Electric car residual values ​​The price problem for used electric vehicles

Electric car residual values ​​The price problem for used electric vehicles

Electric car residual values ​​The price problem for used electric vehicles

Federal Minister of Economics Peter Altmaier was pleased. He said he wanted the hundreds of thousands of employees in the auto industry to still have good jobs in ten or 15 years. “The innovation bonus makes an important contribution to this.” Said, extended and increased: The bonus for the purchase of electric cars and plug-in hybrids is now available until the end of 2025 at the latest. With a net list price of up to 40,000 euros, the Environmental bonus for purely electric vehicles increased by 50 percent to 6,000 euros and for plug-in hybrids to 4,500 euros. Including all bonuses, a good 9,000 euros can come together. However, more expensive vehicles are less subsidized. The government and industry share the premium.

So far, the bonus has had a tremendous effect on the sale of new cars: Depending on the manufacturer, customers wait for their Stromer until well into next year.

Unwanted side effect

However, there is an unwanted side effect: prices for used electric vehicles and hybrids are falling. Because used cars always have to cost significantly less than new ones in order for someone to buy them in the first place. And because the price for new cars goes down as a result of the premium, that for cars that have already been driven must inevitably also fall. And so the residual value of used cars once calculated by lessors suddenly turns out to be too high because of the discounts on new cars. “It is a problem for retailers to trade in used electric vehicles,” confirms the Federal Association for eMobility. This is due to the “high level of funding for new vehicles,” said a spokesman.

The problem is not trivial: “Typically, the market for used vehicles is significantly larger than that for new ones,” says Martin Weiss, Head of Vehicle Valuation at Deutsche Automobil Treuhand (DAT). So the price for used cars is relevant. In addition, it is estimated that more than two thirds of the e-cars were leased. Around two thirds of the new vehicles in the Stromer i3 are leased out. The leasing returns of the i3, which are leased through the BMW Bank, “will be on the balance sheet of the BMW Bank (as part of our sales organization) when the contract expires,” says Munich. On the other hand, the returns would be marketed by the trade organization – as part of the normal used car business. Car manufacturers, their banks as well as dealers and leasing companies have a particular problem. Years ago, when cars were leased, they calculated higher prices than they can get now on the used car market.

This electric car bargain brings 2021
Despite Corona, 2020 was a boom year for electric cars in Germany.  Together with the plug-in hybrids, their market share climbed to well over ten percent.  In addition to a growing selection of models, financial incentives, especially the generous environmental bonus, fueled the boom.  It should pick up speed this year, because several battery-electric models are coming onto the market at low prices.  Together with the environmental bonus, which can still be called up, entry into e-mobility is possible at even a four-digit price level.  Source: dpa
The new Fiat 500 allows a charming and affordable entry into e-mobility Source: Fiat
The new Renault Twingo Electric will be available in a basic version, which minus the environmental bonus should cost around 11,000 euros Source: Renault
With the Dacia Spring, the entry-level price for e-mobility will drop to a four-digit level. Source: Dacia
It is still uncertain in what equipment and at what price the Spring will be sold in Germany.  Source: Dacia
  Prices for the restart of E.Go Life are not yet available Source: Spotpress
Maserati MC20 Quelle: Maserati

Used car technology quickly becomes obsolete

In addition, the technical progress of a technology has never been so great and so fast as with electric cars – in the past few years there have been a constant stream of cars that could go further on one battery charge than the Stromer sold in the previous year. But the technology in used cars becomes obsolete just as quickly as the range increases. They are becoming less attractive – and therefore have to become cheaper.

3,000 euros additional loss on an annual car

DAT expert Weiss says that the increase in the premiums would have ensured that the residual value level for young used vehicles was reduced “in one fell swoop”. He estimates the loss in value caused by the now extended funding for a pure Stromer up to a year old at up to 3,000 euros, for three-year-olds it could still be 1,500 euros or more. Weiss includes vehicles with a list price of up to 40,000 euros. “The older the vehicle gets, the less this effect is,” he says. For young plug-in hybrids, he sees a loss of up to 2250 euros. “This can get even worse, since every year more cars come from the leasing to the remarketing,” says Weiss.

In recent years, the industry has sold more e-cars every year – accordingly, more cars come back from leasing every year. “The problem of falling residual values ​​has existed since the introduction of the premium. Extending it turns a temporary state into a kind of permanent state,” states Weiss.

shares losses with bank and traders

confirmed losses. For 2020, a special program has been developed “with a view to cases in which the residual values ​​of the leasing returns are too high,” said a spokesman. It looks like this: The car manufacturer is sharing the loss with the Renault Bank and the dealer, “in order to enable the used car to be marketed competitively”. Each of these parties bears a third of the loss. In 2020, around 1000 vehicles will be affected, the spokesman said when asked. He did not want to comment on the amount of the losses.