Do EVs have poor resale value? Or will their prices stop melting like ICE?

Ah, another year, another EV myth recycled. The old myth of BEVs being too expensive to justify buying is getting harder to push now they start at well under $30k. (And might even break the sub-$20k barrier before Xmas this year).

Instead, we are seeing it recycled as “BEVs have poor resale values”, implying this will be a permanent feature of Battery Electric Vehicles (BEVs).

Quite simply: like all good disinformation campaigns, this revised version is based on a cherry-picked factoid. In this case, the myth is based on comparing early adoption period BEV pricing with their current second-hand sales prices.

This is then extrapolated well beyond its relevance to imply that BEVs will always have poor residual values, in an attempt to re-frame it in a way that puts off the Early Majority buyer (who is more canny with their money than the Early Adopter).

The truth of the matter is that BEVs are just like any other new technology: When a new tech first arrives, it is very expensive – in part because it’s initially made in low volumes. At that point, only the Innovators and Early Adopters can (or want) to buy into the emerging trend. As the tech becomes more mainstream, sales increase and mass production techniques enable prices to fall sharply.

BEVs started out in the 2010s as high-priced, short driving range niche products produced in low numbers.

By the later teens BEV tech had matured to the point that ones from then are very similar in specification and quality to those on the market today – although they were still expensive when new compared to today’s offerings as the economies offered by mass production had yet to kick in.

Today, BEVs are beginning to hit their straps in terms of ‘economy of scale’ pricing. Several are now available new from well under $30k – with 2026 to perhaps see the first squeak under the $20k barrier.

At these prices, they are starting to reach sticker-price parity with internal combustion engine (ICE) vehicles and are unlikely to fall much further.

Add in the triple whammy of BEVs having lower running costs, longer lifespans AND Fringe Benefits Tax (FBT) advantages over ICE vehicles … and BEV becomes the winner over ICE in terms of Total Cost of Ownership (TCO). This means that BEVs will inevitably soon become the vehicle-of-choice in future new (and second-hand) buying decisions.

Summing up:

As always – the Early Adopter has ‘taken a bath’ in terms of resale value, and this is no different for those early buyers of BEVs. We are now past that stage in terms of buyer, technology and price.

Second-hand BEVs from the later teens onwards are comparable in range, tech and quality to the current ones on the market – with many offering exceptional savings due to the fall in new prices forcing second-hand prices down.

These make ideal buying for the canny Early Majority buyer. However: going forward, significant BEV pricing falls are reaching their limit with sticker-price parity with ICE vehicles starting to arrive and, as such, resale values are likely to level out at around the standard ICE vehicle rate.

Looking into the near-future though, with TCO already in many cases tilted in favour of the BEV, second-hand BEV prices may well soon start to increase again due to their limited supply … and second-hand ICE vehicle prices fall exponentially instead as the ICE car becomes shunned by the second-hand buyer.