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These EVs keep the most value over time.
Image source: Getty Images
Electric vehicles (EVs) are becoming increasingly popular, and with good reason. They produce fewer emissions than gasoline-powered cars, require less maintenance, are more energy efficient, and can save you a lot of money over the long term. But which electric vehicle should you buy? One of the best ways to get the most out of your EV is by choosing one that will retain its value over time — in other words, one that won’t depreciate too quickly. Let’s take a look at some of the best EVs on the market today when it comes to depreciation.
What is depreciation?
Car depreciation is the decrease in value that a vehicle experiences over time. It can occur for several reasons, including wear and tear, market factors, technological advances, and increased availability of newer or similar models as time goes on. It’s important to consider the risk of car depreciation when purchasing a new or used car. The lower the depreciation, the more a car holds its value for resell or trade-in purposes.
Do EVs depreciate more than gas-powered cars?
While EVs can save you a lot of money in the long run, they typically depreciate faster than gas-powered cars. This is primarily because of the electric battery, which is the most expensive component of an EV and has a limited lifespan. In addition, the current $7,500 tax credit for new EVs significantly impacts the value of used EVs. Other factors are range anxiety, lack of public charging infrastructure, higher insurance costs, and the rapid improvement of EV technology, which depreciates the value of older models.
According to a recent study, the average five-year-old car lost only 33.3% of its value from MSRP in 2022. This is a 17% decrease in depreciation from the year before, as the price of new and used cars hit all-time highs last year. The average three-year depreciation for all vehicles was 39.1%, SUVs were at 39.7%, and pick-up trucks were at 34.3%. EVs, on the other hand, lost 52% of their value over three years, which is nearly 1.4 times greater than the average for all vehicles.
Electric vehicles: three-year depreciation
The only EVs that buck the trend and don’t depreciate as fast are the Tesla Model 3, Model X, and Tesla Model S. Here is a list of EVs ranked according to their three-year depreciation.
Tesla Model 3, Model X, and Model S
The Tesla Model 3 is one of the best electric vehicles on the market today and still in high demand since it started production in 2017. Not only does it have an impressive range of 310 miles per charge and a sleek design, but it also holds its value extremely well over time. It also has an impressive array of features such as Autopilot, a 15-inch touchscreen display, and going from 0 to 60 mph in as little as 3.1 seconds. At only 10.2%, it depreciates five times less than the segment average. The Tesla Model X and Model S also beat out average for both the EV segment and for all cars.
Teslas defy the high depreciation of the EV segment due to their over-the-air software updates that help keep even the older versions current. As a result, consumers are willing to pay more for the Model S and Model X than other used luxury vehicles.
Chevrolet Bolt EV
The Chevrolet Bolt EV is ideal for those who want an affordable electric vehicle without sacrificing performance or range capabilities. This car offers up to 259 miles of range on a single charge and can go from 0 to 60 mph in just 6.5 seconds. It also comes with plenty of features like cruise control, Apple CarPlay/Android Auto compatibility, and forward collision alert. The Bolt EV starts at $26,500 before any incentives or tax credits are applied.
While EVs tend to depreciate faster than gas-powered vehicles, Teslas buck the trend, with the Model 3 depreciating five times less than the average car. This makes the Tesla Model 3 an excellent choice for eco-conscious drivers looking to maximize their value. No matter what your budget is or how much range you need in your EV, Tesla offers an option that suits your needs perfectly and holds its value over time.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has positions in and recommends Apple and Tesla. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
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