Electric cars may be great for saving money on gas, but a new report from Kelley Blue Book, commissioned by USA Today, shows that EVs might not be a great value option for their first owners. The study found that compared to gas-powered vehicles, EVs tend to lose significantly more of their value in the first five years of ownership, corroborating a study conducted in the UK, which we reported on earlier this month.
The new Chevrolet Spark EV, for example, will only be worth 28-percent of its $28,305 sticker price after it's been on the road for five years, compared to its conventionally powered counterpart's 40 percent value retention. It's a similar story with the Ford Focus Electric, which starts at $35,995. The EV variant will be worth 20 percent of that, while a gas-powered Focus Titanium should be worth 36 percent of its list price.
In fact, in KBB projections, the three cars with the highest level of depreciation use an electric motor and battery packs - the Nissan Leaf, Fiat 500e and Smart Fortwo Electric Drive. "Pure electrics have been slow to catch on in the resale market," Eric Ibara, directors of KBB's residual consulting, told USA Today. Customers are "willing to buy a new one, not a used electric vehicle."
Still, the study's results might not indicate a problem with the cars themselves. As USA Today points out, most EVs come with significant amounts of incentive money up front – many come with a $7,500 tax credit courtesy of Uncle Sam, in addition to any other government incentives (federal or otherwise) – while electric cars are traditionally available on very reasonable lease terms. These factors corroborate to hurt a car's long-term value.
What do you think? Would a big drop in a car's value over the first five years keep you from getting behind the wheel? Is a significant drop in resale value worth it, if it means not having to buy gas? Let us know what you think in Comments.