Electric vehicles are losing value at an “unsustainable” rate as a slowdown in consumer demand causes used car prices to halve in two years, leasing companies have warned. The Telegraph has the story.
The British Vehicle Rental & Leasing Association (BVRLA) warned that so-called fleet operators, such as car leasing firms and rental companies, are having to swallow large losses when reselling EVs because of “accelerated, exceptional depreciation”.
In most cases, these companies buy new cars and own them for three years before selling them.
Consumers who lease cars during these three-year periods effectively cover the value of losses through monthly payments, which are calculated based on estimates of how much a vehicle is expected to depreciate.
But in the past two years, the typical amount of “residual value” left over at the end of a car’s lease has plunged from 60% to 35%, the BVRLA said.
This means a car worth £50,000 when new will now drop to £17,500 in value over three years, instead of £30,000.
This leaves leasing companies facing unexpected losses.
Gerry Keaney, Chief Executive of the BVRLA, has warned the trend is “not sustainable”.
Speaking at an event in Parliament on Tuesday, he said: “The reality is that EV residual values in the last two years have dropped by 50%.
“That is the evidence of the accelerated depreciation write-off that we’ve seen. And again, when we look forward two years, the rate of used EVs coming back to the market is about to double.”
Worth reading in full.
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The costs will be passed on to the consumer and/or taxpayer, as with all socialist idiocy
Doesn’t really matter though if you only buy second hand. Some mug pays the premium.
I think what will happen is that prices of ICE cars will go up – secondhand and new
Unexpected? Boo hoo! That’s the nature of the business they’re in, predicting prices and providing a cost smoothing service. Rather like energy companies keeping the consumers’ regular payments stable while consumption rises and falls with the seasons. I get it that the losses are unsustainable – the businesses must make a profit – they took a punt in a new market and have come slightly unstuck. Oh dear, how sad, never mind.
The obvious solution is to raise the costs of leasing an EV so that the consumer ‘enjoying’ the first few years of the machine’s life pays the appropriate depreciation. Obviously, revealing the true cost of driving an EV is not what our governments want – so they’ll hand over more of our tax money to keep the leasing companies on side. Essentially the leasing companies are blackmailing the government – give us more money or we’ll reveal the true costs of EVs.
Jeremy Clarkson is reported as saying;
”“There are lots of reasons why we’re jacking this show in but for me, one of the main ones is I’m simply not interested in electric cars. “They are just white goods, they’re washing machines, they’re microwave ovens. You can’t review those, you can’t enjoy them”
Whilst not noted for his balanced nuanced statements! nonetheless he has a point, it does seem increasingly likely that EVs will have a shorter life span than ICE cars. They are complex bits of IT kit with large batteries that are a high health and safety risk for workshops. They are coming on the roads on lease deals, fair enough, the lease company takes the risk, if you were to buy one secondhand all that risk comes to you. Battery failures IT software failures, high insurance costs, why would a private individual take on those sort of risks costs and liabilities?
As the secondhand price falls so does the likelihood that in the event of an accident or major problem the EV will be written off and so Jeremy Clarkson is right, EVs are ‘white goods’ but they are very big white goods with a huge problem when it comes to scrapping and re-cycling them.
If the UK goes EV or nothing then for well over 50% of the current motoring hoi-polloi it will be the end of the road and over to bikes and buses.
If the UK goes EV or nothing then for well over 50% of the current motoring hoi-polloi it will be the end of the road and over to bikes and buses.
Of course, this is precisely the objective of the Net Zero cult.
If we end up with bikes and buses society will collapse. Our public transport could not cope even if capacity was doubled and bikes are a non-starter for probably 50% of the population owing to the landscape.
How do people get to work?
15min cities. You don’t get to work if it’s further away than that.
Universal Basic Income. Pay the sick, lame and lazy to sit at home munching on their Uber Eats while robots do most of the grunt work
I don’t know about most of the commenters here but I’ve only once bought a new car. It was lovely having something unused by someone else. I kept it for about 8 years before part exchanging it for a bigger 8 year old car.
If in 2030 or 2035 the only choice of new car is EV and the depreciation is as fierce as at present then I expect that far fewer new cars will be sold and that this will hammer VAT receipts – and corporation taxes from motor manufacturers.
The existing stock of ICE vehicles will become more highly prized and I’d expect a business niche to develop in making older cars ‘new’ again. That will help recoup some VAT but I’ll bet not as much as properly new cars.
If there’s a collapse of properly new car purchases there will be a rapid increase in quality used car prices – in fact I think it’s already started.
At the lower end of the market we should expect a change of attitude as to what constitutes ‘beyond economic repair’.
Expect the cost of an MOT to rise.
Yes. And the regulations to tighten.
And corruption to increase.
The closure of Grangemouth and the end of North Sea oil and gas must also be considered.
OK, ICE cars will run until confiscated, but where will you get petrol and diesel from and how much will it cost?
They are planning to get rid of as many plebs as possible.
Which is exactly what they want
Expect to see a big increase in the price of petrol and diesel in the budget to try and make EVs look more attractive. Lammmy was banging on about climate change this morning, “It’s the biggest threat to humanity”. According to him climate change will put millions of refugees on the move and we will not be able to stop them coming here. In other words buy your EV and stop complaining. Lammy is too stupid to realise that he and his comrades are the biggest threat to humanity.
I made this exact same point to my barber, that the biggest threat to humanity is gutless, cowardly, immoral corrupt politicians (in other words, nearly all of them). The second biggest threat is those who control the politicians.
The third biggest threat is a particular religion. That religion wouldn’t be a threat if it wasn’t for the first two biggest threats.
I didn’t mention the third threat because I know he has a prayer mat in the other room, and I like him to use the razor blade at the end of the cut.
This continual fear-mongering, pushing and threatening people to buy a product they do not want nor can afford merely confirms the Conspiracy Fact.
In some ways we should be grateful, as increasingly more of the Programmed Population are feeling the pain direct in their pockets and lifestyles.
And that is the thing which will make more and more people wake up, I hope. When the things that make life liveable and enjoyable are removed, which in turn feed the economies of the world and form the very basis of everything we take for granted in our civilisations, surely then, there will be kickback?
I agree with the notion that our debt-based economy is not infinitely sustainable – the amount of debt will at some stage exceed the value of all of the work and resources in every economy – but debt is artificial, a mathematical noose that is ever tightening.
Is this what the “Great Reset” is designed to deal with? Cancel all debt and move everyone onto a Communist-style model of Big State providing everything and controlling every aspect of life? Some say yes, but under such a system, where is the motivation to do anything?
Even if the “Great Reset” proceeds, in and of itself the resulting model is just as unsustainable as the debt model. Aspiration drives ingenuity and invention and the desire to “do stuff”. After all, we work and save and pay so that we can enjoy life and have good times. If that carrot is taken away, then all motivation ends. Ultimately there will come some collapse, some folding in or reforming of our current society and civilisation, and it’s hard to know what that will look like at present. Mad Max or Avatar?
The Awakening need to happen soon before it all arrives; the Black Mirror series, especially episode 2 “Fifteen Million Merits” always springs to mind when seeing the words [Great Reset].
I was in a car dealers one day buying a car, Stoneacre, don’t go anywhere near them. A guy was in the process of buying a car and he had a 4×4 to part exchange. He was offered about a third of what he had paid 2 years before. The market on 4×4’s had disappeared.
The difference with electric cars is that Government never gave manufacturers the chance to build a market in the first place. In stead of fining manufacturers you have to enable them to establish the market over years. The MilliNutters of the world simply do not understand how business works and they are going to put millions out of work.
I am very confident in predicting the end of mass car manufacture in Europe within 20 years.
The MilliNutters of the world simply do not understand how ANYTHING works.
They don’t know how batteries or windmills work, or pensions, or what motivates people.
Or perhaps it’s that we don’t understand that they do understand, but they have an agenda that we don’t know about.
A used car dealer had a good chat a few days ago about this. https://www.youtube.com/watch?v=4MirkRKD1RQ
Very good vid, thanks, most enlightening. 25k views in 4 days, not bad. Geoff is a diamond, as is his BMW 2.0D 2008 against that Porch Tincan!
Right now if I was a car manufacturer in the UK I’d just ignore this net zero nonsense and carry on making and selling ICE cars as I wished.
Refuse to pay any fines and threaten to shut down the entire operation if pressed.
The small, privately owned garages that service cars must be on the edge of their chairs wondering what will happen next.
If Mossad can blow up a pager imagine what a government can turn your EV into…
The word is transform
I’ve seen the documentary.
China, of course, would never do anything like that to our cars.
Actually I really don’t think they would until/unless relations had deteriorated to an actual shooting war, at which point it would be too late to consider our supply chains.
Here’s what happens when we stop eating meat and cycle to work.