Even if leasing isn’t for you, or you don’t have the stellar credit required to get some of those deals, prices are plummeting on used electric vehicles—and that makes it a buyers’ market, especially for some of the more popular EVs like the Nissan Leaf. Think electric-car ownership is priced out of your league? It’s simply not.
It’s a bit hard to believe that the Nissan Leaf has been on the market for four and a half years, while the Mitsubishi i-MiEV has been available in the U.S. for three and a half. And it’s just short of three years since the first delivery of a Tesla Model S.
Back in 2012 and 2013, special low (subsidized) lease prices were offered for the Leaf, the i-MiEV, and other early EVs like the Ford Focus Electric. Leaf prices back then rapidly fell to as low as $139 a month under some offers, while Volt offers have held at around $250 a month, according to the leasing marketplace Swapalease.com, but recently dropped to $199.
Those earlier vehicles are now starting to return to dealerships; and they’re going to dramatically affect the the supply-and-demand equation for used EVs—far more than they already have this year.
The subsidized-lease hangover begins
About 85 percent of Nissan Leaf models registered this past year were leased, and around 49 percent of Chevrolet Volt models were leased.
Estimates from the NADA place the number of those two used models hitting the market at 25,000 altogether; that’s more than half of the annual new sales and leases of new Volts and Leafs, together.
Analysts are anticipating that this will push prices downward. Although with retail used prices on many electric cars already astonishingly low, it begs the question of how much cheaper can they get.
The Leaf, according to current nationwide market-based data supplied by Black Book, has taken a plunge in resale value, with a 2012 Nissan Leaf SV already worth just $13,650, on average, by June 2014, and anticipated to be worth a lowly $8,050 in June 2015. That’s just 23 percent of its original $35,200 MSRP and $36,380 estimated retail price when new. And even when considering the $7,500 federal tax credit on electric vehicles, it’s a dismal 29 percent.
If a car’s been sitting in pristine condition, the story isn’t all that much better for the seller. Top ‘clean’-condition Leafs are only fetching about $1,500 more ($9,500) on the market.
One of our readers recently reported that they could purchase a 2012 Leaf SL with less than 10,000 miles and 12 battery-quality bars for under $14,000. “Since the slower level 2 charger didn’t matter to us given sufficient CHAdeMO chargers where we need them, saving $7000 was a no-brainer,” they reported.
There are plenty of confirmations that the price is still moving downward. According to Cars.com, prices for used Nissan Leafs sank more than those of any used car in March and April, dropping 14 percent year-to-date just through the end of April.
Cars.com reported a $14,495 average used price, factoring in 2012 through 2014 model years.
2014 Mitsubishi i-MiEV
If you think that’s difficult news for Nissan, it’s even worse for Mitsubishi. The 2012 Mitsubishi i-MiEV is selling for a market-average price of $5,750, or $7,000 for those top-condition ones. That’s also not much more than a fifth of the i-MiEV’s original price.
‘Back lot’ prices for perfectly good, late-model EVs
On both fronts, gasoline-powered no-frills ‘economy cars’ showed far better resale value, with the Nissan Versa and Mitsubishi Lancer worth a much higher portion of their original price (yes, even considering the tax credit) than their EV counterparts. In many cases, the gasoline car actually costs more than the EV in absolute money.
Even the Volt extended-range electric car has fallen victim to this trend, with 2012 Volt models now commanding $13,050 on average (just a third of its original cost), or $14,650 in top condition.
Tesla, by the way, is another story entirely. Its cult following, and its different sales structure, very much oriented toward getting trade-ins and paying them close attention, as in a Certified Pre-Owned program, means that even two-year-old Model S sedans are selling at around 80 percent of their original price.
Kelley Blue Book, another top pricing authority tracking used-car prices and residual (anticipated) values, confirms that EVs are continuing to depreciate at a faster pace, on average, than internal combustion vehicles.
“This is a trend that we’ve been tracking since EVs first started to appear in the auction lanes,” said Eric Ibara, Kelley Blue Book’s director of residual value consulting. “The depreciation has been steeper than we initially forecast, so our residual values today are lower, generally speaking, than our initial values.”
A flood of lease returns, cheap gas, and (an unjustified) battery of doubt
Although the Chevrolet Volt might follow a softer depreciation curve, longer-term, because of its ‘eco-icon’ status and range-extended operation (lifting worry if EV range plummets due to battery degradation), there’s likely a continued steep downhill slope ahead for prices on pure electric cars.
“More lease returns are coming back on Leaf later in 2015 and in 2016, and that’s certainly not going to help used electric vehicle prices,” said Anil Goyal, Black Book Auto’s VP of automotive valuation and analytics.
Goyal points to “a number of headwinds” that EVs have against them, at present:
- high MSRP (making them difficult to justify to own economically)
- low gas prices
- government and manufacturer incentives on new cars that drive the used-car price curve to a lower starting point
- high lease penetration (increasing supply)
- range anxiety (it’s still a problem)
- battery life concerns
Yet KBB’s Ibara notes that the company has not been adjusting its residuals down any further due to the recent volume of off-lease cars hitting the market—which may indicate, deeper in the data, that there are indications (energy/fuel price forecasts, for instance) that demand is simultaneously strengthening.
Taking all this prognostication into account, we don’t think that you should hesitate to grab one of these low-priced used electric cars. Here’s why 3-4-year-old EVs will remain an exceptionally good deal for the remainder of the 2015—and into 2016:
- The technology in batteries hasn’t changed much (yet). Tesla aside, while we wait for 200-mile EVs, the 5- or 10-mile gain that some existing models have received, through battery improvements and climate-control upgrades probably aren’t going to make a difference.
- No, electric cars haven’t “bricked,” and the vast majority of batteries have been fine. Unlike in personal electronics, these batteries are designed to last eight to ten years, or more, and have held their range far better than some anticipated. It’s likely still plenty for your commute and daily needs.
- A used EV is cheaper to maintain than a used gasoline car. No question, the lack of an engine, transmission, fuel system, exhaust system, and far fewer components add up to money saved—especially when you get to the years that tailpipe-emitters need some of those things repaired or replaced.
- What do you have to lose? (…except some gallons of foreign oil, of course)
While this all seems like bad news for sales of new electric vehicles, and while we try to be cheerleaders for electric cars and getting to the economies of scale where EVs are profitable, it’s hard to ignore the screaming deals on the used side of the market. If you want to make the jump to an EV and think the lease deals are great, buying a three-year-old Leaf or i-MiEV will likely cost you even less.
Click over to the next page to see which pure electric cars you’re most likely to find used, then go take advantage of those deals this summer, before everyone else finds out.
2011-2014 Nissan Leaf
- Sold in SV and SL models each year, with a base S model introduced for 2013
- Fast-charging was standard in SL, optional in S and SV (more limited in 2011)
- 2013 model has changes that can add up to a 14-percent improvement in driving range
- 2013-2015 SV and SL models, and some 2013-2015 S models, get faster 6.6-kW charging
- 2013-2015 SV and SL models have a (more efficient) heat pump, while all other models have a resistive heater
- Nissan has made battery improvements through the model years—especially to heat tolerance
2012-2014 Tesla Model S
- Base rear-wheel-drive Model S from 2012 through 3/2015 was rated at 208 miles, with a 60-kilowatt-hour battery pack
- Higher-capacity 70- and 85-kWh versions has ranges of 240 and 270 miles, respectively
- Upgrades delivered ‘over the air’
- 10-kW charging included in all cars, but some models include dual (20-kW) charging
- Supercharging optional, but in about 90 percent of cars
- Active cruise control and active-safety items weren’t offered until late 2014
- Door hardware has been one of few weak points
2012-2014 Mitsubishi i-MiEV (available in all 50 states but quite rare)
- Initially called the Mitsubishi i
- Mitsubishi hasn’t reported any major/significant battery improvements
- Most cars have (CHAdeMO) fast-charging
- CHAdeMO fast-charging became standard for 2014
- There was no 2015 model year i-MiEV.
2012-2014 Ford Focus Electric (available in all 50 states but quite rare)
- Liquid-cooled batteries have no significant reported issues in high heat
- Dealerships may not be used to seeing them, as they’re few and far between
- No fast-charging at all, but all cars have 6.6-kW onboard charging