Team-BHP > Electric Cars


Reply
 
Thread Tools Search this Thread
Old 20th October 2019, 22:49   #16
BHPian
 
Join Date: Aug 2014
Location: Mumbai
Posts: 129
Thanked: 183 Times
Default Re: Concerns over the resale value of electric cars

While we are trying to compare the depreciation / realizable value of EV to a normal car, I think we are missing one very important variable - the technology improvements (similar to Moore's law in computers).

Battery technology will improve (most likely drastically) over the next few years and costs will go down (again significantly) over this period. Therefore, more relevant to the depreciation than the loss of capacity of the current vehicle's battery, would be the replacement available, in all likelihood at a lower cost per unit of capacity.

For e.g.
1. A year old mobile phone would probably not fetch more than 50% today, even though the specs would be top notch and could last a few more years - simply because everyone is launching new phones with higher specs at similar or marginally higher prices.
2. Look at cost of solar power - it was around Rs. 9 - 12 per unit in India like not more than 5 years ago and now it is available at Rs. 3 - 5 per unit. This is because the cost of solar cells has been dropping rapidly.

I think something similar will happen to these early versions of EVs. You could possibly get a new car with same (or perhaps higher) spec for same price.
aashishnb is offline   (1) Thanks
Old 21st October 2019, 09:53   #17
Newbie
 
Join Date: Apr 2010
Location: Mumbai
Posts: 8
Thanked: 4 Times
Default Re: Concerns over the resale value of electric cars

There is a study done by University of Michigan in 2018 which says that resale value of EV is 50% lesser than a similar ICE over a span of 6 years.

Link to the report: http://umich.edu/~umtriswt/PDF/SWT-2018-4.pdf

But this is for USA. In India, as GTO mentioned in his post, resale is a function of demand in the market which is negligible for the moment.
nalinsaxena23 is offline  
Old 21st October 2019, 10:46   #18
Senior - BHPian
 
PrideRed's Avatar
 
Join Date: May 2012
Location: BLR/PTR
Posts: 2,261
Thanked: 4,978 Times
Default Re: Concerns over the resale value of electric cars

Quote:
Originally Posted by aashishnb View Post

For e.g.
1. A year old mobile phone would probably not fetch more than 50% today, even though the specs would be top notch and could last a few more years - simply because everyone is launching new phones with higher specs at similar or marginally higher prices.
2. Look at cost of solar power - it was around Rs. 9 - 12 per unit in India like not more than 5 years ago and now it is available at Rs. 3 - 5 per unit. This is because the cost of solar cells has been dropping rapidly.

I think something similar will happen to these early versions of EVs. You could possibly get a new car with same (or perhaps higher) spec for same price.
Just a thought, Its been a while since smartphones have made into mainstream. Even now battery in most of the top spec phones last only for a day or may be little more. I haven't seen any revolution in battery department w.r.to phones in recent years. Barring reduction in charging time, rest everything has remained pretty much same. Even with ICE, our 1.5L petrol Amby used to deliver 12-14KMPL on highway, this was about 30 years back, come 2019 a 1.2L mill has a real world fuel efficiency of 15KMPL. Of course things like refinement, power, emission have changed but not much w.r.to efficiency.
PrideRed is offline  
Old 21st October 2019, 11:06   #19
Senior - BHPian
 
Sebring's Avatar
 
Join Date: Apr 2011
Location: Dubai/Bengaluru
Posts: 2,056
Thanked: 5,883 Times
Default Re: Concerns over the resale value of electric cars

VW guarantees the battery for 8 years. If anything were to happen, or if it degrades by over 25%, they straight away replace it. There is this good piece on electric cars, do watch it.
Sebring is offline  
Old 21st October 2019, 11:25   #20
Senior - BHPian
 
Join Date: May 2010
Location: Bangalore
Posts: 1,059
Thanked: 3,590 Times
Default Re: Concerns over the resale value of electric cars

Quote:
Originally Posted by PrideRed View Post
Even now battery in most of the top spec phones last only for a day or may be little more. I haven't seen any revolution in battery department w.r.to phones in recent years. Barring reduction in charging time, rest everything has remained pretty much same.
Am no expert on battery tech, but smartphones do a heck of a lot more these days than the old phones where the battery used to last days. With the screens, cameras, video streaming, Bluetooth, etc etc, i think the battery tech has improved by a factor of several times to allow a phone with so may features to last even a day and for several thousand charge cycles. So a similar rate of advance in battery tech in the future could see even better things.

Same with cars, the fuel efficiency figures may be roughly the same, but I think the modern car does so much more in terms of electrical and electronics systems and on board systems and things like that. Not to mention, is a whole lot more reliable than any of the older cars.

Again, am no expert, but I guess there is some physical limit to these advances based on battery chemistry. Hope some more trained people on the forum could pitch in.
am1m is offline   (2) Thanks
Old 21st October 2019, 14:12   #21
Distinguished - BHPian
 
Join Date: Aug 2014
Location: Delhi-NCR
Posts: 2,719
Thanked: 28,349 Times
Default Re: Concerns over the resale value of electric cars

It is too early to say what the resale value of EVs will be in 2025, or 2030 or worse still in 2040 or what issues and solutions around battery disposability and re-usability will come in these years. What is clear is that new commercial structures will come that will affect re-sale value - car+battery sold to you; car sold + battery leased; car & battery leased to you; car sold but battery physically switched every XXX time period etc. And right now we are in an environment where the battery is the more finite component. Who knows what technology may come in 20 years of intensive research in long life batteries or super low resistance motors that may change how business transactions are done with respect to cars. Let's say if super long life batteries come you may buy the battery and keep swapping the chassis/motor. Or if physical structures get to a point where battery and chassis are one ie the battery is the load bearing structure then we may buy the battery-chassis and motors and every few years swap the top superstructure and looks. The variables are far too many.

The only thing certain is that we are at the cusp of revolutionary once in a century change in road transport and are privileged to be witnessing and participating in this change. 50 years from now the younger members of T-BHP will be able to show off that they drove real cars with a gearbox and ICE engine!!

Yesterday I was explaining to my 11 year old grand niece about a world long ago when cell phones were not connected to the internet...and then about an ancient era when cell phones themselves did not exist....and then of an even older pre-historic era when most Indian homes even of the upper middle classes did not even have a land line. Poor kid. I think she believes I came from the Neolithic age. Similarly today we cannot forsee what techno changes will emerge.
V.Narayan is offline   (2) Thanks
Old 18th November 2019, 10:51   #22
BHPian
 
Join Date: Apr 2015
Location: Kuala Lumpur
Posts: 176
Thanked: 257 Times
Default Re: Concerns over the resale value of electric cars

Quote:
Originally Posted by sri_tesla View Post

While this is an interesting thread, I wonder about the resale value of petrol/diesel cars as the EVs gather market share.
True. I sometime think of getting a Hyundai Venue or something of that sort to replace my old Optra Magnum. But then I'm fearful of what good EVs can do to the resale value of obsoleted technology. So I'm holding on to my Optra until I can buy an EV in my hometown.
sreeharipv is offline  
Old 18th November 2019, 10:55   #23
BHPian
 
Join Date: Jul 2011
Location: Bangalore
Posts: 107
Thanked: 32 Times
Default Re: Concerns over the resale value of electric cars

I think that these cars will be massively outdated after 3 years and the battery life can also take a huge hit - can you imagine the battery life after 1000 charge / discharge cycles? Hint : Look at the mobile phones we use..
vivekrvcse is offline  
Old 1st January 2020, 08:26   #24
Senior - BHPian
 
lurker's Avatar
 
Join Date: Jun 2006
Location: Tura
Posts: 1,514
Thanked: 1,253 Times
Default

With electric cars looming ominously on the horizon, a very pertinent issue especially with consideration of securing car loans for purchase of EVs are their resale value, residual value and resale possibilities since unlike an IC engine, the EV once malfunctions has no parts that can be revived through a service. For eg, a battery pack that has shorted in a cell will render the entire battery pack unusable. So what is residual value in such a case, is it worth even repairing ?

How do bankers give loans for EV when they cannot retrieve any value from a seized or repossessed EV especially of the EV has a complaint which forced the owner to stop paying EMIs and the complaint is a basic one that involves malfunctioning powerpack. I think scrapped EVs would constitute a large chunk of NPA that the banking system would have to deal with in future.

Adding to the above thoughts, if a bank repossesses a malfunctioning EV whose owner has stopped EMI, what is the bank to do with this vehicle ? They cannot resell because that is only scrap value unless the vehicle is in running condition and the price to return the vehicle to running condition is exorbitant and as much as a new vehicle.

How does a bank even give loans for EVs in this context?

Last edited by Aditya : 2nd January 2020 at 07:58. Reason: Mod Note: Back-to-back posts merged. Please use the MULTI-QUOTE button instead of typing one post after another. Typos
lurker is offline   (2) Thanks
Old 1st January 2020, 10:37   #25
Senior - BHPian
 
speedmiester's Avatar
 
Join Date: Jul 2006
Location: bangalore
Posts: 1,843
Thanked: 2,892 Times
Default Re: Resale value of electric cars

Quote:
Originally Posted by lurker View Post
With electric cars looming ominously on the horizon, a very pertinent issue especially with consideration of securing car loans for purchase of EVs are their resale value, residual value and resale possibilities since unlike an IC engine, the EV once malfunctions has no parts that can be revived through a service. For eg, a battery pack that has shorted in a cell will render the entire battery pack unusable. So what is residual value in such a case, is it worth even repairing ?
As far as India is concerned, E2O and Revas are running for years. A neighbor of mine has two Revas which are more than 10years old and in running condition. Batteries are available and the motors are easily repairable. So no issue there.

When it comes to new generation of EVs, all manufacturers are offering 8yrs and 160000Kms warranty on their batteries. In terms of drivetrain/motor, the motors are far more robust and can be repaired with ease as there are not many moving parts, they may not even cost as much as an IC engine.

Banks don't have to worry much as they only offer loans with a max tenure of 7years.
speedmiester is offline   (4) Thanks
Old 1st January 2020, 10:54   #26
Senior - BHPian
 
lurker's Avatar
 
Join Date: Jun 2006
Location: Tura
Posts: 1,514
Thanked: 1,253 Times
Default Re: Resale value of electric cars

Revas & m2os did run but the owners were also grumbling about the service and support for their cars was not upto expectations and they had to use jugaad for various problems that crept up during ownership. Now also considering that these were just made-to-order boutique products what happens when the EVs go mainstream and thousands of them need battery changes all at once. Will these companies honour their warranties and change such critical and expensive components at one go of will they adopt stalling tactics and resort to shortcuts and blame games like certain german manufacturers are prone to do today. What if they ask for 30 days lead time for new battery pack to arrive. And owner or taxi operator refuses to pay EMI saying my car is not useable saar, why should I pay EMI ? What does a bank do with such a vehicle, which has a just replaced battery pack, why should anyone else repose faith in such a vehicle ? Why should people take such a risk especially if the company is known for poor record in honouring their warranties.
lurker is offline  
Old 1st January 2020, 10:56   #27
BHPian
 
Thermodynamics's Avatar
 
Join Date: Aug 2017
Location: Bengaluru
Posts: 738
Thanked: 3,567 Times
Default Re: Resale value of electric cars

How much does a three year old mobile phone, washing machine and TV costs, may be 75% lower than new ? I suppose EVs would also depreciate along similar lines when they become a commodity.

Every new generation of EV will make previous generations outdated.
Thermodynamics is online now  
Old 1st January 2020, 12:39   #28
BANNED
 
Join Date: Apr 2008
Location: BLR
Posts: 8,720
Thanked: 7,073 Times
Default Re: Resale value of electric cars

Mod Note : Please do NOT post messages that add little or no informational value to the thread. We need your co-operation to maintain the quality of this forum. We advise you to read the Forum Rules before proceeding any further. Request to post ONLY when you have something substantial to add to a discussion.

Last edited by GTO : 1st January 2020 at 14:27.
shankar.balan is offline   Received Infraction
Old 1st January 2020, 12:45   #29
BHPian
 
sandhyab's Avatar
 
Join Date: Jun 2019
Location: Delhi
Posts: 96
Thanked: 229 Times
Default Re: Resale value of electric cars

Quote:
Originally Posted by lurker View Post
What if they ask for 30 days lead time for new battery pack to arrive. And owner or taxi operator refuses to pay EMI saying my car is not useable saar, why should I pay EMI ? What does a bank do with such a vehicle, which has a just replaced battery pack, why should anyone else repose faith in such a vehicle ? Why should people take such a risk especially if the company is known for poor record in honouring their warranties.
So with ice cars if the car is in non working condition for a month does the owner have an option of non payment? Same is the case with EV cars. Banks always win. As for the brand which does this it will face the same fate as the German cars.
sandhyab is offline   (1) Thanks
Old 1st January 2020, 12:52   #30
BANNED
 
Join Date: Apr 2008
Location: BLR
Posts: 8,720
Thanked: 7,073 Times
Default Re: Resale value of electric cars

Quote:
Originally Posted by sandhyab View Post
So with ice cars if the car is in non working condition for a month does the owner have an option of non payment? Same is the case with EV cars. Banks always win. As for the brand which does this it will face the same fate as the German cars.
This is true. Sometimes the German cars dont have certain types of spares readily available and these have to be ordered or even imported. This may result in significant downtime. If the car has been bought on loan, then one cannot in all honesty renege on the loan repayment to the bank because that is a contract between one and the bank, not between one and the dealer. The dealerís responsibility has ceased and the liability of the vehicle has been transferred to the vehicle owner as soon as the vehicle is delivered.
shankar.balan is offline  
Reply

Most Viewed
Thread Tools Search this Thread
Search this Thread:

Advanced Search

Copyright ©2000 - 2021, Team-BHP.com
Proudly powered by E2E Networks