How The Tesla Model 3, Chevy Bolt Will Drop Used EV Prices And Be Great News For Everyone (Except Current Owners).

With the Tesla Model 3 formally announced and Tesla Motors [NASDAQ:TSLA]  taking scads of deposits, some have heralded this as the moment that the electric car becomes available to everyone. With several automakers indicating that their next generation EV will be similarly capable and others suggesting that they’ll target the lower end of the market, it’s certainly true that the Model 3 and its kin open up the market substantially.

The fact that the next generation of EVs have markedly improved range —  and that EV technology, as it has matured — has overcome some of the earlier concerns regarding reliability, opens EV ownership to a much larger proportion of the population. But perhaps it’s not the top end of the market that will be most interesting to watch. The majority of shiny new electric cars, be they Tesla Model 3s, Chevrolet Bolts, or Nissan’s next iteration of the LEAF will stick to that same market segment where the current LEAF, Focus EV and e-Golf have gone – the upper middle class.

We're thinking Ford is missing a trick by not giving its electric Focus a stronger update.

Ford’s Focus EV fills a different niche than it’s gasoline counterpart.

What will be fascinating is the transition that will occur at the lower end of the market. Until now, a mixture of limited availability and high initial expense has led to remarkable residual values for used EVs. But amongst owners of vehicles like the Tesla engineered Toyota Rav4, and indeed, the original Tesla Roadster, there has been some discussion of the impact of the Model 3 on the second-hand value of their cars.

The Toyota RAV4 EV was on the road the same time as the much-missed EV1.

The Toyota RAV4 EV was on the road the same time as the much-missed EV1.

The second generation Toyota Rav4 EV has held its value remarkably well – retaining a used market value of around $30,000 until very recently. Checking the used adverts still finds many vehicles listed in that area, but recently a few have started to appear in the lower $20,000s – with some owners commenting that this summer – as the final year’s production come off lease, there is likely to be a glut of used Rav4 EVs hitting the market. And hinting to potential purchasers that this year may be the one to buy that longed for EV SUV.

And whilst owners of the very early survivors from California’s Zero Emissions Mandate – like the Ford Ranger EV, the Chevrolet S-10 EV and the first generation Toyota Rav4 have found their vehicles held their value remarkably well (how many other decade old pick-up trucks still sell for $5k when dead?), there are some ownership issues. Thanks to lackadaisical support from their original manufacturer and an increasingly precarious used parts situation, the owners of these rare beasts are keen to see them shift to the position of ‘classic’ rather than simply being decade old cars. Perhaps because they love these strange survivors of EV’s pre-mainstreaming, and perhaps also because they paid a substantial premium to keep these vehicles out of the crusher.

The result? These first-generation cars are listed for sale with some pretty substantial asking prices. There’s a disconnect between what most buyers will pay and what the sellers want for their first-generation vehicles — and the cars gradually expire through lack of use and no one to buy them.

Whilst practices like this might succeed in keeping such finicky vehicles out of the mainstream used market, more common fare –like the early Nissan LEAF and even the venerable Th!nk City — may find their market value tailing off. Indeed, in 2015, year on year, the 2011-2013 LEAF lost 26% in used-car average price. Even the relatively new e-Golf dropped 8%.

The Nissan LEAF's used price continues to fall. (

The Nissan LEAF’s used price continues to fall. (

Part of the drop can perhaps be attributed to age. In 2012 the LEAF got a bit better, and sold a lot better. Edmunds’ used car sales report suggests that the large number of cars coming off lease at 3 years old in 2015 caused transient price drops for that year’s model. A problem they say is likely to be repeated every year as leasing has continued to grow in popularity. The summer markets are being rapidly saturated as leaseholders return their vehicles and replace with new.  Perhaps this is even more true for EV owners where, for example, in the 3 years since the 2013 vehicles were new, there has been a large increase in the range of vehicles available. And each yearly update brings with it ever more capable, and reliable, vehicles.

Then again, perhaps that may mean that this may not be the year for the seismic shift in used EV prices, the shift that may finally mean that EVs really become fully mainstream. With neither the Bolt, nor the Model 3, nor indeed any of the next generation of 200+ mile EVs due out until at least the end of 2016, it’s just possible that leaseholders who’ve got a good deal on their current EVs may hang on one more year. Eeking one more year of use out of their current ride, before ditching it in favour of the next generation of EVs.

Don't think a Model 3 will meet your needs? That's okay.

The Model 3 may drive EVs into the mainstream in more than one way.

But when it does arrive? The Model 3 may herald more EV adoption than the number of deposits suggest, because as the price drops on older EVs, and they drift into being student cars and cars for lower income families, can you see those people switching back to gasoline? The savings on servicing and fuel will drive a generation of environment-ambivalent drivers to cleaner, greener tech. And that’s got to be a good thing.

Are you planning to trade in your current EV for a new one this year? Or will you hold out for next year’s planned releases? Let us know in the Comments below.


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  • Nice article Kate. I frequently get the question “when will EV’s be cheap enough for me to buy one”, and I point out the used EV market prices. The obvious part is, that these questions mainly come from people driving 6+ year old cars, many of which were bought used in the first place, so…
    We bought our Tesla via the CPO (used) program last year precisely because we rarely buy new. The most recent exception was my Smart ED purchase in 2013 where I waited 9 long months for my car, because there were only a few hundred destined for Canada, so I had to buy new, and wait!
    I do wonder what the prices of used Tesla S85’s will be in 2018/9. My wife commented that our Tesla has seemingly increased in value based on the activity on Ontario used Tesla’s in the past month, where asking prices are well above what we paid for our CPO. This is almost certainly due to the Canadian dollar currency changes from last year to this year which make new Tesla’s much more expensive.

  • Martin Lacey

    A combination of cost, proven reliability and more vehicles being available will help mass adoption, as does the evangelistic attitude of current EV owners!

    “Dieselgate” and other manufacturers practices such as exaggerated fuel economy figures may also help move folks to greener motoring. After all zero emissions is easy to measure.

  • Joe Viocoe

    Early adopters should always be aware that residual value is NOT going to be there. If they are disappointed, then they weren’t really supportive in the first place.

  • Bruce Moore

    I am on my 3rd Nissan LEAF. I chose to lease. Therefore, I am not concerned with residual value. I just turned in a 2014 that had a high purchase price at the end of the lease if I chose to buy and keep it. I upgraded to a 2016 LEAF with the 30 kWh battery. Best decision I have made in s while.

    • Karl Bloss

      I’m thinking about upgrading my 2012 to a 2016 SV with 30 kWh, but the lease prices are still a bit high. Perhaps when the 2017s and/or LEAF 2.0 come out the 30 kWh models will plummet in price. Still love the 2012, but sometimes would love to have all the new features (6.6 KW charger, heat pump, B Mode, etc.) in addition to the extra range.

  • dm33

    We turned in our LEAF and bought an ICE while we wait for the Model 3.
    Combination of high prices and very limited selection outside of California.

  • Seth Lundquist

    As a lower-income family who just purchased a 2012 Leaf that had come off somebody else’s lease, we absolutely love it for the low cost of servicing and fueling. It was about the same price as equivilant age/mileage ICE cars in our area. We have already started saving for a 2017 Chevy Bolt when they start coming off lease in 2020, but will probably keep the Leaf. Several Leaf owners have figured out how to add aftermarket chargers to increase charge capacity to 6.6kw (or even as high as 10kw!) so combined with Nissan’s battery replacement program, I’m not worried about our Leaf becoming obsolete anytime soon 🙂

    • Seth. Tell me more about your experience. 🙂

      • Seth Lundquist

        We purchased our 2012 Leaf (base-trim) almost exactly one year ago. Even with the somewhat high interest rate we are stuck with, the combined payment+insurance+electricity is only marginally more expensive than the monthly fuel bill that our junker ICE was costing us.

        The experience has been great. In fact, with long-range electrics like the Chevy Bolt soon to be available, we’ve decided that we will never buy an ICE car again! If we absolutely must drive a very long distance, we would rather rent an ICE than be stuck with one for everyday driving. And we’re not a particularly “environmental” bunch either; we just really believe the other advantages of electric cars far outweigh their single disadvantage (range).

        Driving a Leaf is like driving a car that has only a quarter tank of gas, so I still wouldn’t recommend a Leaf as an “only” car. But I think 150+ mile-range EVs (“half-tank” cars) would be perfectly acceptable as Only cars.

  • Lucas LeardMann

    Our 3 year lease on the 2013 Leaf is up in December. I want a longer range EV, but not sure if it will make sense to get one now. We are in the middle of this quandary!

  • Bryan

    I’ve owned two Chevy Spark EVs, a 2014 and currently a 2015. Will probably buy a new Bolt after it has proven itself, maybe in 2018. I live in Oregon where there’s a charger, even fast DC chargers practically everywhere. I’ll never go back to an ICE machine. My company sells solar EV chargers and as soon as we find a permanent home here in Oregon, that will be the first thing we add to the home.

  • I am sure Tesla will make a good Electric car, but the after sale service is more important. Here in Israel Renault decided it no longer replaces batteries that degrade by over 50% in just two years. And unfortunately most of the cars here seem to be having this problem and that’s probably why they stopped!

    • Will Davis

      50% by 2 years is a load of nonsense or otherwise indicates a serious fault with the vehicles

  • תמר נעים

    Hello, I have a Renault ZE, the car is from 2012, the battery can get me o 90km.
    Our cars under warranty but Renault do not fix this issue, they sent me to the local service provider that told me that Renault order them to avoid battery replacement under warranty, I contact Renault again and they sent me to the local service again.

    I am strongly suggest you to avoid buying any car from Renault because I do not see any good reason you will get a better service.

  • SS

    Would the export of these under 100 mile cars be a potential future? I’ve exported 7 iMievs myself for my rental business in the Caribbean. I plan to export a Genze scooter, 2 Vintage Electric Bikes and an eStar van I lucked into. It is a hemisphere where EVs are not sold or supported. Central & most of South America. All Caribbean islands have the same car availability as Central America.
    Tech side note: GPS systems don’t work well if at all in those markets either.
    You could say their market is too small to care about. But the way I see it, the companies/dealerships that could not sell of their inventory of shorter range EVs, used or new, have an untapped market there. Funny thing is, much of the region is property of EU nations, but they don’t have auto or financial industry equality. They have citizenship but no other benefits.