Now is the time you might want to turn environmentally conscious shoppers on your lot looking for a deal toward the pre-owned electric vehicles in stock.
Why? Take a look at the residuals.
According to Manheim, the used 2013 Nissan Leaf will be worth only $7,650 by next July, while today’s price for the same unit sits at an average retail value of $14,900.
This statistic was highlighted in a recent blog post from Yahoo Autos, and author Steven Lang points out EVs are experiencing a “colossal loss of market value.”
And the Nissan Leaf isn’t alone.
In a recent report posted to its website, Cars.com found that the Smart ForTwo had the largest retail price decline (5.2 percent) from May 1 to May 31. And the Nissan LEAF wasn’t far behind at 5.1 percent.
And in a recent Blue Book Market Report, KBB analyzed the changes in Kelley Blue Book Auction Values of 2012- to 2014-model-year vehicles.The segment with the largest decline between May 1 and May 29 was the electric vehicle class, down 3.6 percent. In April, their values fell 8.5 percent.
And according to the Yahoo Autos blog report, these declines are expected to stop anytime soon.
When EVs first hit the market, federal tax credits and significant manufacturer incentives made these models an enticing buy for many fuel-conscious auto shoppers. But as Lang pointed out, “there are no similar incentives for buying used EVs,” and demand hasn’t lived up to hype, putting extreme downward pressure on used prices for some of these models. And with oil prices still far below average, fuel economy isn’t currently much of an incentive either.
And the luxury models aren’t immune to the surprising depreciation. According to the blog post, the 2013 Tesla Model S Performance is currently going for $74,000 and is forecasted to lose 28.9 percent of its value by July 2016, ending with a pricetag of $52,600.
And lesser known models such at the 2012 Misubishi i-MiEV are being hit even harder. According to Yahoo Autos, this model currently sells for an average of $7,950; by July 16 this number is forecasted to drop by 44.7 percent to $4,400.
One interesting point to note is residuals for hybrid vehicles and other alternative fuel options are not suffering in quite the same manner.
“Hybrid plug-in electric vehicles – those that offer gasoline and electric engines – are not expected to experience near the level of depreciation of their all-electric competition,” Lang wrote.
That said, EV prices are low, and are expected to get lower — proving a good buy for those customers looking for a long-term vehicle with no plans to trade-in — considering, if residuals continue down the same trajectory, many of these EVs might be looking at a 50-percent or more decline in value over the next couple of years.