Electric car depreciation – will electric vehicles lose their value?

All vehicles lose value over time, so depreciation affects any car, electric or not. How much electric cars lose depends on many factors, however

When any brand-new car is driven away from the supplying dealer, it immediately loses some degree of value – that's just how things work in the car market, and it's called depreciation.

But exactly how much a given vehicle depreciates by is determined by many variables, such as how desirable and popular a given model or manufacturer might be, how old the car is, what mileage it clocks up, how well it's looked after and how dependable it is (or is perceived to be)

As a rough rule of thumb, cars tend to be worth around 40% of their new purchase price after 36,000 miles or 36 months (three years) on the road. But the number for a specific car can be as low as 30% or as high as 50%: in other words, some cars are more prone to depreciation than others.

When electric cars first appeared on the market, in the shape of models like the Citroen C-Zero and Peugeot iOn, or 'quadricycles' like the Indian-made G-Wiz, owners experienced big drops in residual values when the time came to sell or trade in. This was because relatively few people were interested in buying (or even knew about) electric cars, new or used, due to the limited range and longer charging times of these early electric cars.

However, recent years have seen both electric and hybrid cars start to retain their value better. This is down to more and more makes and models entering the market, as well as better understanding among buyers of the benefits of hybrid and electric cars. There are still variations in how individual makes and models hold on to their value, however; we've put together guides to the fastest and slowest-depreciating electric and hybrid cars you can buy to illustrate this.

In October 2018, car-valuation specialist cap hpi provided DrivingElectric data to show how different electric and hybrid vehicles depreciated over time. Chris Plumb, Black Book editor at cap hpi, told us at the time: “Demand for used electric and hybrid vehicles continues to grow as consumers purchase them for either the TCO [Total Cost of Ownership] savings, green credentials or just enjoy the unique driving dynamics these cars offer.

“As demand has grown, this has resulted in resale values stabilising or even in some cases increasing as more and more people accept the technology. As more ultra-low-emission zones are rolled out around the country and fuel prices remain high, zero and low-emission vehicles will surely enter more and more people’s consideration lists.”