The subsidy pot for second-hand electric cars may be empty, but the demand for used EVs is disappointing, also worldwide. As a result, sales of new electric cars are also slowing down. But this may be good news for the private lease customer.
According to an analysis of Bloomberg the transition to electric cars is once again encountering obstacles. One is that consumers are not eager to buy second-hand EVs. This doesn't just affect the second-hand market, where prices for battery-powered cars are falling faster than petrol cars. It also undermines the market for new EVs.
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How is the market for new EVs being undermined? Due to the uncertainty about the residual value. If second-hand EVs drop in value so quickly, the math for a new one suddenly doesn't look interesting at all.
The residual value issue is separate from the known reasons why consumers are reluctant, such as the still high new prices and disappointing or declining purchase subsidies. The fact that manufacturers are making promises about new battery technologies, cheaper cars with a greater range and faster charging options also plays a role. Moreover, limited charging infrastructure still plays a role in many countries.
But the industry must also take action. So have Tesla and Chinese manufacturers like MG in BYD has unleashed a price war that undermines the prices and residual values of both new and used electric cars. As a result, car manufacturers' profits can be as high as Volkswagen and Stellantis (among others Opel, Peugeot, Citroën, Fiat in Jeep) come under pressure.
An additional problem is that the majority of electric cars in Europe are leased. In many cases, the depreciation component in the lease rates will not prove to be cost-effective. This will be a financial problem for manufacturers, dealers and leasing companies alike.
This is expected to become even worse in the coming years. After all, many of the 1.2 million EVs sold in Europe in 2021 will end up on the second-hand market after their lease contract expires.
This of course has an impact on the profitability of companies, but also on consumer confidence. And all this could have consequences for the ambitions to limit CO2 emissions from road traffic and to phase out cars with combustion engines.
“The problems surrounding used EVs have the potential to destroy billions of euros in revenue for the industry,” warns Christian Dahlheim, head of VW's financial services.
According to Bloomberg, the automotive industry faces an enormous challenge in dealing with large numbers of used EVs. In addition to all the above developments, consumer distrust about the condition of the battery also plays a role.
Most manufacturers have an eight-year warranty period, but what happens after that? If the battery pack breaks down, a second-hand EV will lose at least 30 percent of its total value in one fell swoop.
In addition to causing much misery for the industry, the uncertainty surrounding battery technology could also benefit future EV drivers. It could convince more consumers to lease instead of buying.
Mark Schreurs, founder of the Dutch leasing company Mistergreen, recently confirmed to the ANWB that private lease prices for second-hand EVs could soon drop enormously. He mentioned an amount of 300 to 350 euros per month for a Tesla Model 3. And you don't have to worry about repair costs or poor residual value. For a private lease of a new Model 3 you can easily spend double that amount.
The Tesla Model 3 is available in combination with private lease from €589.00 per month with a term of 72 months and 5,000 km per year. look at all the Tesla Model 3 private lease Prices.
This post was last modified on December 22, 2023 12:24 pm
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