Electric vehicles are on their way to becoming the preferred option as opposed to gas-fueled ones, partly because they are better for the environment, but also because they would be cheaper to run. However, new factors are coming to light that could dissuade buyers from going for EVs.
Low Resale for EVs
It won't cost you much when you want to get rid of your old combustion engine car and buy a new one since selling it would still get you a significant amount. Only a small fraction of the original price will be deducted, depending on how long you've had or the damages it might have.
The same cannot be said for EVs, unfortunately. Compared to the 3.6% drop in the price of used gas-fueled cars in the last 12 months, electric vehicles saw a 31.8% drop in value once the owner used the car for about one to five years, as per CNBC.
This could discourage prospective buyers as they think about selling the car for a newer model, which in turn could reduce the demand for EVs, according to iSeeCars Executive Analyst Karl Brauer. Naturally, buyers will be urged to opt for a car that would retain more of its value.
Brauer mentioned that the value a new car loses in the first few years "is the single most expensive aspect of owning a new vehicle," and that as more buyers of new cars become aware of the drop in the value of EVs, they will be less interested in buying one.
A lot of people are already well aware of this situation. Smart Investor co-founder David Kuo said that EVs not retaining their value kept him from investing in the industry. He added that the software and computing capabilities of EVs also become outdated faster.
It's not only the resale value that could push people back to combustion engines. With the current state of the market right now, EV costs are now lower than before. With it closer to the price of used electric cars, buyers will prefer to buy new ones instead.
Why Electric Cars Are Still Worth It
The resale value of a vehicle is just one factor, and it might not be as important if you intend to use the car for a very long time. As for updates, its software being outdated is not that much of an issue given that the manufacturer issues updates even for older models.
EVs can be cheaper in the long run as well. Resale is just a possibility, but energy and fuel are constantly needed. With combustion engine cars, you'll find yourself paying more for fuel than you will with the electricity it takes to charge an electric car.
It might be years ahead from now, but companies are slowly adopting the more sustainable option for vehicles. Companies like Volvo, Bentley, Cadillac, and other carmakers are already planning to phase out combustion engine models by 2030, and other companies will likely follow suit.
