Why Electric Cars Lose Value Faster Than Gas Cars

Electric vehicles (EVs) have been around for a while now. They are becoming more common on the roads, and the technology is improving. Charging is faster, batteries last longer, and prices are dropping. However, there's a catch: EVs lose value much quicker than gas-powered cars. On average, gas cars lose about $0. 11 per mile, while EVs lose $0. 27 per mile. This is a big difference. One reason for this is the federal tax credits that were available for EVs. These credits reduced the price of new EVs by $7, 500. This means that used EVs already have a big price drop built in. Another factor is the supply and demand of EVs. Tesla, for example, has a lot of used cars on the market. This can make their value drop even more. Political controversies and new competition also play a role. For instance, a 2021 Tesla Model Y sold for less than half of its original price, even though it was in good condition. It's not just Tesla. Other EVs like the Nissan Leaf, Jeep Wrangler 4xe, and Volkswagen ID. 4 also lose a lot of value. For example, a gas-powered Jeep Wrangler loses about 29% of its value in five years. But the electric Wrangler 4xe loses 59% of its value in the same time. Even after considering tax credits and lower running costs, the gas Wrangler is still a better financial choice. This trend is seen across many EV models. Factors like market saturation and CEO controversies affect Tesla, but the issue is widespread in the EV market. Buyers should be aware of these trends when considering both new and used EVs.