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NINETY EIGHT REGENCY

EVs 'worthless within 5 years'

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EVs 'worthless within 5 years'

Monday, June 21, 2010

The car valuation experts at Glass’s Guide have warned that, unless manufacturers take action soon, electric cars will suffer horrendous depreciation on the used market.

“If cars and batteries are sold rather than leased, and no special warranty cover is in place, the typical EV will retain only 10 per cent of its value after five years,” warns Andy Carroll, managing director of Glass’s.

This, says Carroll, is a function of the recognition that a typical EV battery will have a useful life of eight years and cost £8000 to replace.

By Glass’s reckoning, Nissan’s Leaf — available next year at around £23,350 — will be worth less than £3000 at five years old. That would make its purchase hard to justify next to a conventional car, which would be worth at least 25 per cent of its value at the same age.

As well as a purchase option, Nissan will offer a lease option to UK buyers which could avoid the depreciation issue, but it has yet to announce details.

However, take batteries out of the ownership equation, for example as Renault suggests via a £100-a-month lease scheme, and the costs could be offset against savings in petrol or diesel.

That way, Glass’s say, EVs could become the best-performing cars on the road in terms of residual value.

link:

http://www.autocar.co.uk/News/NewsArticle.aspx?AR=250525

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If low cost batteries are ever available...hmmm...

Pretty much what I thought, though I would think that as batteries are more available and affordable, used EV prices would be stronger.

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Pretty much what I thought, though I would think that as batteries are more available and affordable, used EV prices would be stronger.

I feel that the assumption that batteries will get affordable is not realistic based upon current technology and economics. The lead acid battery has been in high demand for over a century... yet, its still expensive. Lead is relatively expensive and coping with the pollution created in the production of lead acid batteries is expensive. While it appears batteries are keeping pace with inflation, in reality, lead acid batteries have gotten smaller (for smaller engines with more efficient geared starters). If you need a large, quality battery, prepare to spend some money.

Other technologies seem to be in the same place... most modern NiMH or Li Ion batteries are made out of expensive materials and are hard to scale up... part of why the Tesla needs, what, several thousand individual batteries in each pack. The only "good" news on this front is the recent discovery that Afghanistan has lots of Lithium. Yeah, so 20 years from now we'll talk about foreign dependence on Lithium rather than oil?

Unfortunately, I foresee the same problem with EVs that I had with golf carts 20 years ago... they're useless once the battery pack dies.

If these car companies want to avoid this trap, I would say they need to work together and make some sort of universal format battery pack or packs. Kinda like how we have AAA, AA, C and D size batteries for radios and flashlights. They publish the specs so any old company can start making them. _That_ kind of competition will drive the prices, even if the raw materials stay relatively expensive.

Of course, one side effect that the EV sphere probably hasn't taken into consideration... battery packs are going to be one of the next HOT technologies... in the criminal world, battery packs are going to replace radios and air bags as the top item to steal... IMHO, at least.

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I thought Renault/Nissan were working w/ A Better Place on plans for hot swappable batteries and battery changing stations...not sure what their NA plans are, though.

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I thought Renault/Nissan were working w/ A Better Place on plans for hot swappable batteries and battery changing stations...not sure what their NA plans are, though.

This too would help used prices on EVs, really anything that alleviates the likely investment by an owner of a 5+ yr old car.

SAmadei - I agree that batteries aren't likely to get cheap, but I think they could potentially come down some in price, like a $6k battery coming down to $3-5k. Nowhere near cheap, but a little better.

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This too would help used prices on EVs, really anything that alleviates the likely investment by an owner of a 5+ yr old car.

SAmadei - I agree that batteries aren't likely to get cheap, but I think they could potentially come down some in price, like a $6k battery coming down to $3-5k. Nowhere near cheap, but a little better.

I wasn't assuming they would be "cheap" cheap... but even a 50% reduction is unlikely, in my opinion. I think even a 10% reduction would be the max in a 5 year period. I'm concerned that they may be more expensive when you need a replacement... Part of the trouble here is getting an aftermarket going. Its an expensive part, that may have serious technology licensing issues... and the OEMs are in a tough spot between preserving your resale value and selling you another EV every 5 years. I feel they will, in the end, prefer to sell you a new EV.

Even so, a 5 year old economy car needing a $3K engine would likely go to the junkyard today, unless its in pretty good condition.

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A leasing model probably works better for EVs, at least for now...that way the automaker can take them back and recycle them after a period of time.

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A leasing model probably works better for EVs, at least for now...that way the automaker can take them back and recycle them after a period of time.

But buyers will throw a fit if they aren't allowed to buy their EVs outright (see EV1)

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if, if, IF....

If my aunt had balls she'd be my uncle.

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