe $5kish used range. The sort of person buying a $5k car can't afford a $10k battery. They might not have access to $10k on a line of credit either. The worst similar thing that could happen for an ICE car is a timing belt going before you replace it and screwing up the engine or the automatic transmission needing replace, both issues much less costly than a $10k battery but also costly enough that people sometimes walk away entirely from the car.
I feel like the battery cost issue is being hand-waved by too many people here. For most people driving a car with well over 100k miles, spending $10k to replace a battery is a total non-starter. In addition to batteries degrading, there's also the risk of an accident. Some crashes that would be fixable for an older ICE car will require replacing the battery in an EV at a cost far greater than the car would be worth, making it non-viable. The battery is a risk factor that many people already worried about their finances won't want to take on.
> For most people driving a car with well over 100k miles, spending $10k to replace a battery is a total non-starter.
Well do the math with prices instead of miles.
If you think you need to replace the battery soon, and the EV is $8k cheaper, it's a tempting purchase. Just don't spend the $8k on something else.
If that's impossible because the battery car would have to go below free, then that could be a problem. But that's still way cheaper than EVs are right now. I wish we had that problem! And at that point in the future, the fix is cheaper batteries, and it will happen.
> Some crashes that would be fixable for an older ICE car will require replacing the battery in an EV at a cost far greater than the car would be worth, making it non-viable. The battery is a risk factor that many people already worried about their finances won't want to take on.
I don't think the difference between "4% chance it's totalled in the next few years" and "5% chance it's totalled in the next few years" is a deal breaker. And that math is affected by so many other model-specific things too...
EV batteries don't tend to suddenly die, do they? You can negotiate a lower price for a weaker battery, and you don't have to replace it the moment it hits 80% capacity.
And we're currently talking about cars that are worth significantly more than $5k. An extra 30% to fix it up is very different from an extra 200%.
A colleague of mine bought a Tesla. He was looking to trade it up for a newer model after a couple of years and it depreciated probably $30K (nearly half) if I recall correctly. He absolutely loves the car, but nobody wants to take on that type of depreciation hit.
That's something worth nothing, but most of that is unrelated to the battery, and I don't see how it has anything to do with the rest of this comment thread.
I suspect a lot of that depreciation has to do with the battery life and replacement cost. For the current used market it's pretty drastic. I'm not sure if it's just a flooded market, a fad ending, people just don't like EV's after owning them, Tesla cutting prices, or what. Perhaps some of all of that.
A recent study from iSeeCars.com showed the average price of a 1- to 5-year-old used EV in the U.S. fell 31.8% over the past 12 months, equating to a value loss of $14,418. In comparison, the average price for a comparably aged internal combustion engine vehicle fell just 3.6%.
The Tesla Model S topped the list of EVs that depreciated most over five years; it lost 55.5% of its value, according to the analysis. Rounding out the top five were the Chevrolet Bolt EV (-51.1%), the Nissan Leaf (-50.8%), Tesla Model X (-49.9%) and Tesla Model 3 (-42.9%).
Overall, the average vehicle lost 38.8% of its value after five years, according to the analysis. Trucks retained the most value (depreciating 34.8% over five years), followed by hybrids and SUVs, which depreciated 37.4% and 41.2% respectively.
Environmental guilt only goes so far in terms of sales. For large adoption, the depreciation problem needs to be solved. Wealthy people (1st buyer) can afford to throw money at EVs over and over again and usually keep their vehicle only 2-3 years. Middle class (2nd buyer) need a dependable car that costs less per month (cost minus sell value) and lower class people (3rd buyer) need a vehicle that will last forever. The current state of EV's only satisfies the first and maybe some of the second buyer market while an ICE satisfies all three.
Well apparently the average car loses 42% of its value after three years, so if that Tesla lost an extra 10% that wouldn't be a huge difference.
5-year depreciation can be anywhere from 20 to 60 percent depending on model, and that's just looking at gas cars.
Edit: Oh you added a lot more. The wall of all EV prices falling will happen less and less as the tech matures. And even with that factor, they're still not at the bottom of car depreciation lists after 5 years.
It is not clear to me if you are deliberately mixing in a bunch of non-equivalent math.
You say that the average price of a used EV fell more than the average price of a used ICE as if that was a bad thing. But you do not tell us the corresponding statistic for prices of new vehicles. What if the average price of new EVs fell 50% but the average price of used EVs fell 31.8% while the average price of new ICEs rose 25% and the average price of used ICEs fell 3.6%?
In general I would consider lower EV prices to be a positive development. Your barage of numbers seems aimed at confusing the issue. Can you provide more clarity?
Seeing as so many of these comments are related to battery replacement costs, I wonder if this will cause Tesla to take a larger hit than most automakers in the models where the battery is part of the frame. Are these even replacable?
> Joe Biden’s climate agenda is all about new-EV sales.
The unstated bit is American new-EV sales.
> Electric vehicles made up about 8 percent of new car sales in the United States last year, compared with more than a quarter in China, where new EVs can go for about $10,000 or less.
Except, we've also made those unaffordable by
> Biden has quadrupled tariffs on electric vehicles from China — from 25% to an eye-watering 100% — in a move designed to bolster U.S. jobs and manufacturing.[1]
If it was all about new-EV sales, we could set the EV tariff to 0%. A $10k vehicle would indeed increase sales in a way that's congruent to a climate agenda that's all about new-EV sales.
The real story is that agendas are a function of politics, but we kind of already know that. The difference in outcomes ie: the differential gain in EVs being driven between these two scenarios is traded away in return for votes.
You can find balance. You can create a tariff structure where legacy auto is only protected if they’re producing the vehicles at the desired affordable price points. If they don’t produce them at that price point, you let China and BYD steamroll them to deliver the necessary consumer excess and climate goals.
Otherwise, you’re just using regulatory capture to protect legacy auto profits and overly expensive vehicles. Protect US labor (within reason considering the value of a domestic manufacturing base and supply chain), but don’t protect the profits.
> If they don’t produce them at that price point, you let China and BYD steamroll them
The problem is that they've already proven themselves unable or unwilling to produce affordable EVs any time this decade, so allowing Chinese competition at any reasonable tariff level will almost definitely doom them. For the government, it's a "damned if you do, damned if you don't". And the automakers are clearly betting that the government will protect them no matter what, even if they're suicidal. When companies like GM or Boeing play chicken with the government, they know the government will swerve first.
If they actually cared about climate, they would let you take that $7k EV rebate they were dangling and apply it towards ebikes, all $7k of it. Of course this would be seen as rocking the boat too much, I am sure.
Protectionism in general tends to irritate me. The kind of political nonsense exposed by the parent comment is particularly frustrating for me.
That said, my own policy would result in even more extreme trade restrictions for completely different reasons.
I think it is absurd to impose extensive regulations on some players but not all players. It makes no sense to me that I can walk or click into a store where two identical products are offered but the rules imposed on each producer are so different. One is regulated in the age of employees, the safety requirements for employees, the working conditions of employees, environmental protections, and so forth. The other is allowed to ignore all those considerations. When the US government imposes all those regulations on US players it is essentially making a rule that US companies are not allowed to compete.
I think that USians like to complain about government interference but actually support most of the restrictions they suffer. They don't want to see 10-year-olds in factories, or toxic effluent flowing into waterways. We may not all agree on all the regulations but we generally agree on most of them. Yet we are not willing to impose those restrictions across the board on all participants in US markets.
A company that plays by USA rules inside the USA cannot escape the costs imposed by those rules. So two identical products show up on the same shelf with drastically different price tags. It's no surprise that the higher-priced item does not sell. So if you want to sell your products inside the USA you are forced to move your production outside the USA and damage the labor force and ecology of some other part of the world.
There are two obvious alternatives to the existing status quo. One is to remove restrictions from producers within the USA. I do not advocate for this and don't think most USians would tolerate this. The other obvious choice is to impose USA regulations on the production of any product sold inside the USA. I do advocate for this but I don't think most USians would tolerate this either. The obvious effect on prices would be untenable for most USians. It would be political suicide to support such an action.
Yet, as the parent comment highlights, we see arbitrary trade restrictions for politically powerful industries despite the effect on prices. Clever appeals to nationalism and other hideous ideologies can sometimes produce public support for good policies for terribly wrong reasons.
In the case of EVs you have a very interesting conflict of choosing to allow irresponsible companies to do irresponsible things in order to create cheaper products that might save the environment. Or do you force companies to be environmentally responsible even if it makes environmentally safer products more expensive. (This ignores, of course, the whole debate about whether EVs are, in fact, environmentally safer. It also ignores other price factors like labor which might have a greater effect on prices than environmental protections. But it makes interesting conversation.)
If a non-USA producer can play by the same environmental protections and most of the same labor protections as the USA producers and still put a less expensive product on store shelves in the USA, I don't mind allowing their product into the USA. Of course, if that ever came to be the general case we could start worrying about the rest of those labor rules. But right now we are so far away from a level playing field that an abrupt leveling would cause too great of a shock. I wonder if USians could agree on what constitutes low-hanging fruit in any effort to level the playing field.
> China, where new EVs can go for about $10,000 or less
This is the part that hit me. In America we have no idea how much we are overpaying for things. There are plenty of reasons, sure, but at the end of the day things are wildly expensive with little to no acknowledgment from the government.
I mean, the US already has forced labor (i.e. prison labor).
And for what it worth, China is leading the way in green energy transition. They are pushing it much faster and adopting it way better than anything the US has historically tried. Remember they only have a few decades into their own industrial revolution compared to the West's hundreds of years and they had already exceeded most if not all other countries in terms of progress.
The US doesn't even have a functional high speed rail system yet. Meanwhile, China built its own national rail network in less than 2 decades.
Almost like you can get amazing things done in a short time if you get everyone pulling in the same direction, willingly or not...
But I agree, the massive amounts of cheap solar panels and EVs has and will continue to make a significant impact. It sucks that they're built on such lousy foundations though...
The government is doing what it can to keep things expensive to insulate domestic industry from global changes. This is entirely on purpose. 266% tax on chinese steel, 25% tariff on pickup trucks, 30-50% tariffs on washing machines, 100% tariffs on electric vehicles, 50% tariffs on solar panels, etc.
This isn’t even getting into the regulatory capture which prevents foreign products from being used/sold in USA.
Many Chinese goods are great. But if it's an end run around regulation, it is not in the US's best interest. Ralph Nader already fought this fight and won back in the 1960's with the Chevrolet Corvair. The Ford Pinto had the gas tank between the rear axle and the rear bumper, creating a death trap on rear collisions.
These are a few issues of goods from China being an issue in the past:
The BYD Seagull, which is what most people are referring to when talking about $10,000 Chinese cars, has European homologation. IOW, it meets European safety specs for freeway use.
It's the $5000 Chinese cars that are missing the safety features.
Does anyone know what collision repair costs are like on non-Tesla EVs? This seemed to be Hertz's biggest problem with Teslas, and I've heard many horror stories of high costs and long waits for Tesla repairs.
As far as Teslas go, they seem to follow a similar value curve to German luxury cars -- you can get them very cheaply if they're 5-10 years old, because the parts are so expensive to keep them running, and a lot of the status wears off when they're not visibly the newest model. This I suppose is less true with Teslas where the visual style isn't that different from 9 years ago.
As in, they're finally getting into a sub-$30K range.
Meanwhile, I'm going to drive my 2010 Honda Fit (that I bought for $5K in 2017) practically forever.
I'm making 6 figures as a software engineer, as does my wife. We have no kids.
I have no idea who are these people buying new cars, or who are all these people for whom $30K is "cheap". I can pay that out of pocket, but unless held at gunpoint, I won't.
There are many ways to make EVs marketable, but the key is make them goddamn cheap FFS.
And the answer to that is infrastructure, not technology.
We could make $5K glorified golf carts street-legal, and not requiring a license. For many people, that's enough for their grocery store runs / work / school commute.
Oh, they won't fare well in a collision with F-150? Then maybe we can remove those from the streets outside specific delivery and maintenance hours, and impose a lower speed limit for heavier cars.
That's before we get to the dangerous idea that we could charge the EV's as they go if we put wires into our streets... And perhaps add electronic signaling to make self-driving an easier problem to solve.. Maybe even a guiding rail (or two) to define lanes instead of paint that the weather can strip away...
And if I may dream, this would enable us to replace tyres for traction with higer-efficiency rolling stock, and even link up cars going in the same direction on regular routes to reduce drag (and traffic).
> Oh, they won't fare well in a collision with F-150? Then maybe we can remove those from the streets outside specific delivery and maintenance hours, and impose a lower speed limit for heavier cars.
A few things:
1. We should tax vehicles according to their road damage, i.e., O((weight/axles)^4*axles);
2. Vehicles with bumpers/hoods higher than Xcm should never be allowed in the left lane;
3. Vehicles with gas mileage worse than 3g/100miles shouldn't be allowed to go over 45mph.
My neighbors almost universally run small businesses; and, almost universally, slap their business sticker on their 100k$+ 250s & 350s and then take the whole cost as a "write off" for "tax purposes". If the IRS was doing their jobs, these fuckers wouldn't be on the road — they'd be paying off fines and/or in prison for fraud.
>1. We should tax vehicles according to their road damage, i.e., O((weight/axles)^4*axles);
Fair, though keep in mind that EVs and specifically their batteries are damn heavy putting them as sedans right up there with the bigger pickups and SUVs.
Taxes on EVs will also have to compensate for fuel taxes that would not apply to them.
>2. Vehicles with bumpers/hoods higher than Xcm should never be allowed in the left lane;
Here in America we deal in freedom units, not metric.
Also, Americans love their RVs and big muscle trucks (both pickups and 18 wheelers).
>3. Vehicles with gas mileage worse than 3g/100miles shouldn't be allowed to go over 45mph.
Hope you'll like your groceries and all other shopping becoming quite a bit more expensive to make up for slower transport. 18 wheelers are the life blood of the American economy.
>slap their business sticker on their 100k$+ 250s & 350s and then take the whole cost as a "write off" for "tax purposes".
What they are doing is buying the vehicle using company funds as company equipment and then writing it down as a loss on their Income/Loss sheet. There's nothing wrong with it and you should do so for any company purchases.
You might complain that the line between personal and commercial is being blurred and you would be right, but in the small business world that line is blurry for both practical and "less than justifiable but tolerated" reasons.
Obligatory disclaimer: I'm not a CPA, none of this should be understood as financial advice. Consult a proper CPA or financial advisor for financial advice.
>What they are doing is buying the vehicle using company funds as company equipment and then writing it down as a loss on their Income/Loss sheet. There's nothing wrong with it and you should do so for any company purchases.
I think the "fraud" comes from the fact that they use it for personal purposes but fail to declare it on their income tax returns as they should[1]. For the typical case of a general contractor or an electrician using their "work" pickup truck to buy groceries or even to commute, that expense is not tax-deductible and must be declared as a fringe benefit.
I believe the argument is generally that they are advertising for the business whenever driving a company vehicle with logos on it.
As the GP said, the line is very unclear for small businesses. It isn't technically fraud, though, if our current laws allow it. Fight to change the laws if you want to, but until then it can't be fraud.
>I believe the argument is generally that they are advertising for the business whenever driving a company vehicle with logos on it.
The linked IRS document specifically says
>For example, a pickup truck qualifies if it is clearly marked with permanently affixed decals, special painting, or other advertising associated with your trade, business, or function and meets either of the following requirements.
Cis person who drives a big truck in Washington state, don’t leave us out! To be fair it’s a cybertruck so I’m not sure how gender affirming it is. The manly gas guzzling truck drivers don’t seem to approve.
When I purchased the base model Ram Classic pick-up in 2021, it cost $27K. It has the same engine and drive train as the $50K model, just not as pretty. A buddy of mine wanted to know why I did this and I told him both trucks do the same thing, but I have all that extra money in the bank. He just blinked at me and walked away, because he's an idiot.
I also needed the truck, he didn't need his, he just wanted to have what his other buddies had.
Out west where cars don't rust out from road salt, you see people still driving these 1970s trucks into job sites. A truck is a truck. Might as well get one from that era thats no taller than a sedan these days but still has a full bed and a big block thats probably going to keep on ticking another 50 years easy.
And I know people who bought those free golf carts (that's how I heard about the program in the first place - if I had a place to park the thing I would have done it myself), drove them around a little and then they broke and that was the end of that.
I'm surprised people didn't like them. they are super popular in places that tolerate them e.g. more vacation/resort style towns as the designated grocery getter once you've parked the main car for the weekend. I'd love to have one. I've seen like two of them in the grocery store lot before here in socal.
They failed too quickly to be useful. Additionally they ran on banks of cheap car batteries that were too expensive to replace because there were so many of them, and while the manufacturer could get cheap ones, as a consumer you couldn't.
They were a toy basically, and an utter waste of government money.
It is fun to think of all the things we can do and dream up but you have to put it into real dollars and economic output for any real progress to be made. Next you need to convince others that your idea is better than what they have now. Part of convincing people you are right will be to understand why people purchase what they purchase.
come on, just get a used nissan leaf. about same price as your honda fit. cheap, an actual car, lowish range, but very usable.
You can leave the AC running while you're in a store. You can charge at home on 110v. not that much to maintain. no smog, no oil changes, 125k coolant changes.
you're a well-paid engineer, buy it as an experiment and have some fun with it.
My meta-takeaway is that it behooves* the industry to further standardize on the interfaces between components. That will increase repairability over time when coupled with the correct legislation.
*Based on the current OEM/supplier relationship, network of repair shops, etc. All of the post sales businesses built up to support the initial sale.
> My meta-takeaway is that it behooves* the industry to further standardize on the interfaces between components.
This is what the government along with standards bodies and manufacturers should be doing. It shouldn't be a market decision, because the market can't optimize this outcome.
How do you do this without stifling innovation? The government will always be slow to respond and if they're the ones setting standards they would first have to know what is currently the optimal component interface for every major component on an EV.
At that point you end up with the government asking the industry to tell them what the standards should be and how to regulate it, likely they ask the industry to regulate itself then as well. Why have the government involved at all?
Despite BYD being vertically integrated, the reason why there are dozens of Chinese EV brands is the Chinese are doing what you describe: Standardized chassis, batteries, motors, etc. It's a horizontalized ecosystem like desktop PC were when everyone was starting a PC company.
https://archive.is/96yi1
I feel what this article fails to mention is how the depreciation of EVs compares to depreciation of gas cars. Apparently, based on google searches, cars depreciate 15% when driven off the lot, and then a further 15% per year after that. So it looks like EVs are depreciating quicker.
This would definitely be a good deal, as they also have lower operating costs.
I'm really curious to see how the used market shakes out when it becomes time to play hot potato with the inevitable battery array replacement. Gas cars need work to but that work is less costly and they can take a whole lot of neglect.
When it's time to replace, you'll get a larger battery for less money. You may be able to sell or reuse the old battery for stationary power storage.
Nissan Leaf (one of the oldest BEVs) launched with 24kWh batteries. Now it has 40kWh for the same price (even less if counting inflation), and 64kWh upgrade options.
Batteries tend to degrade 1%-2% per year, and there's no breaking point when you have to replace. In the Model S's (another old EV model with over a decade of data available) the cooling system tends to die sooner than the battery it cools.
BEV battery recycling is still in infancy, because EV batteries are lasting longer than expected.
The battery is the achilles' heel of EV's. An ICE engine can last 20+ years if you take care of it. An EV needs a battery replacement at the tune of $10K+ after 10 years at best. I think once they make longer lasting and/or cheaper batteries, this difference will level out.
FWIW I drive a Toyota ICE and fully expect it to last to 200K+ miles and 20 years. If I decide to trade it, it would keep a heck of a lot of its value vs a Tesla. Those things depreciate like produce.
If theres no road salting a car can last literally forever. Especially older cars that were built on solid platforms. So many old big block trucks or diesel mercs in socal still working fine after 40-50 years. I see even older cars too, some of them beat to absolute crap with hardly any paint left on the metal but still in service.
I did the math on the Toyota and based on how many miles I drive in a year (I work at home) and the expected life of the vehicle, it'll run reliably until I'm 169 years old. :)
Batteries do keep getting cheaper, and from what I've seen even at median they do better than 10 years, let alone at beat.
Though just to toss some numbers out, if you had to buy a $10k battery every 150k miles that's definitely affordable.
The thing is with the used car market is that maintenance cost is not paid by all the owners. Its paid only by who happens to be holding the hot potato when the battery is screwed, and most people with means aren't holding a car to 150k miles, that's about how many miles an ICE car has in the maybe $5kish used range. The sort of person buying a $5k car can't afford a $10k battery. They might not have access to $10k on a line of credit either. The worst similar thing that could happen for an ICE car is a timing belt going before you replace it and screwing up the engine or the automatic transmission needing replace, both issues much less costly than a $10k battery but also costly enough that people sometimes walk away entirely from the car.
I feel like the battery cost issue is being hand-waved by too many people here. For most people driving a car with well over 100k miles, spending $10k to replace a battery is a total non-starter. In addition to batteries degrading, there's also the risk of an accident. Some crashes that would be fixable for an older ICE car will require replacing the battery in an EV at a cost far greater than the car would be worth, making it non-viable. The battery is a risk factor that many people already worried about their finances won't want to take on.
> For most people driving a car with well over 100k miles, spending $10k to replace a battery is a total non-starter.
Well do the math with prices instead of miles.
If you think you need to replace the battery soon, and the EV is $8k cheaper, it's a tempting purchase. Just don't spend the $8k on something else.
If that's impossible because the battery car would have to go below free, then that could be a problem. But that's still way cheaper than EVs are right now. I wish we had that problem! And at that point in the future, the fix is cheaper batteries, and it will happen.
> Some crashes that would be fixable for an older ICE car will require replacing the battery in an EV at a cost far greater than the car would be worth, making it non-viable. The battery is a risk factor that many people already worried about their finances won't want to take on.
I don't think the difference between "4% chance it's totalled in the next few years" and "5% chance it's totalled in the next few years" is a deal breaker. And that math is affected by so many other model-specific things too...
EV batteries don't tend to suddenly die, do they? You can negotiate a lower price for a weaker battery, and you don't have to replace it the moment it hits 80% capacity.
And we're currently talking about cars that are worth significantly more than $5k. An extra 30% to fix it up is very different from an extra 200%.
A colleague of mine bought a Tesla. He was looking to trade it up for a newer model after a couple of years and it depreciated probably $30K (nearly half) if I recall correctly. He absolutely loves the car, but nobody wants to take on that type of depreciation hit.
That's something worth nothing, but most of that is unrelated to the battery, and I don't see how it has anything to do with the rest of this comment thread.
I suspect a lot of that depreciation has to do with the battery life and replacement cost. For the current used market it's pretty drastic. I'm not sure if it's just a flooded market, a fad ending, people just don't like EV's after owning them, Tesla cutting prices, or what. Perhaps some of all of that.
https://www.cnbc.com/2024/04/05/poor-resale-values-of-evs-ar...
Edit:
A recent study from iSeeCars.com showed the average price of a 1- to 5-year-old used EV in the U.S. fell 31.8% over the past 12 months, equating to a value loss of $14,418. In comparison, the average price for a comparably aged internal combustion engine vehicle fell just 3.6%.
https://spectrumnews1.com/ca/la-west/transportation/2023/11/...
The Tesla Model S topped the list of EVs that depreciated most over five years; it lost 55.5% of its value, according to the analysis. Rounding out the top five were the Chevrolet Bolt EV (-51.1%), the Nissan Leaf (-50.8%), Tesla Model X (-49.9%) and Tesla Model 3 (-42.9%).
Overall, the average vehicle lost 38.8% of its value after five years, according to the analysis. Trucks retained the most value (depreciating 34.8% over five years), followed by hybrids and SUVs, which depreciated 37.4% and 41.2% respectively.
Environmental guilt only goes so far in terms of sales. For large adoption, the depreciation problem needs to be solved. Wealthy people (1st buyer) can afford to throw money at EVs over and over again and usually keep their vehicle only 2-3 years. Middle class (2nd buyer) need a dependable car that costs less per month (cost minus sell value) and lower class people (3rd buyer) need a vehicle that will last forever. The current state of EV's only satisfies the first and maybe some of the second buyer market while an ICE satisfies all three.
EV's sure are cool though.
Well apparently the average car loses 42% of its value after three years, so if that Tesla lost an extra 10% that wouldn't be a huge difference.
5-year depreciation can be anywhere from 20 to 60 percent depending on model, and that's just looking at gas cars.
Edit: Oh you added a lot more. The wall of all EV prices falling will happen less and less as the tech matures. And even with that factor, they're still not at the bottom of car depreciation lists after 5 years.
It is not clear to me if you are deliberately mixing in a bunch of non-equivalent math.
You say that the average price of a used EV fell more than the average price of a used ICE as if that was a bad thing. But you do not tell us the corresponding statistic for prices of new vehicles. What if the average price of new EVs fell 50% but the average price of used EVs fell 31.8% while the average price of new ICEs rose 25% and the average price of used ICEs fell 3.6%?
In general I would consider lower EV prices to be a positive development. Your barage of numbers seems aimed at confusing the issue. Can you provide more clarity?
Seeing as so many of these comments are related to battery replacement costs, I wonder if this will cause Tesla to take a larger hit than most automakers in the models where the battery is part of the frame. Are these even replacable?
This is why used hybrid RAV4’s with 40K miles are selling over MSRP.
I think these stats are biases towards junky brands with high turnovers.
> Joe Biden’s climate agenda is all about new-EV sales.
The unstated bit is American new-EV sales.
> Electric vehicles made up about 8 percent of new car sales in the United States last year, compared with more than a quarter in China, where new EVs can go for about $10,000 or less.
Except, we've also made those unaffordable by
> Biden has quadrupled tariffs on electric vehicles from China — from 25% to an eye-watering 100% — in a move designed to bolster U.S. jobs and manufacturing.[1]
If it was all about new-EV sales, we could set the EV tariff to 0%. A $10k vehicle would indeed increase sales in a way that's congruent to a climate agenda that's all about new-EV sales.
The real story is that agendas are a function of politics, but we kind of already know that. The difference in outcomes ie: the differential gain in EVs being driven between these two scenarios is traded away in return for votes.
1. https://www.npr.org/2024/05/14/1251096758/biden-china-tariff...
You can find balance. You can create a tariff structure where legacy auto is only protected if they’re producing the vehicles at the desired affordable price points. If they don’t produce them at that price point, you let China and BYD steamroll them to deliver the necessary consumer excess and climate goals.
Otherwise, you’re just using regulatory capture to protect legacy auto profits and overly expensive vehicles. Protect US labor (within reason considering the value of a domestic manufacturing base and supply chain), but don’t protect the profits.
> If they don’t produce them at that price point, you let China and BYD steamroll them
The problem is that they've already proven themselves unable or unwilling to produce affordable EVs any time this decade, so allowing Chinese competition at any reasonable tariff level will almost definitely doom them. For the government, it's a "damned if you do, damned if you don't". And the automakers are clearly betting that the government will protect them no matter what, even if they're suicidal. When companies like GM or Boeing play chicken with the government, they know the government will swerve first.
My point is that the climate is the loser in this story.
Always is.
If they actually cared about climate, they would let you take that $7k EV rebate they were dangling and apply it towards ebikes, all $7k of it. Of course this would be seen as rocking the boat too much, I am sure.
Protectionism in general tends to irritate me. The kind of political nonsense exposed by the parent comment is particularly frustrating for me.
That said, my own policy would result in even more extreme trade restrictions for completely different reasons.
I think it is absurd to impose extensive regulations on some players but not all players. It makes no sense to me that I can walk or click into a store where two identical products are offered but the rules imposed on each producer are so different. One is regulated in the age of employees, the safety requirements for employees, the working conditions of employees, environmental protections, and so forth. The other is allowed to ignore all those considerations. When the US government imposes all those regulations on US players it is essentially making a rule that US companies are not allowed to compete.
I think that USians like to complain about government interference but actually support most of the restrictions they suffer. They don't want to see 10-year-olds in factories, or toxic effluent flowing into waterways. We may not all agree on all the regulations but we generally agree on most of them. Yet we are not willing to impose those restrictions across the board on all participants in US markets.
A company that plays by USA rules inside the USA cannot escape the costs imposed by those rules. So two identical products show up on the same shelf with drastically different price tags. It's no surprise that the higher-priced item does not sell. So if you want to sell your products inside the USA you are forced to move your production outside the USA and damage the labor force and ecology of some other part of the world.
There are two obvious alternatives to the existing status quo. One is to remove restrictions from producers within the USA. I do not advocate for this and don't think most USians would tolerate this. The other obvious choice is to impose USA regulations on the production of any product sold inside the USA. I do advocate for this but I don't think most USians would tolerate this either. The obvious effect on prices would be untenable for most USians. It would be political suicide to support such an action.
Yet, as the parent comment highlights, we see arbitrary trade restrictions for politically powerful industries despite the effect on prices. Clever appeals to nationalism and other hideous ideologies can sometimes produce public support for good policies for terribly wrong reasons.
In the case of EVs you have a very interesting conflict of choosing to allow irresponsible companies to do irresponsible things in order to create cheaper products that might save the environment. Or do you force companies to be environmentally responsible even if it makes environmentally safer products more expensive. (This ignores, of course, the whole debate about whether EVs are, in fact, environmentally safer. It also ignores other price factors like labor which might have a greater effect on prices than environmental protections. But it makes interesting conversation.)
If a non-USA producer can play by the same environmental protections and most of the same labor protections as the USA producers and still put a less expensive product on store shelves in the USA, I don't mind allowing their product into the USA. Of course, if that ever came to be the general case we could start worrying about the rest of those labor rules. But right now we are so far away from a level playing field that an abrupt leveling would cause too great of a shock. I wonder if USians could agree on what constitutes low-hanging fruit in any effort to level the playing field.
Well yes, USians can tolerate many things as long as they are out of sight. Our object persistence is severely underdeveloped.
> China, where new EVs can go for about $10,000 or less
This is the part that hit me. In America we have no idea how much we are overpaying for things. There are plenty of reasons, sure, but at the end of the day things are wildly expensive with little to no acknowledgment from the government.
Things can be very cheap indeed if you can use forced labor[1], don't have to consider the impact on the environment[2] and such.
[1]: https://www.hrw.org/news/2024/07/02/hrw-urges-european-commi...
[2]: https://www.scmp.com/business/article/3232456/your-made-chin...
I mean, the US already has forced labor (i.e. prison labor).
And for what it worth, China is leading the way in green energy transition. They are pushing it much faster and adopting it way better than anything the US has historically tried. Remember they only have a few decades into their own industrial revolution compared to the West's hundreds of years and they had already exceeded most if not all other countries in terms of progress.
The US doesn't even have a functional high speed rail system yet. Meanwhile, China built its own national rail network in less than 2 decades.
Almost like you can get amazing things done in a short time if you get everyone pulling in the same direction, willingly or not...
But I agree, the massive amounts of cheap solar panels and EVs has and will continue to make a significant impact. It sucks that they're built on such lousy foundations though...
The government is doing what it can to keep things expensive to insulate domestic industry from global changes. This is entirely on purpose. 266% tax on chinese steel, 25% tariff on pickup trucks, 30-50% tariffs on washing machines, 100% tariffs on electric vehicles, 50% tariffs on solar panels, etc.
This isn’t even getting into the regulatory capture which prevents foreign products from being used/sold in USA.
The government is more interested in protecting autoworker jobs in the US than lowering the cost to a broader set of consumers, unfortunately.
If we allowed Chinese autos into the country free of tariffs, prices would almost certainly decline materially in real terms over the next few years.
Many Chinese goods are great. But if it's an end run around regulation, it is not in the US's best interest. Ralph Nader already fought this fight and won back in the 1960's with the Chevrolet Corvair. The Ford Pinto had the gas tank between the rear axle and the rear bumper, creating a death trap on rear collisions.
These are a few issues of goods from China being an issue in the past:
A) Toys with lead paint being recalled.
https://www.sciencedirect.com/science/article/abs/pii/S02697...
B) Dog Food linked to China killing pets.
https://truthaboutpetfood.com/how-many-pets-have-ingredients....
Chinese EVs also don't contain most of the safety features that you'll find standard in Western cars.
Nor will a sub-$10k Chinese car compare to the build quality of even a $20k American car.
As with Temu, there's a reason Chinese EVs are super cheap.
The BYD Seagull, which is what most people are referring to when talking about $10,000 Chinese cars, has European homologation. IOW, it meets European safety specs for freeway use.
It's the $5000 Chinese cars that are missing the safety features.
Does anyone know what collision repair costs are like on non-Tesla EVs? This seemed to be Hertz's biggest problem with Teslas, and I've heard many horror stories of high costs and long waits for Tesla repairs.
As far as Teslas go, they seem to follow a similar value curve to German luxury cars -- you can get them very cheaply if they're 5-10 years old, because the parts are so expensive to keep them running, and a lot of the status wears off when they're not visibly the newest model. This I suppose is less true with Teslas where the visual style isn't that different from 9 years ago.
TL;DR: used EVs are "cheap" these days.
As in, they're finally getting into a sub-$30K range.
Meanwhile, I'm going to drive my 2010 Honda Fit (that I bought for $5K in 2017) practically forever.
I'm making 6 figures as a software engineer, as does my wife. We have no kids.
I have no idea who are these people buying new cars, or who are all these people for whom $30K is "cheap". I can pay that out of pocket, but unless held at gunpoint, I won't.
There are many ways to make EVs marketable, but the key is make them goddamn cheap FFS.
And the answer to that is infrastructure, not technology.
We could make $5K glorified golf carts street-legal, and not requiring a license. For many people, that's enough for their grocery store runs / work / school commute.
Oh, they won't fare well in a collision with F-150? Then maybe we can remove those from the streets outside specific delivery and maintenance hours, and impose a lower speed limit for heavier cars.
That's before we get to the dangerous idea that we could charge the EV's as they go if we put wires into our streets... And perhaps add electronic signaling to make self-driving an easier problem to solve.. Maybe even a guiding rail (or two) to define lanes instead of paint that the weather can strip away...
And if I may dream, this would enable us to replace tyres for traction with higer-efficiency rolling stock, and even link up cars going in the same direction on regular routes to reduce drag (and traffic).
If only! I've lost all hope.
Even thinking about it is tramatizing.
> Oh, they won't fare well in a collision with F-150? Then maybe we can remove those from the streets outside specific delivery and maintenance hours, and impose a lower speed limit for heavier cars.
A few things:
1. We should tax vehicles according to their road damage, i.e., O((weight/axles)^4*axles);
2. Vehicles with bumpers/hoods higher than Xcm should never be allowed in the left lane;
3. Vehicles with gas mileage worse than 3g/100miles shouldn't be allowed to go over 45mph.
My neighbors almost universally run small businesses; and, almost universally, slap their business sticker on their 100k$+ 250s & 350s and then take the whole cost as a "write off" for "tax purposes". If the IRS was doing their jobs, these fuckers wouldn't be on the road — they'd be paying off fines and/or in prison for fraud.
>1. We should tax vehicles according to their road damage, i.e., O((weight/axles)^4*axles);
Fair, though keep in mind that EVs and specifically their batteries are damn heavy putting them as sedans right up there with the bigger pickups and SUVs.
Taxes on EVs will also have to compensate for fuel taxes that would not apply to them.
>2. Vehicles with bumpers/hoods higher than Xcm should never be allowed in the left lane;
Here in America we deal in freedom units, not metric.
Also, Americans love their RVs and big muscle trucks (both pickups and 18 wheelers).
>3. Vehicles with gas mileage worse than 3g/100miles shouldn't be allowed to go over 45mph.
Hope you'll like your groceries and all other shopping becoming quite a bit more expensive to make up for slower transport. 18 wheelers are the life blood of the American economy.
>slap their business sticker on their 100k$+ 250s & 350s and then take the whole cost as a "write off" for "tax purposes".
What they are doing is buying the vehicle using company funds as company equipment and then writing it down as a loss on their Income/Loss sheet. There's nothing wrong with it and you should do so for any company purchases.
You might complain that the line between personal and commercial is being blurred and you would be right, but in the small business world that line is blurry for both practical and "less than justifiable but tolerated" reasons.
Obligatory disclaimer: I'm not a CPA, none of this should be understood as financial advice. Consult a proper CPA or financial advisor for financial advice.
>What they are doing is buying the vehicle using company funds as company equipment and then writing it down as a loss on their Income/Loss sheet. There's nothing wrong with it and you should do so for any company purchases.
I think the "fraud" comes from the fact that they use it for personal purposes but fail to declare it on their income tax returns as they should[1]. For the typical case of a general contractor or an electrician using their "work" pickup truck to buy groceries or even to commute, that expense is not tax-deductible and must be declared as a fringe benefit.
[1] https://www.irs.gov/publications/p15b#en_US_2024_publink1000...
I believe the argument is generally that they are advertising for the business whenever driving a company vehicle with logos on it.
As the GP said, the line is very unclear for small businesses. It isn't technically fraud, though, if our current laws allow it. Fight to change the laws if you want to, but until then it can't be fraud.
>I believe the argument is generally that they are advertising for the business whenever driving a company vehicle with logos on it.
The linked IRS document specifically says
>For example, a pickup truck qualifies if it is clearly marked with permanently affixed decals, special painting, or other advertising associated with your trade, business, or function and meets either of the following requirements.
(emphasis mine)
>2. Vehicles with bumpers/hoods higher than Xcm should never be allowed in the left lane;
Why the left lane? Isn't the right lane closer to pedestrians? Also, what if you need to do a left turn?
>3. Vehicles with gas mileage worse than 3g/100miles shouldn't be allowed to go over 45mph.
seems like a nightmare to enforce, especially for models with hybrid variants that could do 3g/100mi.
> seems like a nightmare to enforce, especially for models with hybrid variants that could do 3g/100mi.
They can get a different color on the license plate. Easiest fine in the world.
> 2. Vehicles with bumpers/hoods higher than Xcm should never be allowed in the left lane;
How does this edict apply to roads on which each direction has only one lane (accounting for about half of US traffic volume)?
Takes notes
Those ideas read like poetry.
Good grief, you're my hero! But seriously, that kind of talk could get you elected.
Elected maybe in California, but not most of the US and definitely not in Texas, Florida, etc.
In Texas and Florida big trucks are gender-affirming vehicles for cis-people. That's the nature of reality, big toys for big boys.
Cis person who drives a big truck in Washington state, don’t leave us out! To be fair it’s a cybertruck so I’m not sure how gender affirming it is. The manly gas guzzling truck drivers don’t seem to approve.
When I purchased the base model Ram Classic pick-up in 2021, it cost $27K. It has the same engine and drive train as the $50K model, just not as pretty. A buddy of mine wanted to know why I did this and I told him both trucks do the same thing, but I have all that extra money in the bank. He just blinked at me and walked away, because he's an idiot.
I also needed the truck, he didn't need his, he just wanted to have what his other buddies had.
Out west where cars don't rust out from road salt, you see people still driving these 1970s trucks into job sites. A truck is a truck. Might as well get one from that era thats no taller than a sedan these days but still has a full bed and a big block thats probably going to keep on ticking another 50 years easy.
> We could make $5K glorified golf carts street-legal
They did that: https://www.cato.org/blog/im-government-im-here-give-you-gol... (the article is kind of snarky but 100% accurate).
And I know people who bought those free golf carts (that's how I heard about the program in the first place - if I had a place to park the thing I would have done it myself), drove them around a little and then they broke and that was the end of that.
Nice waste of government money.
I'm surprised people didn't like them. they are super popular in places that tolerate them e.g. more vacation/resort style towns as the designated grocery getter once you've parked the main car for the weekend. I'd love to have one. I've seen like two of them in the grocery store lot before here in socal.
They failed too quickly to be useful. Additionally they ran on banks of cheap car batteries that were too expensive to replace because there were so many of them, and while the manufacturer could get cheap ones, as a consumer you couldn't.
They were a toy basically, and an utter waste of government money.
It is fun to think of all the things we can do and dream up but you have to put it into real dollars and economic output for any real progress to be made. Next you need to convince others that your idea is better than what they have now. Part of convincing people you are right will be to understand why people purchase what they purchase.
Except new EV TCO is cheaper than your shitbox widowmaker
come on, just get a used nissan leaf. about same price as your honda fit. cheap, an actual car, lowish range, but very usable.
You can leave the AC running while you're in a store. You can charge at home on 110v. not that much to maintain. no smog, no oil changes, 125k coolant changes.
you're a well-paid engineer, buy it as an experiment and have some fun with it.
I do feel that.
My meta-takeaway is that it behooves* the industry to further standardize on the interfaces between components. That will increase repairability over time when coupled with the correct legislation.
*Based on the current OEM/supplier relationship, network of repair shops, etc. All of the post sales businesses built up to support the initial sale.
> My meta-takeaway is that it behooves* the industry to further standardize on the interfaces between components.
This is what the government along with standards bodies and manufacturers should be doing. It shouldn't be a market decision, because the market can't optimize this outcome.
How do you do this without stifling innovation? The government will always be slow to respond and if they're the ones setting standards they would first have to know what is currently the optimal component interface for every major component on an EV.
At that point you end up with the government asking the industry to tell them what the standards should be and how to regulate it, likely they ask the industry to regulate itself then as well. Why have the government involved at all?
Despite BYD being vertically integrated, the reason why there are dozens of Chinese EV brands is the Chinese are doing what you describe: Standardized chassis, batteries, motors, etc. It's a horizontalized ecosystem like desktop PC were when everyone was starting a PC company.