by Jack Birle,
Electric vehicles have depreciated in value more in a five-year span than other major vehicle types, but all vehicle types have been able to hold their value better than four years ago, according to a new report.
A report from iSeeCars looked at 1.1 million vehicles sold in the last year, from November 2022 to October 2023, and used historical data to understand how the vehicles’ value will depreciate over the next five years. The results of the analysis found the average depreciation rate is 38.8% for all vehicles, which is a 10.8% improvement from 2019.
The analysis also found that trucks had the best depreciation rate, at 34.8%, with hybrids being close behind at 37.4%, and SUVs finishing in third with a 41.2% depreciation rate. Electric vehicles scored the worst, with a 49.1% depreciation rate over five years, but saw an 18% improvement from 2019.
Karl Brauer, iSeeCars executive analyst, said in a statement that the difference between how much electric vehicles and hybrids depreciate over a five-year period shows consumers favor the latter car.
“The disparity between electric vehicles and hybrids is worth noting, with EVs the worst group at holding their value and hybrids among the best,” Brauer said. “Some manufacturers have reduced or even abandoned the hybrid market in favor of EVs, but these figures suggest consumers still appreciate a hybrid’s combination of higher fuel efficiency and zero range anxiety.”
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In the report, iSeeCars notes that it is limited in its ability to track the five-year depreciation of electric vehicles because of how new they are to the market, but says that concerns about battery replacement costs and other incentives have caused the cars to depreciate more than gas-powered vehicles.
“Between incentives that effectively lower an EV’s price before it’s even purchased and concerns about battery replacement costs, used electric vehicles have always suffered higher depreciation than equivalent gasoline cars,” Brauer said. “This pattern will continue until electric vehicles don’t require heavy incentives to sell, and consumers gain confidence in their long-term ownership costs.”
