Used EVs aging out on dealer lots. What happens next?

Photo above - Used BMW I-3. Make an offer. It's depreciating at $300 a month, and the dealer wants to move it fast . . ..

Okay, we know everybody hates Cybertrucks. And Ford just killed the F150 Lighting EV pickup. There are thousands of laughably bad (previous gen) Chevy Bolts and Nissan Leafs lurking on used car lots, hoping to ensnare the uniformed. Is this a buyer’s market? (see link below)

My theory - probably not time to buy yet. Dealers are starting to get desperate, but the pain is just beginning. For the mythical? $25,000 used EV (coming off a 3 year lease), it’s costing that dealer over $300 a month in depreciation as long as it remains unsold. That’s just the AVERAGE for all cars. EVs are depreciating much faster than the 15% annual rate for typical 3 year old ICE vehicles. Imagine having to come to work each day at CarMax or Auto Nation and pass several rows of Telsas, Kias, Hyundai’s etc. and do the math in your head. “Well, I lost $3,000 on these babies overnight” ($10 a day each). You can see where this might result in panic, right?

Also, the price offered for your used EV at trade in time is going to plummet. The lots are full . . . there are no more empty spaces. If you’re coming off lease, you won’t get bled, the dealer will. But whether you owned or leased, used car lots don’t want YOUR EV because the ones they already have aren’t selling.

You can’t blame Trump cancelling EV subsidies for this. In fact, the tax subsidies (beginning in the Obama era) are the reason so many EVs with sky high prices were sold originally. (repeat after me - "market distortion is caused by government intervention"). Now those tax incented vehicles are all used merchandise. Which brings me to my second point:

“How many miles you figure are left on that battery, buddy?” (Don’t worry sir, it has an 8 year warranty.) Now begins a complex mental math exercise to figure out the years remaining vs the 100,000 mile battery life warranty vs the cost of a brand-new battery pack when doomsday arrives.

There are bona fide examples of Nissan Leaf owners getting quoted a battery replacement cost equal to the original sticker price for that vehicle. Walking away from it doesn’t sound so bad. Maybe take it to Carmax? They might offer $1,000 for it.

The great battery debate is only going to get worse. Those EV cells might LOOK like AA Energizers, but they’re not. And they’re formed into weird shaped packs intended to conform to specific nooks and crannies in your car. You need replace the whole pod, which could be a nightmare if you have a limited run EV. For example, an F150 Lightning. Cybertruck. Jeep electric anything. Nissan Ariya or Leaf. VW ID4. Any Fiat, Mazda, Volvo, BMW or Audi. Low production numbers mean the dealer probably does not have your battery in stock, will take 2 weeks to order and install it. He will ask "how much is your Visa credit line?” when setting the price.

If you are thinking of buying a new EV today, these are fun questions to ask your sales professional: "Do you have a replacement battery for this in stock? What is the official manufacturer's price for a replacement battery, and what does the installation cost?" Make a YouTube video of your salespersons expression as you ask these questions.

I cannot predict when it will be a safe time to buy fully depreciated used EV. I cannot predict when an EV battery will fail. I cannot predict what the replacement battery will cost. Instead of asking AI how much we'll save on gas at the start of the ownership experience, maybe we should be asking AI much replacement batteries will cost, and if they’ll even be available. The dealerships have no idea.

I’m just sayin’ . . .

Used EVs are aging on lots and dealers may dump them dirt cheap

samueltyler2 · 80-89, M

Much of the so called loss to the manufacturers was, is, the fact that they did not attempt to amortize the cost of design, retooling, etc, over the life of the new models. Most of the costs of any new model is upfront. When have you seen a major change in design of any car or truck? If the US manufacturers were not so anxious to recover all those costs in the first few years, the costs could have been spread out and the MSRP much lower. US manufacturers decided they knew better than the drivers in other ways as well, for one they stopped making sedans and station wagons. That market went right to the manufacturers in other countries, both ICE and EV.

IronHamster · 56-60, M

@samueltyler2 Government interference causes those design changes. Those small trucks were popular, but, the auto makers switched to larger light trucks because the government tied wheel base into the fuel economy standards.

samueltyler2 · 80-89, M

@IronHamster sorry, the government did not cause the demise of sedans. I don't follow your comments about moving from small trucks to bigger ones. We don't really even have much choice about what color we want. Today, of you were to custom build a vehicle, it cost more and takes a long time to get it.