Dont buy an EV until 2026, new report suggests  theyre about to get much
cheaper

Date:
Thu, 14 Nov 2024 16:54:43 +0000

Description:
With 279,300 EVs set to come off lease in the US by 2026, it's set to be a
buyer's market for affordable, used electric vehicles.

FULL STORY

According to a recent study from J.D Power, which forms part of the 2024
E-Vision Intelligence Report , there will be a 230% spike in returning lease
volumes of electric vehicles in 2026, potentially opening the floodgates to a
swathe of cheap, second hand EVs. 

It goes on to state that nearly 280,000 EV leases will end in the next two
years in the United States, but thanks to the falling prices of recently
introduced EV models (or those about to be launched) it means that for many,
it will make more financial sense to simply lease a new car rather than 
buying out their current lease vehicle. 

According to J.D Power, it would cost the average returning lessee in the
electric compact SUV segment $477 per month to buy out the lease, while the
average lease payment on a new EV in the same category would be just $457 per
month. 

This is based on the fact that the average buyout price for most electric
compact SUVs is higher than the $25,000 threshold that would qualify for the
used EV tax credit. 

Although this is potentially good news for those in the market to make the
switch to an electric vehicle, seeing as there will be plenty of affordable
used stock in two years, it also presents numerous complications for the used
car market as a whole. 

J.D Power says that uncertainty about whether the federal EV tax incentive
will continue and how long high manufacturer incentives will last, concern
about long-term battery health, and a shortage of used gas-powered vehicles
will complicate the traditional balance of supply and demand.

So far, electric vehicle sales have been skewed towards the premium end,
targeting early adopters with deep pockets. For years, they have been seen as
overpriced and out of reach for many mainstream buyers. 

Although that is now changing, with a slew of more affordable models hitting
both the US and Europe, it is already presenting a problem for the used car
market. 

Put simply, depreciation of some premium EVs has been huge, with models like
the $130,000  /120,000 Porsche Taycan dropping to as little as $35,000 or
around 40,000 for three-year-old examples in some markets. 

An investigation by Wired earlier this year found that some premium EVs,
including the Mercedes-Benz EQE, Audi e-tron GT and Polestar 2, could lose up
to half of their value in the first year of ownership. 

The reasons for this worrying trend are numerous, from the lingering
range-anxiety among buyers to the fact that battery technology is moving at
such a rate that older models are being updated or replaced at a much faster
pace than their internal combustion engine counterparts. 

Rather than a mild mid-life facelift, as was the way with older ICE cars,
today's electric vehicles are having battery packs replaced and improved,
offering much greater range and improved performance. 

Its potentially putting off private buyers of new electric vehicles, worried
that their latest ride will be worth a fraction of the cost that they paid 
for it in a couple of years. 

The world of used EVs is going to create a buyers market in the coming years,
which is great news for those holding off and waiting to make the switch, but
not particularly positive for those struggling automakers, such as Ford and
Volkswagen, that so desperately need to sell new cars to stay afloat.


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Link to news story:
https://www.techradar.com/vehicle-tech/hybrid-electric-vehicles/dont-buy-an-ev
-until-2026-new-report-suggests-theyre-about-to-get-much-cheaper

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