Improved battery technology is lowering costs, leaving existing owners with overly expensive models no one will want secondhand.
Would you still buy an electric car if you knew you wouldn’t be able to resell it in the future? That’s the latest hurdle potential buyers are contending with, and it’s bound to become a big driver of demand.
The expenses of owning an electric vehicle have always stood in the way of mass adoption, even in China, which hasan extensive subsidy program. Starting from the cost of the battery to how far a charge will take drivers, not to mention the shortage of points where they can plug in, there’s a lot to grapple with before green cars can overtake those powered by internal combustion engines.
Much of theanxiety stems from batteries– the price, technology, density, and where to charge them. Manufacturers have worked for years to bring down the price on a per kilowatt-hour basis.
So the good news is, battery prices are dropping, down to 1.1 yuan ($0.13) per watt-hour in 2019 from 2.1 yuan per watt-hour in 2016. That also means that the cost of electric vehicles is coming down since batteries typically account for 50% to 60% of their value.
As the technology evolves and drives prices of new vehicles lower, existing owners are taking a disproportionate beating in the secondhand market. The average resale value of electric vehicles and plug-in hybrids is less than 40% of the original purchase price, versus 50% to 70% on conventional cars.