I've bought many cars, second hand and new, over the years and never looked at how much it depreciates let alone not bought a car because of it. I buy a car because I like it, once the monies gone it's gone. 🙂
Before I got my EV 2 years ago, I used to buy 2nd hand BMWs every 5 years or so. I could get a good spec 335d (worth £50k new) for around £30k as a 1yr old used car. That depreciation didn't worry me, as I new it was "new car" depreciation. I looked at instead, as a cracking saving of £20k for a "nearly new" car. The new i4 I now own (£57k new), is depreciating at about the same rate as the 335s did, but I'm not bothered, as, like Dave, I plan to keep it til the wheels fall off after 200k to 300k miles. I'm 54 now, so if I look after it, it may be the last car I ever buy, as I do around 11k miles a year at the moment, but after I retire, that will drop considerably. So keeping it for 20 years is entirely reasonable. OR, I buy a 2nd hand one for £15k in 10 years' time.
Depreciation is not a factor in leasing deals that are in effect for the driver, however it does have an effect on future leasing deals as the leasing company has to factor in depreciation. If through experience leasing companies have under estimated how much a type of vehicle depreciates, they will ensure that they get it right next time, and probably add some to offset their previous miscalculation. So for lease deals, depreciation is a factor. In 2023 the Standard Range Plus Tesla Model 3 in the UK was approximately £44,000, in 2024 it is £39,990. For people who have bought in 2023 that is both a £5K loss on top of their vehicle now depreciating more than it would had the new price remained the same or increased. For comparison the list price entry level BMW 318i SE petrol in 2023 was £33,555, and in 2024 it is £35,445. Approximately the Tesla one year depreciation is about 31.8% the BMW, 25.5%. These figures do not support the argument that is being made. Depreciation may not have been a factor worth considering looking back, but it is a factor looking forward.
And you, the expert, really believe that leasing companies have got all their figures wrong, have totally underestimated depreciation? Really? You really believe you know more than them?
Totally agree... Legacy Auto think that people will pay more just to have the "badge".... However, people are waking up to the fact that Legacy Auto are over-priced new and are simply not buying them at their high prices.
@mikadavies660 yes they are bloody expensive, because of government interference and mandates. Plus buyers of ICE cars are subsidising EVs in many ways.
May be they should sell the car without battery and rent the battery out for a monthly fee....Than the EV would be cheaper to buy than ice and the price of electricity plus monthly fee could equal the petrol price for the ice.
One man’s depreciation is another’s opportunity! If you lease you certainly know where you are but the lease company is a business so if they foresee huge depreciation the monthly payments will be high. However, it’s a bit like paying a premium to fix your energy costs. You pay a premium for peace of mind. Expensive luxury cars always depreciate hard whatever the power train and are either bought by companies writing it off against tax or money bags types where the depreciation is meaningless. Certainly run your car for a long period and the value proposition is better that’s akin to why the majority of people don’t do an iPhone upgrade every year any more
I am astounded about the number of comments pleading poverty and pity for leasing companies and how many experts there are out there who know More about depreciation than the experts
3:19) Dave, your lesson on depreciation risk for the leasing company is bang on. Hertz USA should have listened to you b4 Mark Fields bought 100,000 Teslas😂
The issue was that Hertz bought them during the pandemic when ALL automobile prices were through the roof with ridiculous prices. And since their model is to keep them for 3 years and then sell them, it was a really bad move because the prices of brand new ones were so much lower when the turn to sell them came. They took a bath on both the Teslas AND the ICE cars they bought during that time of peak, ridiculous prices. But for sensationalism, the media concentrates only on their EV's. Reporting on the ICE cars they lost so much money on doesn't sell headlines.
The other guy who sits at his desk taking the opposite view, showed the comparison of an the same ID Buzz model from 1 month before. 60 month lease with same deposit, before was £22,600, a month later £33,400. So it obviously do make a difference to both the customer paying an extra £2,000 a year and the leasing company who will probably see less customers! Fine if you think paying £2,000 extra a year is irrelevant! I know I would never do it.
I was out looking at a new EV 2 weeks ago. I looked at the e-C4, the e-Astra, and the MG4, all similar sized vehicles. No matter what the recommended price was, the actual price I could get the three cars for was £25,000 to £26,000. The price I could see for the petrol equivalents of the C4 and Astra, was similarly £25,000 to £26,000. They know the correct price, and will sell for the correct price, if you are sensible enough to ask. p.s. Got the MG4 Trophy, for the same monthly price I paid for a 4 year lease on an e-Corsa 4 years ago.
@stephen25uk tell me that in 3 yrs. Don't crash by the way. Insurance? Soon the government will tax home chargingvto hell. If you don't think so, you're a fool.
I once had a Ford Scorpio, now that was a lesson in depreciation! Shame because I thought that it was a great car. On the other hand I pulled into the Renault dealership in Gaillac last week for a chat and a coffee and, from the EVs on the forecourt, I couldn't see any excessive depreciation at all.
I liked the Ford Scorpio, Ford was king then with Mondeo man, and didn't mind trying to be different, like when it introduced Sierra blancmange mould. People laughed. Not laughing now if you happen to forget about that Cosworth Sierra you left in your outhouse 30 yrs ago 😂
Hi Dave, greetings from Oxford. I agree with your assessment on depreciation on cars, I have no opinion on handbags! If you change your car every 2 to 3 years you will always be experiencing peak depreciation, and you probably have more money than sense.
@@davetakesitonSo I see Labour are going to amend EV mandate. Sales are predicted to be around ~4% less that the original 22%. SMMT ceo said "the build them and they will come approach" isn't working, and that the 4+billion worth of incentives and discounts are not enough. "The fact is, we are building them, but they aren't coming in sufficient numbers to buy" "We cannot incentivise the market on our own" I can see the target being lowered to 18%, to give manufacturers a temporary reprieve. Otherwise, the fine money is just going to Musk (Labours public enemy no.1) or the Chinese lol. Ultimately, at least in the short / medium term (2-4 years) Labour with it's tenuous position, won't want to rock the boat, and be associated with job loses.
I usually keep cars for 6 years or more so depreciation isn’t high on my list of concerns. However, when I get a valuation for my 4-year old Model 3, the level of depreciation is on a par with my with previous Merc C class.
In 2016 i bought a 2014 nissan leaf for £10K with 14kmiles on it . Drove it for 7 years and sold it for £4600 at 9yrs old. I did the sums and it saved me money as it was reliable , pre-heatable, economical and loved the low speed congested 8mile commutes and running the kids here and there that clogged our last diesels DPF.
Yes, lease company's have to honour their contracts. Like insurance company's, lease companies assess the risk and charge you a bit more to cover themselves. Having lost a lot of money on the first batch of electric cars, they will charge much more in future to recoup thier losses. If tesla drop the price for a new car by 5 grand how will that affect the second hand car market, (leases).
Nevertheless, if the car is worth less at the end of the lease than the leasing company bargained for, then they will make a loss, and the only way to recoup that loss is to make the next wave of lease contracts more expensive. This can result in you not being able to have the car you want because the lease costs have risen substantially, or the brand is too risky for the lease company.
@@brendanpells912 It may well be but only by small amount and this is built into the calculations. Don’t worry about the poor leasing companies they have been doing their jobs long enough to know how to make a profit.
True, but in reality there are so many better EV’s coming out, you can get a better car for less monthly now than you could 3 years ago. I know, I’ve been looking a prices for my new company car in the spring. If you’re just looking at replacing the same car like for like, then yes it will be more expensive for some of them.
Why do people think batteries run out after 2years lo, there not triple a's lol they say batteries will last at least 20 yezrs .so that needs to get out there .
The fear, uncertainty and doubt around EV ownership is spread mercilessly by the popular press. I’m in the UK and I’ve owned a GV60 just over 2 and a half years and was speaking with a friend about them buying an EV but the press around battery fires, battery degradation and depreciation and the new one Electromagnetic fields was so intense even speaking with an owner couldn’t convince them an EV purchase was a sound move. I bought my EV new with the benefit of a windfall and because 2 and half years ago a 321 mile WLTP EV which could charge at 233kW of this make and model wasn’t available used. I’d encourage the average person in the street (if considering buying an EV only to do so if considering keeping it for a reasonable long period of time say 5 years minimum. - so many more models are available now and typically with 8 years battery warranty so the 5 years ownership will have the added benefit of a warranty and the peace of mind that gives. Some new vehicles - with service, road side assist and OTA updates included for 5 years can make a purchase from new compelling. The Genesis GV60 has this package (5-5-5) combined with low maintenance costs (typical of an EV) and low fuelling costs particularly if you have the ability to home charge can make the 5 year total cost of ownership very attractive. I estimated by GV60 might be with £20,000 in June 2027 - that would be a total cost of ownership for 50,000 miles of just £1 per mile . I can’t get Uber rides or public transport at that cost.
Buying and particularly selling is a nightmare - tyre kickers & timewasters. I just lease now through work on a Salary sacrifice scheme. Includes all maintenance, screen, tyres, breakdown cover and insurance for 4 people. New car every 3 years for a known fixed monthly payment and no headaches.
I think the problem with Legacy auto makers is, they currently sell an ICE car for £17k, and the engine costs say £3k. So they make an EV version of the same car, but due to their supply chain setup, the battery is say £8k. So they have to account for the extra £5k somewhere, and usually, it gets bounced onto the customer, making a £17k car cost £22k.
@ because Teslas are built as an EV from the ground up, with ground-breaking innovations. The legacy autos have, until recently, been an ICE/BEV mixed platform, with a supply chain that is lacking compared to Tesla’s. As a result, they pass the high cost of their batteries onto the customer. Tesla makes their own tech, rather than buying it in from other manufacturers. Im just as disappointed as you Dave, that legacy EVs are more expensive than the equivalent ICE. And, the BMW M3, is artificially high, just like the Taycan. Trying to appeal to the “more money than sense” brigade.
Lease prices are set on the difference between the price the lease company buy the car for and what they expect to sell it for. Over the years with ICE cars, the premium German brands like Merc, BMW, Audi were always cheap to lease (relative to their price) because depreciation was low. The problem now is depreciation is bad across all cars and yes the same applies for some EV’s (not all). This didn’t matter that much while we had very low interest rates (and the leasing companies got massive discounts on the cars). However, now interest rates are higher, depreciation is higher and the economy isn’t in good nick, makers are falling over themselves to try and sell cars and have put list prices up to levels where private buyers aren’t interested. There’s going to be several years of huge problems in the industry and of course the press are jumping on this and saying it’s all due to EV’s. It’s not - the whole industry is in oversupply and there’s going to have to be a major contraction in car production and the pain that that will begin to factories and suppliers.
Years ago BMW said the costs of the EV's in their range were £15k more, but you would recoup that premium in fuel savings. All nonsense selling prices are defined by the market.
Got a second hand BMW Ix 40 at 1 and 1/2 years old from auction. The equivalent BMW x5 with similar performance was almost identical in cost. The Ix had cost significantly more to start with. Once the EV hits the regular punters the crazy depreciation stops and regular car depreciation continues.
I bought a car NEW and kept it for FIVE years (roughly, usually a little more) and then traded it. Why? 5-year, 100,000-km warranty. Kia's 5-5-5 warranty. I bought several NEW Kias (between me and my wife) simply BECAUSE of that specific warranty (and a very, VERY good service manager). And for about 15 years I had not "angst" with my cars, I always had roadside assistance (5-5-5) and no major expenses and a predictable monthly cost. Depreciation? That was what rich people pay on their Mercedes and BMWs, or stupid people pay on their Chargers etc. Toyotas were more reliable, but a VERY good service department and 5-5-5 meant I NEVER worried. And to be honest, the Kias NEVER let me down, either. Depreciation is - in our society - a tax on stupidity. Smart people behave as Dave describes, and don't do stupid things - like BUYING a new car every 2 or 3 years. If you REALLY want to do that - LEASE.
I agree leasing is the way forward, my Ora is now 14 months old and I paid £2200 deposit and payments of £247 over 24 months, making a total of £8128, the same car is now £8787 deposit and 24 months at £732 making a total of £26361 over 2 years, the list price of the car is £32500, so the lease company have learned their lesson, some cars depreciate more than others
Great video Dave, I believe some depreciation was bigger amongst the cars that were well overpriced to start with. Many of the Stellantis group cars come to mind. Obviously Tesla dropping the prices of it's new cars was also affecting their older cars prices. PCP is a good protection against as you have the option to buy or hand back. Lease obviously protects you and all you have to be is happy with the amount you are paying each month.
@@paulbuckingham15 That affected the monthly price to make it uneconomic for me. I simply ignored the mileage restricition and went for a trade in at the end of the agreement.It actually worked to my advantage.
It seems to me that the people who concern themselves with depreciation....are the people who can't afford to buy it in the first place....so "wow look at the depreciation" is their excuse for not buying it. Friends of mine spend tens of thousands each year in "depreciation" but are conveniently blinkered to it....first one follows his beloved football team around the globe and doesnt bat an eyelid to paying £500+ for a ticket to watch grown men run up and down trying to get a ball to kick into a net...depreciation=100% 2nd mate similarly globe trots several times a year to have a leasurely stroll in the meadows with a stick, trying to knock a small white ball into a hole several hundred yards away, then picks it out and then crazily does the same again...18 times😂...Bonkers! his depreciation is....exactly the same...100% 3rd mate and his wife...eagerly spends thousands every year sitting on a boat staring at the sea for hours on end, sometimes being seasick, several cruises a year they do ...their depreciation is....yep, exactly the same....100% Yet bizarrely none ever mention depreciation or express any concern about how much money they have spent (lost)! Mate 4. Him and his wife have spent in excess of £60k in the last year renewing their kitchen units and bathroom suite, didnt bat an eyelid... YET... Mention cars to them and suddenly they seem overly concerned and stressed with "depreciation" 🤣😂🤣 So....£10k depreciation on a car over 3 years looks to me to be an absolute bargain! This "depreciation " and of course, in the case of solar panels, storage batteries, EV chargers, heatpumps etc...the old chestnut of "ah yes, but how long will it take to get your money back" mentality is truly hilariously baffling 😂 Talking of the "Value" of things, handbags included, is ultimately what someone is willing to pay for it...msrp is simply a ruse by manufacturers to big-up their product to attract those who "perceive" quality is judged by the price. So...car x with a msrp of say £50k new is now being offered at a 25% discount...or perceived depreciatikn of 25%...NO! Depreciation DOES NOT EXIST UNTIL YOU SELL THE ASSET!....Depreciation can only be calculated WHEN the car is sold.. calculated upon the difference between the price you realised from the sale deducted from the price you actually PAID for it....NOT its manufacturers or dealers list price which is irrelevant. I personally, and my mates mentioned above dont even consider depreciation... if we see something we like we like, and can afford it, we buy it and enjoy owning it, if chance you get something back when you have finished with it, then thats a bonus...so, with the above scenario.....that'll be me then.....the one daft enough to buy a depreciating car 😂
I'm sorry Dave but your comment regarding depreciation being irrelevant if you lease an ev is just nonsense. The lease company will be taking a massive hit when the vehicle goes back and therefore cheap lease deals are unsustainable. Equally through enormous discounts manufacturers are crucified themselves trying to meet government regulations. The fact is that most people will not buy an ev at the moment. Just ask the people of Luton what they think😊
I can get a brand new budget EV for £150 per month, or a brand new Tesla for £299. I don't care a single jot how much it depreciates, not my problem. 10% or 90% not my concern. Don't even think about it and certainly don't waste a single second wondering if leasing companies have got their sums wrong. Once again, not my problem, not a single jot.
@@daveyjack1959 they only crucified themselves because they didn’t smell the coffee grains early enough and are building compliance cars. They’re just not geared up to make enough cars efficiently as they need to in order to make a profit and sell them at a competitive price. If these cars are too expensive relative to the ICE equivalent of course most people won’t select the EV option particularly at the lower end of the market. The much hotter secondhand market for used EVs pays testament to new car price being the key barrier to entry. Things are changing though but it will take time.
It does make a difference. The leasing companies take depreciation into account when you lease your car. They are not stupid. The price per month is more than a car that depreciates less,
Statistics or what the bloke down the pub told you? The second hand market is very volatile for expensive stuff like cars because nobody has any money. Supply and demand.
The stats are manipulated (cherry-picked) by mainstream media, particularly in the US, to support a particular narrative (that the media are well-paid to support). Part of the cost of freedom is learning how to see when you are being manipulated and by who; sadly this will be the downfall of what used to be the greatest country on earth.
One thing that skews this figure is the purchase incentives. In my area you can get 10 grand off of an EV, an much of the US you get 7500 off. This means in order to sell it later the difference between MSRP of the original and what you can sell it for is much larger but you didn't actually lose that money because you received the rebate. So the depreciation figure will look like that 60K EV is now only 30K after 5 years looks on paper like 50% depreciation but the original owner only lost 50k to 30k or 20k, which is actually only 40% which is right about the average 5 year depteciation of vehicles (iseecars analysis showed average of all vehicle at 38.8%). Your point about phones or TVs isn't just the value of the item it's just that the average person keeps a car for about 5 years and they last about 15 on average so it's very much expected that if you are buying it new you will likeley sell it. That is not generally the expectation with a phone or TV but only randomly happens so whybtrack it if it isn't the normal expected behavior.
So ICE car legacy make an EV , know they will lose hundreds on servicing perks (oil, filters, brake pads), the directors also know , with their oil production mates that they’ll lose £4000 worth of fuel over 4 year pcp, and that a buyer will save on tax…. So they add these costs onto the EV…. I hope they go bust
Thanks you have inspired me spot on in the later part the used evs maybe are overpriced to start . C4 grand picasso had one super comfy loads of space . Poor gearbox . 200k wow . I bought a c4gp for 1k kept for 1 year sold for 1k. Lucky me . Deprecation doesnt matter until it does . Best avoided .5 years old 50k is my rule .now at least 50% of its new price .
Vauxhall have been a serial overpricer/discounter. Wifes current car is a fancy 2017 Corsa SRi... List £15k and change, we paid £9K and some, pre-reg with 50 miles, still good and does 3-4k miles a year. Mine a 2020 MG ZS ev Exclusive bought in the first tranche with Gov Grant and MG matching, to get £21k price. 5 years on its worth about £12k as low mileage, so depreciation of £9k , depreciation cost of £150 a month, less than most lease deals, and I'm keeping it.
Vauxhall (and the rest of Stellantis) are the worst for this in the industry. They produce a raft of indentikit EV’s in the £30k to £40k range, all with the same underpinnings and all ludicrously over-priced a list price. Then they hawk them around leasing companies are huge discounts (20% or more). The odd person gets caught buying near list - I feel really sorry that they’ve been duped. Of course, these are then the worst depreciators, often only worth £15k to £20k within 6 months, when people don’t realise they were sold new at £25k to £30k anyway. It’s a gift to the anti-EV press who can claim ‘massive depreciation’, where it’s Stellantis who caused the problem in the first place.
To those worried about depreciation on an EV , all I have to say is ...don't buy any new car because massive early depreciation is normal and just less to worry about. The old nugget about losing value when you drive it off the lot ain't just joking so if you choose to buy a new car just ignore the depreciation because you knew it would happen from the get. Better yet , buy last year's model and negotiate a discounted price , then keep the car for many years until the maintenance costs start to rise and then sell it for the going rate.
Yes I got ripped off and so does everybody who buys new from a Jewellery shop . That was my point if you buy new you get ripped off . Never seen a jewellery shop selling new by the weight unless it’s second hand or stolen clever clogs…
I think Depreciation is important, it may be your problem for leashing or pcp, if these company lose too much they might put up the rates for the next car you going in to lease, so you might need to find more money. Plus for me a low earner who buy his car, my cars have been Honda and they have always held there value and it’s really helped me buy my next car. If I was to lose too much then it would really effect what I could afford. So it does matter. But I think ev are slightly overpriced which is why they fell so much.
Tesla lease 9 months down and £250 per month? At least be realistic with your examples. EV depreciation is not only real but it's massive, much more than household and domestic items. Your theory would kill the car market as no one would buy new, meaning there wouldn't be any used cars for sale. Also I don't think these EVs were overpriced, I think they had to price them where they did to recoup the massive R&D costs. But when placed at the side of one of their ICE equivalents it's made them look much more expensive. Again hence why new EV sales are so poor.
Absolutely. And it's lease companies that are making up 90% of UK EV sales. Joe public aren't buying them in anywhere near the numbers needed for the 2035 cut off date.
Mine this year was £450 for an IX 40 down from 550 last year and the same for when I had a BMW 520d two years earlier. Again another scare story from the ICE luddites.
Still love ya channel Dave but, And yet the model 3 was supposed to be a $30000 vehicle. That's £23672 in today's money. There is of course import charges but that in no way brings the price of a model 3 up to £39000.
Like others on here I’ve never bought a car with any thought of depreciation. The people making this point on UA-cam all seem to be car dealers or similar people in the motor trade (who presumably care a lot about depreciation). That said what about pcp deals: isn’t depreciation relevant there if you are eventually looking to buy the car outright. I’ve never done this so I don’t know but I assume the deal is based on the value of the car when you enter into the contract and possibly factoring in on some dealer assumed depreciation. If the depreciation is much greater than the contract allows for isn’t that a problem in that your monthly payments and final payment might be out of promotion to the value of the car.
So do you want a Mercedes C class, or a Tesla, I'll choose the one with a hundred years experience in vehicle manufacturing, but as they say beauty is in the eye of the beholder 😊.
In the end you get what you pay for so they say, designer goods have a premium because they are built better, and have spent the money to design, build, and test the product. Copies obviously are not made to the same standard , and with inferior build , and cheaper quality raw materials, and haven't invested in R&D, and don't adhere to environmental, and good employee standards. Can some of these aspects be said about vehicle manufacturers? Well that's up to the purchaser to decide.
My L/R Discovery cost me £17k new, lasted 19 years and 140k miles and sold for £500. Depreciation at just over 12 pence per mile.. Now 35 years on My EV cost £33k has currently 95K miles on the clock and is on course for 140k miles also. Depreciation will be around 24 pence per mile. Taking into account wage inflation the EV will be a cheaper deal.
Depreciation isnt new , in 1993 i bought a 3yr old 36k mile Astra GTE16V for £5k when it was £16k new. It varies a lot though depending on many factors.
Amazing car the 16v GTE, my neighbor had one and my mum had an xr3i and they would argue (jokingly) about who was better. I liked the dash on the gte but the overall interior was better on the MK3 xr3i. The gte a little quicker. The funny thing is today them og hot hatches are slower than almost all new cars today, and handel worse too. I did own a 2016 2l diesel GTC, that was one of the best handling normal cars I've driven, it's only downside was it's width. As wide as a rangerover, and its tyres were very expensive. Only car I've ever owned where having more than half a tank of fuel in it, upset it's balance. Brilliant longer range car, drive it to Spain a few times.
Hot hatches lost value extremely quickly in the early 90s because of high theft rates and massive insurance premiums. Demand was on the floor. Same now with EVs. People don't want them because they're nowhere near as usable as petrol or diesel cars.
The why are petrol and diesel sales dropping through the floor. Diesels in decline for over 10 years and every month this year. Petrol in decline for three out of the last four years, and seven out of the last ten months this year. Yet BEVs have increased year on year and month over month in the same timeframes.
@@GruffSillyGoat Actually, it's the other way around. Watch Barrie Crampton's videos on sales figures. Unlike Dave, Barrie shows you the evidence. EVs aren't selling. They're just being pre-registered.
Pretty much only significantly affects the 3 year from new car owners who swap like clockwork. It's the lease companies who are losing their ass. That money has to come from somewhere. Naive opinion in some regards
The lease argument is the same as saying a car is like a mobile phone? I am currently on my wife's 2nd handme down phone....which I will keep till the battery dies ! They all lose their charge in the end. The lease company's get money from banks, and in the end, it's all going to "subprime." The car loan industry and end in us bailing them out, then massive inflation ...and on .. and on it goes....2nd biggest purchase we make and it's now beyond working people to afford.....
Time will tell how long these batteries last, at the moment it feels like a significant risk, someone will get caught holding the bag and lose all value left in the vehicle.
@@martinmcg7980 We know how long batteries are likely to last from EVs that have mega mileage on their clocks, to BYD now giving lifetime guarantees, to a minimum of 8 years offered by other manufacturers and don't forget batteries rarely "break" they lose range over time.
Time already tells us. Search Tesla battery degradation and the stats show an average of 12-15% loss of capacity after 200,000 miles. And the newer LFP chemistry batteries will last a lot longer.
The jury's already in on this point, the simple answer is they now last for the lifetime of the car, or indeed longer than the car with a fair number of EV batteries now finding use in 2nd life roles within battery storage farms.
They will last for most cars longer than the rest of the car. The problem is there will always be cases where this doesn’t happen and the press bump all over it and say ‘look EV batteries fail;. It’s the same as ICE cars, there have always been lemons and always will be.
If the electric care depreciate so much how comes when I was looking I didn’t see it . Most of them depreciated no more than petroleum cars . The truth is nobody wants to buy a second hand car anymore with cash so you have to trade in and all the dealers offer you the same money for your car . You can’t find a second hand car unless you go to a dealer and I don’t see them selling them off cheap . Depreciation my a backside ….
Well I'd have to disagree with the leasing. Your Leases will factor in the cost of the car after the lease. If they expect the value of the car to be low your lease deal will cost you more. So technically you are paying for it.
If you know exactly how much you will have to pay each month, and you can afford it and are happy to do so, where's the problem? That price is fixed regardless of depreciation.
@@Hell-Hound1 Exactly. The big advantage of leasing is that you don't get hit with all of the depreciation at the end of the lease. And as you say Hell-Hound, if the leasing payments are agreeable to you, then there is no issue. Quite why these people who shout from the hill tops about EV depreciation do so when they've no intention of ever owning one, I have no idea....
You can cherry pick examples to 'prove' just about anything. Example; A Ford Escort Cosworth would have cost you circa £20k in 1992. A 2000 mile example has just sold at auction for around £180k. A couple of months ago, a brand new Volvo EX30 EV would have cost you circa £40k to £50k depending on spec. However, Volvo are now advertising pre-registered examples with delivery miles for £35k. Engage in a bit of haggling, and you can get one for £25k. So Volvo have taken £15k to £25k worth of value out of your new car right off the bat. That's going to hurt, but it gets worse. As a 2 months old used car with 2000 miles on it, it will be worth considerably less than that pre-registered example for £25k. I doubt a dealer would give you more than 10 grand for it as a part exchange. That's around £30k to £40k in depreciation over 2 months! Using Dave's logic, and by cherry picking two extreme examples, I could argue that buying a petrol car will make you £160k, and buying an EV will lose you at least £30k in just a couple of months. But it's not that simple. Every car retains or loses value at different rates. Do as much research as you can, and listen to both sides of the argument. Dave is pedalling an agenda. He does not have your best interests at heart. Listen to Barrie Crampton (a car dealer who actually knows what he's talking about), and you get an entirely different picture.
Although I am not going to disagree with you regarding depreciation and we agree EVs are depreciating faster than dirty cars (at the moment... that will change), then it must flow through to lease costs given the leasing company is aware (has predicted) what the car will be worth after being handed back. Countering that is any subsidies and net cost impact (e.g. low/no BIK). So... do the homework, compare costs, make a decision and then forget about depreciation, as you suggest.
i don't think you are correct about depreciation. I just bought a 71 reg 3 year old 24,000 mile Zoe R135 GT-Line I believe it cost well over £32,000 new. Despite not being very old, low mileage and still having 2 years manufacturers warranty and 5 years remaining battery warranty I bought it from a garage for £10,500 that is close to a 70% depreciation. In comparison I have a Hyundai Tucson which cost new about £31,000, it is almost 6 years old and done 45,000 miles. So almost twice the age and twice the mileage of the Zoe. Yet I have had 2 firm offers from garages of £15,500 for it. Both cars almost the same new price. ICE car twice the age and mileage and yet still retains considerably more value than the Zoe. I of course am REALLY pleased with my little Zoe, I think i got a total bargain. Basically buy EV's 2nd hand. I also believe company car drivers get excellent tax deals with EV's but don't know much about that
If you'd maintained your Citroen Dave, it would have lasted much longer, and retained more value. A Citroen diesel engine will do 400k miles and more if you look after it.
As an old reliable nokia phone owner, If you can't pay for parking with your very expensive phone with an app because of intermittent hi fi reception around gb would you want a cash slot on electric chargers?
The big question is why are EVs still priced higher than their ICE counterparts? We know EV batteries have dropped massively in cost over the last decade, and the electric motor ought to be cheaper to build than an ICE engine with all its complications. Everything else is, or can be, the same in both types of vehicle. Use the same fuel door for the EV charger, but have it wired to the battery instead of feeding into a fuel tank. We don't need a different grille for the EV, just use the same external look, but block it off inside. It's only the powertrain that needs to be different. Are the manufacturers assuming they'll sell fewer of them, so they jack up the price to get a profit? If you plan to sell 100,000 of a model, the first 20-30,000 will be manufactured at a loss, but the rest will make back the profit. If you assume you'll only sell 30,000, then each one has to be priced higher more a profit.
Not all of them are. A new MG4 is £27k, a new petrol Ford Focus is £28k. There are also other examples of new EV's priced similarly to equivalent ICE cars
@@Brian-om2hh That's good to know, we need price parity. The MG4 looks like a really nice EV, but it's a Chinese car so it won't be price parity in the USA under Trump. Ford decided to shun the traditional small car buyer in the USA, so the Ford Focus is a currently a thing we can't have on this side of the pond. Our selection of affordable EVs is a lot smaller than you get in the UK, and with the incoming administration being in the pocket of big oil, I don't see that changing soon. Fortunately I already have my small EV (Chevrolet Bolt), and won't need another for quite a while.
The simple answer is that automakers are making EV versions of bigger and bigger trucks and SUVs requiring bigger and bigger batteries to power them, while also offering bigger and bigger ranges for their entire lineup. Of course, more battery capacity is great, but it does mean that even if the cost per kWh to make an EV battery is going down, that the total cost of the EV battery pack may not actually be getting cheaper, at least not at the same rate. The good news is that not all EVs are average EVs and, at the end of the day, you only care about the economics of the particular car you own, not every other car out there with the same drivetrain. If you stick to a smaller car with 200-300 miles of range (rather than 400-500 miles of range) the EV should cost similar to the ICE version, which will help keep depreciation in check. Another factor going on is that a much larger proportion of EVs made are luxury vehicles compared to ICE, and luxury vehicles cost more for reasons that have nothing to do with batteries or electric drive train and everything to do with soundproof walls or leather seats, which would be exactly the same in a luxury ICE vehicle.
So let's believe that you are a competent driver, after 180,000 miles, suddenly, your clutch and head gasket went at the same time. Any honest local garage near Preston would drop the engine send the head off to be skimmed (same day or next day if they where busy), new clutch, timing belt, water pump and tensioner for around a grand. Maybe you might need a new battery, exhaust, brakes, rubber bushes and tyres for 500 quid, to pass an mot. Could you explain, (as a competent driver), what were the other 3 and a half to four and a half thousand pounds worth of faults with your car that you hadn't noticed? How much would it cost to replace a battery in any electric car, plus tyres brakes suspension rubbers etc
Boy are you out of touch with dealer prices: My local Renault dealer charged me £1,200 for a head gasket on a Laguna over 8 years ago. Quotes for a replacement double clutch 6 years ago on my Citroen C4 Grande Picasso were over £1,500. That's nearly 3 grand just there. And £500 for battery, exhaust, brakes and tyres. What planet do you live on? Tyres are £100 each, as is a new battery. As for exhausts you are crazy, so far off the mark that I can't be bothered to
Dave, car manufacturers don't pluck car prices out of the air, l am sure they add up what its cost them to produce then add the profit on top. It's still more expensive to build the electric ev fiat 500 than the petrol one, and most people would prefer the petrol one anyway. Fiat cannot possibly compete with China which has bought up most of the mineral rights for battery production around the world, and have manufacturing on a huge scale paying minimum regards to employment, and environmental concerns along the way no doubt.
In the UK fossil-fuel car sales have been dropping for years, nearly 10 for Diesel and 5 years for Petrol. With the new EV market the 'legacy' automakers attempted to market them as premium vehicles within their range to maximise sales profits no longer being seen on their fossil-fuel lines. However, the pure-play EVs, Chinese and Korean manufacturers pulled the rug out on this game by reducing prices or offering more compelling products, leaving the older automakers with high R&D and production costs for very little gain as the got the market timing wrong.
@@GruffSillyGoatYou're not concerned that China can afford to flood our markets with cheap EV's until EU manufacturing collapses leaving them to take control of the car market. Because the Chinese are a open , democratic society that doesn't want to invade Taiwan, and dominate the world by controlling the supply to all the goods we require. China has systematically gone around the world buying up all the resources in the third world countries in return for infrastructure in these countries, and by doing so hold strong influence over these countries. No l am sure the Chinese are doing this all altruistically.
The main reason EV’s are more expensive now isn’t really the cost of the battery or materials, it’s the fact that volumes are still small so the massive development costs of getting a car to production are being shared across a lower number of vehicles. It’s a Chicken and Egg problem - we need to volumes to lower prices but because prices are so high, volumes are low!
@@ISuperTed - indeed, but that's a symptom of commitment and timing issues, some automakers invested in EV production lines alongside their ICE lines to offer EVs at similar prices to equivalent ICEVs. Whilst others choose to wait and go the more expensive toe in the water approach of using old factories within their portfolio, not adapted for efficient EV production with some choosing to hand build as well. Those who comitted produced EVs at lower cost resulting in lower car prices, the others offered high spec models at premium prices that were not as price / cost competitve.
Has he ever been in the big name London fashion stores, where they do sell at full price? And they will be for maybe 6 months, but it's fashion and the big reductions always come with things like hand bags. Is he saying EV's are a fashion item? That would explain the huge price drops of course, but we all know that transport is barely a fashion! Seems a desperate clutch at straws to feed us with a bad narrative yet again! Not really true about comparing a model 3 to a BMW you quote. Just had a look on AutoTrader. Most 2 yr old model 3's were around £24k to £25k, only a couple were near £27k and they were the long range models! I picked around 20k miles cars. So not the general £28k you were saying!!
I know you need long videos to help monetise them, but 30 mins rabbitting on about one topic is too long, I bailed out half way through. Otherwise keep up the good work.
Well, they were saying 5 years ago that the break even point on EVs was when batteries dropped under $100 per kWh. A quick google finds they are currently circa $110 per kWh according to goldman sachs and expected to drop to under $100 per kWh in the new year. Reuters were reporting LFP cells at as low as $59 per kWh at the end of last month, with NMC cells at $68 (assembled pack costs will of course be higher).
That’s actually still very difficult to do, as EV volumes are not high enough to get a comparison (yet). If a car costs £500 million to design, build etc. into volume production, you need to divide that £500 million across how many cars you’re selling to say how much ‘per vehicle’ it costs (plus obviously the actual build cost with the metal, labour etc.). If you’re selling 10% of the volumes of EV’s compared to ICE, that development cost is very high per vehicle, so you’re not comparing like with like. It’s going to be at least another 5 years before there’s enough EV production to make a valid comparison.
Dave , how many people run a car until finished, if you can afford a new car and have the money to do so you're more likely to want to move it on after three years or so if you're still earning enough money to do so. So it does affect 90% of purchaseees l would say. So the question to most is how much am l going to loose, and currently like it or not EV's are depreciation significantly greater than ICE , and will continue to do so as our government dictates to us we must have EV's despite the majority of people not wanting them . ICE values are only going one way and that's up, l recently sold an 12 year old ka, and couldn't believe how much l got offered. I'd valued it six months earlier at the same showroom, but decided against it. I came back to six months later with the same car ,same showroom and got offered a £100 more.
Dave, who's never worked in the car industry. You will be paying more for the lease per month. You don't seem to understand the NEXT car you buy will cost more. Tell me honesty would you or anyone buy a second hand battery. Have you EVER bought a second hand battery. The government earns 28 billion from taxing ICE cars, do you seriously think when most people have electric cars you won't be taxed to hell. All those subsidies will end. It's easy to track electric cars, that's the idea. Clueless Dave strikes again, comparing iphones to EVs. Sad that people are patrions.
Depreciation for any car lease companies is a matter of calculated guesswork on something new, trends in purchasing habits or simply bad news eg diesel gate. They have to adapt and this is nothing new to them. As for second hand batteries it is a red hearing brought on by the MacMaster's of you tube. My batteries have 7+ year warranties not a poxy 3 year warranty for many ICE engines. "It's easy to track electric cars" just like most newer cars, so your conspiracy theories are the same for both. Please do some proper research.
Really strange comment because all my regular viewers know that I did spend 10 years in the car industry ending as sales manager in a Citroen main dealership, I did buy a second hand EV, it was 4 years old when I bought it and still have it, no it hasn't failed or caught fire, it is running beautifully, it will last many more years, I do travel a higher than average milage and would never ever go back to ICE. Also please list all the subsidies EVs get. Why do you have to make up your "facts"? Just what are you trying to prove? And why?
@ISuperTed economics 101 leasing companies make some money on the lease but the bulk of profit is made on the second hand sale after the 3 years hence the milage limits. So if your main profits are now gone your business model is knackered.
Leasing companies seem to be thriving. Maybe they are pretty good at what they do and make a pretty profit on their core business. Maybe you the obvious self appointed expert need to Google the finances of a leasing company. The one I just Googled is 20 years old, very profitable and growing substantially. Or maybe you know better.
If you want accurate information about EV depreciation, check out Barrie Crampton's excellent videos on the subject. Ignore Dave, he's talking the usual rubbish.
So he who has leased, has most !. I don't know where this 'change your car every 2/3 years came from. When we had horses we kept them until they died so where did this need to change come from ?. My Tesla changes every month via a software download so I guess I have the equivalent of a new car 12 times a year !. I used to swap phones every year now I'm keeping it until it falls apart ditto the car, I expect to be driving this one for at least 10 years unless like you something compelling comes along like a robot taxi then we will probably sell our car and download the 24/7 car app. P.S. We were at IKEA Sheffield yesterday, there's a bunch of Tesla chargers next door in a little retail park, price per kilowatt ? 39 pence !!
I agree if you buy the car and keep it until the wheels fall off then yes depreciation is meaningless. (I've got a 24 year old Jeep XJ!!)
I've bought many cars, second hand and new, over the years and never looked at how much it depreciates let alone not bought a car because of it. I buy a car because I like it, once the monies gone it's gone. 🙂
But that's you. Throwing money away you'll regret later in life.
@@mikemars5984 Why will he regret it? I don't.
@DJBaldPaul when you get a lot older you might. Wish I could have all that money back I threw away on cars.
Or you could be lying on your death bed thinking I’m glad I bought the cars I wanted. You will not be worrying about cash I can guarantee you.
Great view
Before I got my EV 2 years ago, I used to buy 2nd hand BMWs every 5 years or so. I could get a good spec 335d (worth £50k new) for around £30k as a 1yr old used car. That depreciation didn't worry me, as I new it was "new car" depreciation. I looked at instead, as a cracking saving of £20k for a "nearly new" car.
The new i4 I now own (£57k new), is depreciating at about the same rate as the 335s did, but I'm not bothered, as, like Dave, I plan to keep it til the wheels fall off after 200k to 300k miles. I'm 54 now, so if I look after it, it may be the last car I ever buy, as I do around 11k miles a year at the moment, but after I retire, that will drop considerably. So keeping it for 20 years is entirely reasonable. OR, I buy a 2nd hand one for £15k in 10 years' time.
EVs will be heavily taxed by 2030
@@mikemars5984 As will any car but ICE somewhat more.
I bought my wife last week a gold chain £800 it’s scrap value £140 … hope she keeps it 😂
You got ripped off then 😅😂😅😂 as plenty of places sell gold by weight ..
Depreciation is not a factor in leasing deals that are in effect for the driver, however it does have an effect on future leasing deals as the leasing company has to factor in depreciation.
If through experience leasing companies have under estimated how much a type of vehicle depreciates, they will ensure that they get it right next time, and probably add some to offset their previous miscalculation.
So for lease deals, depreciation is a factor.
In 2023 the Standard Range Plus Tesla Model 3 in the UK was approximately £44,000, in 2024 it is £39,990. For people who have bought in 2023 that is both a £5K loss on top of their vehicle now depreciating more than it would had the new price remained the same or increased.
For comparison the list price entry level BMW 318i SE petrol in 2023 was £33,555, and in 2024 it is £35,445.
Approximately the Tesla one year depreciation is about 31.8% the BMW, 25.5%.
These figures do not support the argument that is being made.
Depreciation may not have been a factor worth considering looking back, but it is a factor looking forward.
And you, the expert, really believe that leasing companies have got all their figures wrong, have totally underestimated depreciation? Really? You really believe you know more than them?
Totally agree... Legacy Auto think that people will pay more just to have the "badge".... However, people are waking up to the fact that Legacy Auto are over-priced new and are simply not buying them at their high prices.
Are people really falling over themselves for a Peugeot, Vauxhall, or VW badge?
@mikadavies660 yes they are bloody expensive, because of government interference and mandates. Plus buyers of ICE cars are subsidising EVs in many ways.
May be they should sell the car without battery and rent the battery out for a monthly fee....Than the EV would be cheaper to buy than ice and the price of electricity plus monthly fee could equal the petrol price for the ice.
One man’s depreciation is another’s opportunity! If you lease you certainly know where you are but the lease company is a business so if they foresee huge depreciation the monthly payments will be high. However, it’s a bit like paying a premium to fix your energy costs. You pay a premium for peace of mind. Expensive luxury cars always depreciate hard whatever the power train and are either bought by companies writing it off against tax or money bags types where the depreciation is meaningless. Certainly run your car for a long period and the value proposition is better that’s akin to why the majority of people don’t do an iPhone upgrade every year any more
I am astounded about the number of comments pleading poverty and pity for leasing companies and how many experts there are out there who know More about depreciation than the experts
3:19) Dave, your lesson on depreciation risk for the leasing company is bang on. Hertz USA should have listened to you b4 Mark Fields bought 100,000 Teslas😂
The issue was that Hertz bought them during the pandemic when ALL automobile prices were through the roof with ridiculous prices. And since their model is to keep them for 3 years and then sell them, it was a really bad move because the prices of brand new ones were so much lower when the turn to sell them came.
They took a bath on both the Teslas AND the ICE cars they bought during that time of peak, ridiculous prices. But for sensationalism, the media concentrates only on their EV's. Reporting on the ICE cars they lost so much money on doesn't sell headlines.
The other guy who sits at his desk taking the opposite view, showed the comparison of an the same ID Buzz model from 1 month before. 60 month lease with same deposit, before was £22,600, a month later £33,400.
So it obviously do make a difference to both the customer paying an extra £2,000 a year and the leasing company who will probably see less customers!
Fine if you think paying £2,000 extra a year is irrelevant! I know I would never do it.
I was out looking at a new EV 2 weeks ago.
I looked at the e-C4, the e-Astra, and the MG4, all similar sized vehicles.
No matter what the recommended price was, the actual price I could get the three cars for was £25,000 to £26,000.
The price I could see for the petrol equivalents of the C4 and Astra, was similarly £25,000 to £26,000.
They know the correct price, and will sell for the correct price, if you are sensible enough to ask.
p.s. Got the MG4 Trophy, for the same monthly price I paid for a 4 year lease on an e-Corsa 4 years ago.
MG4 good value car, I got one on the 0% finance offer a year ago.
Good choice. Mine is the best car I´ve ever had and it saves me a lot chargibg at home and not having to buy diesel.
@stephen25uk tell me that in 3 yrs. Don't crash by the way. Insurance? Soon the government will tax home chargingvto hell. If you don't think so, you're a fool.
I once had a Ford Scorpio, now that was a lesson in depreciation! Shame because I thought that it was a great car. On the other hand I pulled into the Renault dealership in Gaillac last week for a chat and a coffee and, from the EVs on the forecourt, I couldn't see any excessive depreciation at all.
The only thing that's excessive is the EV misinformation in the press and on the net... mostly written by people who've never actually owned one...
I liked the Ford Scorpio, Ford was king then with Mondeo man, and didn't mind trying to be different, like when it introduced Sierra blancmange mould. People laughed. Not laughing now if you happen to forget about that Cosworth Sierra you left in your outhouse 30 yrs ago 😂
Hi Dave, greetings from Oxford. I agree with your assessment on depreciation on cars, I have no opinion on handbags! If you change your car every 2 to 3 years you will always be experiencing peak depreciation, and you probably have more money than sense.
blunt but accurate, thanks
@@davetakesitonSo I see Labour are going to amend EV mandate.
Sales are predicted to be around ~4% less that the original 22%.
SMMT ceo said "the build them and they will come approach" isn't working, and that the 4+billion worth of incentives and discounts are not enough.
"The fact is, we are building them, but they aren't coming in sufficient numbers to buy"
"We cannot incentivise the market on our own"
I can see the target being lowered to 18%, to give manufacturers a temporary reprieve.
Otherwise, the fine money is just going to Musk (Labours public enemy no.1) or the Chinese lol.
Ultimately, at least in the short / medium term (2-4 years) Labour with it's tenuous position, won't want to rock the boat, and be associated with job loses.
I usually keep cars for 6 years or more so depreciation isn’t high on my list of concerns. However, when I get a valuation for my 4-year old Model 3, the level of depreciation is on a par with my with previous Merc C class.
In 2016 i bought a 2014 nissan leaf for £10K with 14kmiles on it . Drove it for 7 years and sold it for £4600 at 9yrs old. I did the sums and it saved me money as it was reliable , pre-heatable, economical and loved the low speed congested 8mile commutes and running the kids here and there that clogged our last diesels DPF.
Yes, lease company's have to honour their contracts. Like insurance company's, lease companies assess the risk and charge you a bit more to cover themselves. Having lost a lot of money on the first batch of electric cars, they will charge much more in future to recoup thier losses. If tesla drop the price for a new car by 5 grand how will that affect the second hand car market, (leases).
Nevertheless, if the car is worth less at the end of the lease than the leasing company bargained for, then they will make a loss, and the only way to recoup that loss is to make the next wave of lease contracts more expensive. This can result in you not being able to have the car you want because the lease costs have risen substantially, or the brand is too risky for the lease company.
@@brendanpells912 It may well be but only by small amount and this is built into the calculations. Don’t worry about the poor leasing companies they have been doing their jobs long enough to know how to make a profit.
True, but in reality there are so many better EV’s coming out, you can get a better car for less monthly now than you could 3 years ago. I know, I’ve been looking a prices for my new company car in the spring. If you’re just looking at replacing the same car like for like, then yes it will be more expensive for some of them.
Why do people think batteries run out after 2years lo, there not triple a's lol they say batteries will last at least 20 yezrs .so that needs to get out there .
The fear, uncertainty and doubt around EV ownership is spread mercilessly by the popular press. I’m in the UK and I’ve owned a GV60 just over 2 and a half years and was speaking with a friend about them buying an EV but the press around battery fires, battery degradation and depreciation and the new one Electromagnetic fields was so intense even speaking with an owner couldn’t convince them an EV purchase was a sound move.
I bought my EV new with the benefit of a windfall and because 2 and half years ago a 321 mile WLTP EV which could charge at 233kW of this make and model wasn’t available used.
I’d encourage the average person in the street (if considering buying an EV only to do so if considering keeping it for a reasonable long period of time say 5 years minimum.
- so many more models are available now and typically with 8 years battery warranty so the 5 years ownership will have the added benefit of a warranty and the peace of mind that gives.
Some new vehicles - with service, road side assist and OTA updates included for 5 years can make a purchase from new compelling. The Genesis GV60 has this package (5-5-5) combined with low maintenance costs (typical of an EV) and low fuelling costs particularly if you have the ability to home charge can make the 5 year total cost of ownership very attractive. I estimated by GV60 might be with £20,000 in June 2027 - that would be a total cost of ownership for 50,000 miles of just £1 per mile . I can’t get Uber rides or public transport at that cost.
You should have heard 5 live this morning! the debate on electric cars was comical!! Some people really are stuck in the past!
Buying and particularly selling is a nightmare - tyre kickers & timewasters. I just lease now through work on a Salary sacrifice scheme. Includes all maintenance, screen, tyres, breakdown cover and insurance for 4 people. New car every 3 years for a known fixed monthly payment and no headaches.
@mdshovel very lucky for you. And who pays for that. The taxpayer. Soon all that will end and EVs will be heavily taxed including home charging.
@@mikemars5984 thank you for airing your view
I think the problem with Legacy auto makers is, they currently sell an ICE car for £17k, and the engine costs say £3k. So they make an EV version of the same car, but due to their supply chain setup, the battery is say £8k. So they have to account for the extra £5k somewhere, and usually, it gets bounced onto the customer, making a £17k car cost £22k.
Really? So how come a Tesla Model 3 performance is cheaper than a BMW M3?
@ because Teslas are built as an EV from the ground up, with ground-breaking innovations. The legacy autos have, until recently, been an ICE/BEV mixed platform, with a supply chain that is lacking compared to Tesla’s. As a result, they pass the high cost of their batteries onto the customer. Tesla makes their own tech, rather than buying it in from other manufacturers. Im just as disappointed as you Dave, that legacy EVs are more expensive than the equivalent ICE. And, the BMW M3, is artificially high, just like the Taycan. Trying to appeal to the “more money than sense” brigade.
Lease prices are set on the difference between the price the lease company buy the car for and what they expect to sell it for. Over the years with ICE cars, the premium German brands like Merc, BMW, Audi were always cheap to lease (relative to their price) because depreciation was low.
The problem now is depreciation is bad across all cars and yes the same applies for some EV’s (not all). This didn’t matter that much while we had very low interest rates (and the leasing companies got massive discounts on the cars). However, now interest rates are higher, depreciation is higher and the economy isn’t in good nick, makers are falling over themselves to try and sell cars and have put list prices up to levels where private buyers aren’t interested.
There’s going to be several years of huge problems in the industry and of course the press are jumping on this and saying it’s all due to EV’s. It’s not - the whole industry is in oversupply and there’s going to have to be a major contraction in car production and the pain that that will begin to factories and suppliers.
You all go on about cheap charging but spend £14 on coffee and a sandwich while waiting and charging
Years ago BMW said the costs of the EV's in their range were £15k more, but you would recoup that premium in fuel savings. All nonsense selling prices are defined by the market.
Got a second hand BMW Ix 40 at 1 and 1/2 years old from auction. The equivalent BMW x5 with similar performance was almost identical in cost. The Ix had cost significantly more to start with. Once the EV hits the regular punters the crazy depreciation stops and regular car depreciation continues.
I bought a car NEW and kept it for FIVE years (roughly, usually a little more) and then traded it. Why? 5-year, 100,000-km warranty. Kia's 5-5-5 warranty. I bought several NEW Kias (between me and my wife) simply BECAUSE of that specific warranty (and a very, VERY good service manager). And for about 15 years I had not "angst" with my cars, I always had roadside assistance (5-5-5) and no major expenses and a predictable monthly cost.
Depreciation? That was what rich people pay on their Mercedes and BMWs, or stupid people pay on their Chargers etc. Toyotas were more reliable, but a VERY good service department and 5-5-5 meant I NEVER worried. And to be honest, the Kias NEVER let me down, either.
Depreciation is - in our society - a tax on stupidity. Smart people behave as Dave describes, and don't do stupid things - like BUYING a new car every 2 or 3 years. If you REALLY want to do that - LEASE.
I agree leasing is the way forward, my Ora is now 14 months old and I paid £2200 deposit and payments of £247 over 24 months, making a total of £8128, the same car is now £8787 deposit and 24 months at £732 making a total of £26361 over 2 years, the list price of the car is £32500, so the lease company have learned their lesson, some cars depreciate more than others
Great video Dave, I believe some depreciation was bigger amongst the cars that were well overpriced to start with. Many of the Stellantis group cars come to mind. Obviously Tesla dropping the prices of it's new cars was also affecting their older cars prices.
PCP is a good protection against as you have the option to buy or hand back. Lease obviously protects you and all you have to be is happy with the amount you are paying each month.
The only car I have had on PCP had such a restricted mileage allowance it was for me useless.
You do pick the mileage you want.
@@paulbuckingham15 That affected the monthly price to make it uneconomic for me. I simply ignored the mileage restricition and went for a trade in at the end of the agreement.It actually worked to my advantage.
Bang on!
It seems to me that the people who concern themselves with depreciation....are the people who can't afford to buy it in the first place....so "wow look at the depreciation" is their excuse for not buying it.
Friends of mine spend tens of thousands each year in "depreciation" but are conveniently blinkered to it....first one follows his beloved football team around the globe and doesnt bat an eyelid to paying £500+ for a ticket to watch grown men run up and down trying to get a ball to kick into a net...depreciation=100%
2nd mate similarly globe trots several times a year to have a leasurely stroll in the meadows with a stick, trying to knock a small white ball into a hole several hundred yards away, then picks it out and then crazily does the same again...18 times😂...Bonkers! his depreciation is....exactly the same...100%
3rd mate and his wife...eagerly spends thousands every year sitting on a boat staring at the sea for hours on end, sometimes being seasick, several cruises a year they do ...their depreciation is....yep, exactly the same....100%
Yet bizarrely none ever mention depreciation or express any concern about how much money they have spent (lost)!
Mate 4. Him and his wife have spent in excess of £60k in the last year renewing their kitchen units and bathroom suite, didnt bat an eyelid...
YET...
Mention cars to them and suddenly they seem overly concerned and stressed with "depreciation" 🤣😂🤣
So....£10k depreciation on a car over 3 years looks to me to be an absolute bargain!
This "depreciation " and of course, in the case of solar panels, storage batteries, EV chargers, heatpumps etc...the old chestnut of "ah yes, but how long will it take to get your money back" mentality is truly hilariously baffling 😂
Talking of the "Value" of things, handbags included, is ultimately what someone is willing to pay for it...msrp is simply a ruse by manufacturers to big-up their product to attract those who "perceive" quality is judged by the price.
So...car x with a msrp of say £50k new is now being offered at a 25% discount...or perceived depreciatikn of 25%...NO!
Depreciation DOES NOT EXIST UNTIL YOU SELL THE ASSET!....Depreciation can only be calculated WHEN the car is sold.. calculated upon the difference between the price you realised from the sale deducted from the price you actually PAID for it....NOT its manufacturers or dealers list price which is irrelevant.
I personally, and my mates mentioned above dont even consider depreciation... if we see something we like we like, and can afford it, we buy it and enjoy owning it, if chance you get something back when you have finished with it, then thats a bonus...so, with the above scenario.....that'll be me then.....the one daft enough to buy a depreciating car 😂
I'm sorry Dave but your comment regarding depreciation being irrelevant if you lease an ev is just nonsense. The lease company will be taking a massive hit when the vehicle goes back and therefore cheap lease deals are unsustainable. Equally through enormous discounts manufacturers are crucified themselves trying to meet government regulations. The fact is that most people will not buy an ev at the moment. Just ask the people of Luton what they think😊
I can get a brand new budget EV for £150 per month, or a brand new Tesla for £299. I don't care a single jot how much it depreciates, not my problem. 10% or 90% not my concern. Don't even think about it and certainly don't waste a single second wondering if leasing companies have got their sums wrong. Once again, not my problem, not a single jot.
Good for you...let's see how you feel when you reach the end of your lease and the cost of an equivalent new vehicle has doubled. Enjoy your car.
@@daveyjack1959 they only crucified themselves because they didn’t smell the coffee grains early enough and are building compliance cars. They’re just not geared up to make enough cars efficiently as they need to in order to make a profit and sell them at a competitive price. If these cars are too expensive relative to the ICE equivalent of course most people won’t select the EV option particularly at the lower end of the market. The much hotter secondhand market for used EVs pays testament to new car price being the key barrier to entry. Things are changing though but it will take time.
OK then let's carry on as we are and lose all manufacturing jobs in the UK...Happy days
It does make a difference. The leasing companies take depreciation into account when you lease your car. They are not stupid. The price per month is more than a car that depreciates less,
BEVs don't depreciate faster than I.C.E vehicles ? The statistics say otherwise.
The stats are based on list prices which few people actually pay
Statistics or what the bloke down the pub told you? The second hand market is very volatile for expensive stuff like cars because nobody has any money. Supply and demand.
The stats are manipulated (cherry-picked) by mainstream media, particularly in the US, to support a particular narrative (that the media are well-paid to support). Part of the cost of freedom is learning how to see when you are being manipulated and by who; sadly this will be the downfall of what used to be the greatest country on earth.
Ha ha😂
statistics that support and con buyers into net zero.
One thing that skews this figure is the purchase incentives. In my area you can get 10 grand off of an EV, an much of the US you get 7500 off.
This means in order to sell it later the difference between MSRP of the original and what you can sell it for is much larger but you didn't actually lose that money because you received the rebate. So the depreciation figure will look like that 60K EV is now only 30K after 5 years looks on paper like 50% depreciation but the original owner only lost 50k to 30k or 20k, which is actually only 40% which is right about the average 5 year depteciation of vehicles (iseecars analysis showed average of all vehicle at 38.8%).
Your point about phones or TVs isn't just the value of the item it's just that the average person keeps a car for about 5 years and they last about 15 on average so it's very much expected that if you are buying it new you will likeley sell it. That is not generally the expectation with a phone or TV but only randomly happens so whybtrack it if it isn't the normal expected behavior.
So ICE car legacy make an EV , know they will lose hundreds on servicing perks (oil, filters, brake pads), the directors also know , with their oil production mates that they’ll lose £4000 worth of fuel over 4 year pcp, and that a buyer will save on tax…. So they add these costs onto the EV…. I hope they go bust
trouble is, if they all go bust , we might be left with musk and the chinese....
Another excellent video Dave.Thank you.👍👍
Thanks you have inspired me spot on in the later part the used evs maybe are overpriced to start . C4 grand picasso had one super comfy loads of space . Poor gearbox . 200k wow . I bought a c4gp for 1k kept for 1 year sold for 1k. Lucky me . Deprecation doesnt matter until it does . Best avoided .5 years old 50k is my rule .now at least 50% of its new price .
Vauxhall have been a serial overpricer/discounter.
Wifes current car is a fancy 2017 Corsa SRi... List £15k and change, we paid £9K and some, pre-reg with 50 miles, still good and does 3-4k miles a year.
Mine a 2020 MG ZS ev Exclusive bought in the first tranche with Gov Grant and MG matching, to get £21k price. 5 years on its worth about £12k as low mileage, so depreciation of £9k , depreciation cost of £150 a month, less than most lease deals, and I'm keeping it.
Vauxhall (and the rest of Stellantis) are the worst for this in the industry. They produce a raft of indentikit EV’s in the £30k to £40k range, all with the same underpinnings and all ludicrously over-priced a list price. Then they hawk them around leasing companies are huge discounts (20% or more). The odd person gets caught buying near list - I feel really sorry that they’ve been duped.
Of course, these are then the worst depreciators, often only worth £15k to £20k within 6 months, when people don’t realise they were sold new at £25k to £30k anyway.
It’s a gift to the anti-EV press who can claim ‘massive depreciation’, where it’s Stellantis who caused the problem in the first place.
To those worried about depreciation on an EV , all I have to say is ...don't buy any new car because massive early depreciation is normal and just less to worry about. The old nugget about losing value when you drive it off the lot ain't just joking so if you choose to buy a new car just ignore the depreciation because you knew it would happen from the get. Better yet , buy last year's model and negotiate a discounted price , then keep the car for many years until the maintenance costs start to rise and then sell it for the going rate.
Yes I got ripped off and so does everybody who buys new from a Jewellery shop . That was my point if you buy new you get ripped off . Never seen a jewellery shop selling new by the weight unless it’s second hand or stolen clever clogs…
I think Depreciation is important, it may be your problem for leashing or pcp, if these company lose too much they might put up the rates for the next car you going in to lease, so you might need to find more money. Plus for me a low earner who buy his car, my cars have been Honda and they have always held there value and it’s really helped me buy my next car. If I was to lose too much then it would really effect what I could afford. So it does matter. But I think ev are slightly overpriced which is why they fell so much.
Tesla lease 9 months down and £250 per month? At least be realistic with your examples.
EV depreciation is not only real but it's massive, much more than household and domestic items.
Your theory would kill the car market as no one would buy new, meaning there wouldn't be any used cars for sale.
Also I don't think these EVs were overpriced, I think they had to price them where they did to recoup the massive R&D costs.
But when placed at the side of one of their ICE equivalents it's made them look much more expensive.
Again hence why new EV sales are so poor.
Every lease car at the end of its lease, becomes a second hand car for sale!
Absolutely.
And it's lease companies that are making up 90% of UK EV sales. Joe public aren't buying them in anywhere near the numbers needed for the 2035 cut off date.
the more they cost the more they fall as seen with the I pace and tycan
his point was it's the leasing company's problem the price was irrelevant
@@ami3214 the car companies are going broke !
Maybe you could do a video entitled: "HIGH EV INSURANCE - IT'S NOT WHAT YOU THINK!
Mine this year was £450 for an IX 40 down from 550 last year and the same for when I had a BMW 520d two years earlier. Again another scare story from the ICE luddites.
Still love ya channel Dave but, And yet the model 3 was supposed to be a $30000 vehicle. That's £23672 in today's money. There is of course import charges but that in no way brings the price of a model 3 up to £39000.
Like others on here I’ve never bought a car with any thought of depreciation. The people making this point on UA-cam all seem to be car dealers or similar people in the motor trade (who presumably care a lot about depreciation). That said what about pcp deals: isn’t depreciation relevant there if you are eventually looking to buy the car outright. I’ve never done this so I don’t know but I assume the deal is based on the value of the car when you enter into the contract and possibly factoring in on some dealer assumed depreciation. If the depreciation is much greater than the contract allows for isn’t that a problem in that your monthly payments and final payment might be out of promotion to the value of the car.
So do you want a Mercedes C class, or a Tesla, I'll choose the one with a hundred years experience in vehicle manufacturing, but as they say beauty is in the eye of the beholder 😊.
I would choose the Mercedes CLA EV over the Tesla!
@@rogermartinez78 Haha, good one.
Designer " outlets" sell special cheap "outlet"versions, and some discontinued lines.
In the end you get what you pay for so they say, designer goods have a premium because they are built better, and have spent the money to design, build, and test the product. Copies obviously are not made to the same standard , and with inferior build , and cheaper quality raw materials, and haven't invested in R&D, and don't adhere to environmental, and good employee standards. Can some of these aspects be said about vehicle manufacturers? Well that's up to the purchaser to decide.
My L/R Discovery cost me £17k new, lasted 19 years and 140k miles and sold for £500. Depreciation at just over 12 pence per mile.. Now 35 years on My EV cost £33k has currently 95K miles on the clock and is on course for 140k miles also. Depreciation will be around 24 pence per mile. Taking into account wage inflation the EV will be a cheaper deal.
Depreciation isnt new , in 1993 i bought a 3yr old 36k mile Astra GTE16V for £5k when it was £16k new. It varies a lot though depending on many factors.
Amazing car the 16v GTE, my neighbor had one and my mum had an xr3i and they would argue (jokingly) about who was better.
I liked the dash on the gte but the overall interior was better on the MK3 xr3i. The gte a little quicker.
The funny thing is today them og hot hatches are slower than almost all new cars today, and handel worse too.
I did own a 2016 2l diesel GTC, that was one of the best handling normal cars I've driven, it's only downside was it's width. As wide as a rangerover, and its tyres were very expensive.
Only car I've ever owned where having more than half a tank of fuel in it, upset it's balance. Brilliant longer range car, drive it to Spain a few times.
I had a white GTE 16v , 140mph car . Sold it and bought a red 924 Porsche .
Hot hatches lost value extremely quickly in the early 90s because of high theft rates and massive insurance premiums. Demand was on the floor. Same now with EVs. People don't want them because they're nowhere near as usable as petrol or diesel cars.
The why are petrol and diesel sales dropping through the floor. Diesels in decline for over 10 years and every month this year. Petrol in decline for three out of the last four years, and seven out of the last ten months this year.
Yet BEVs have increased year on year and month over month in the same timeframes.
@@GruffSillyGoat Actually, it's the other way around. Watch Barrie Crampton's videos on sales figures. Unlike Dave, Barrie shows you the evidence. EVs aren't selling. They're just being pre-registered.
Pretty much only significantly affects the 3 year from new car owners who swap like clockwork.
It's the lease companies who are losing their ass.
That money has to come from somewhere.
Naive opinion in some regards
The lease argument is the same as saying a car is like a mobile phone? I am currently on my wife's 2nd handme down phone....which I will keep till the battery dies ! They all lose their charge in the end. The lease company's get money from banks, and in the end, it's all going to "subprime." The car loan industry and end in us bailing them out, then massive inflation ...and on .. and on it goes....2nd biggest purchase we make and it's now beyond working people to afford.....
Time will tell how long these batteries last, at the moment it feels like a significant risk, someone will get caught holding the bag and lose all value left in the vehicle.
@@martinmcg7980 We know how long batteries are likely to last from EVs that have mega mileage on their clocks, to BYD now giving lifetime guarantees, to a minimum of 8 years offered by other manufacturers and don't forget batteries rarely "break" they lose range over time.
Time already tells us. Search Tesla battery degradation and the stats show an average of 12-15% loss of capacity after 200,000 miles. And the newer LFP chemistry batteries will last a lot longer.
The jury's already in on this point, the simple answer is they now last for the lifetime of the car, or indeed longer than the car with a fair number of EV batteries now finding use in 2nd life roles within battery storage farms.
@GruffSillyGoat Not to mention powering European football super-stadiums.
They will last for most cars longer than the rest of the car. The problem is there will always be cases where this doesn’t happen and the press bump all over it and say ‘look EV batteries fail;. It’s the same as ICE cars, there have always been lemons and always will be.
As I always say, cars find their real value in the used market
If the electric care depreciate so much how comes when I was looking I didn’t see it . Most of them depreciated no more than petroleum cars . The truth is nobody wants to buy a second hand car anymore with cash so you have to trade in and all the dealers offer you the same money for your car . You can’t find a second hand car unless you go to a dealer and I don’t see them selling them off cheap . Depreciation my a backside ….
Well I'd have to disagree with the leasing. Your Leases will factor in the cost of the car after the lease. If they expect the value of the car to be low your lease deal will cost you more. So technically you are paying for it.
If you watched the video, you would have heard him say exactly that 😊
Did you watch a different video to me ? He said that in the video.
@@ziggarillo Oh I must have missed that. Well in that case he just contradicted himself. I was commenting live. I had not watched the full vid.
If you know exactly how much you will have to pay each month, and you can afford it and are happy to do so, where's the problem? That price is fixed regardless of depreciation.
@@Hell-Hound1 Exactly. The big advantage of leasing is that you don't get hit with all of the depreciation at the end of the lease. And as you say Hell-Hound, if the leasing payments are agreeable to you, then there is no issue. Quite why these people who shout from the hill tops about EV depreciation do so when they've no intention of ever owning one, I have no idea....
Excellent
You can cherry pick examples to 'prove' just about anything. Example; A Ford Escort Cosworth would have cost you circa £20k in 1992. A 2000 mile example has just sold at auction for around £180k.
A couple of months ago, a brand new Volvo EX30 EV would have cost you circa £40k to £50k depending on spec. However, Volvo are now advertising pre-registered examples with delivery miles for £35k. Engage in a bit of haggling, and you can get one for £25k. So Volvo have taken £15k to £25k worth of value out of your new car right off the bat. That's going to hurt, but it gets worse. As a 2 months old used car with 2000 miles on it, it will be worth considerably less than that pre-registered example for £25k. I doubt a dealer would give you more than 10 grand for it as a part exchange. That's around £30k to £40k in depreciation over 2 months!
Using Dave's logic, and by cherry picking two extreme examples, I could argue that buying a petrol car will make you £160k, and buying an EV will lose you at least £30k in just a couple of months. But it's not that simple. Every car retains or loses value at different rates. Do as much research as you can, and listen to both sides of the argument. Dave is pedalling an agenda. He does not have your best interests at heart. Listen to Barrie Crampton (a car dealer who actually knows what he's talking about), and you get an entirely different picture.
Although I am not going to disagree with you regarding depreciation and we agree EVs are depreciating faster than dirty cars (at the moment... that will change), then it must flow through to lease costs given the leasing company is aware (has predicted) what the car will be worth after being handed back. Countering that is any subsidies and net cost impact (e.g. low/no BIK). So... do the homework, compare costs, make a decision and then forget about depreciation, as you suggest.
i don't think you are correct about depreciation. I just bought a 71 reg 3 year old 24,000 mile Zoe R135 GT-Line I believe it cost well over £32,000 new. Despite not being very old, low mileage and still having 2 years manufacturers warranty and 5 years remaining battery warranty I bought it from a garage for £10,500 that is close to a 70% depreciation. In comparison I have a Hyundai Tucson which cost new about £31,000, it is almost 6 years old and done 45,000 miles. So almost twice the age and twice the mileage of the Zoe. Yet I have had 2 firm offers from garages of £15,500 for it. Both cars almost the same new price. ICE car twice the age and mileage and yet still retains considerably more value than the Zoe. I of course am REALLY pleased with my little Zoe, I think i got a total bargain. Basically buy EV's 2nd hand. I also believe company car drivers get excellent tax deals with EV's but don't know much about that
If you'd maintained your Citroen Dave, it would have lasted much longer, and retained more value. A Citroen diesel engine will do 400k miles and more if you look after it.
Don't talk bollocks you idiot!
As an old reliable nokia phone owner, If you can't pay for parking with your very expensive phone with an app because of intermittent hi fi reception around gb would you want a cash slot on electric chargers?
No, what a stupid idea
The big question is why are EVs still priced higher than their ICE counterparts? We know EV batteries have dropped massively in cost over the last decade, and the electric motor ought to be cheaper to build than an ICE engine with all its complications.
Everything else is, or can be, the same in both types of vehicle. Use the same fuel door for the EV charger, but have it wired to the battery instead of feeding into a fuel tank. We don't need a different grille for the EV, just use the same external look, but block it off inside. It's only the powertrain that needs to be different.
Are the manufacturers assuming they'll sell fewer of them, so they jack up the price to get a profit? If you plan to sell 100,000 of a model, the first 20-30,000 will be manufactured at a loss, but the rest will make back the profit. If you assume you'll only sell 30,000, then each one has to be priced higher more a profit.
Not all of them are. A new MG4 is £27k, a new petrol Ford Focus is £28k. There are also other examples of new EV's priced similarly to equivalent ICE cars
@@Brian-om2hh That's good to know, we need price parity.
The MG4 looks like a really nice EV, but it's a Chinese car so it won't be price parity in the USA under Trump. Ford decided to shun the traditional small car buyer in the USA, so the Ford Focus is a currently a thing we can't have on this side of the pond.
Our selection of affordable EVs is a lot smaller than you get in the UK, and with the incoming administration being in the pocket of big oil, I don't see that changing soon.
Fortunately I already have my small EV (Chevrolet Bolt), and won't need another for quite a while.
The simple answer is that automakers are making EV versions of bigger and bigger trucks and SUVs requiring bigger and bigger batteries to power them, while also offering bigger and bigger ranges for their entire lineup. Of course, more battery capacity is great, but it does mean that even if the cost per kWh to make an EV battery is going down, that the total cost of the EV battery pack may not actually be getting cheaper, at least not at the same rate.
The good news is that not all EVs are average EVs and, at the end of the day, you only care about the economics of the particular car you own, not every other car out there with the same drivetrain. If you stick to a smaller car with 200-300 miles of range (rather than 400-500 miles of range) the EV should cost similar to the ICE version, which will help keep depreciation in check.
Another factor going on is that a much larger proportion of EVs made are luxury vehicles compared to ICE, and luxury vehicles cost more for reasons that have nothing to do with batteries or electric drive train and everything to do with soundproof walls or leather seats, which would be exactly the same in a luxury ICE vehicle.
The handbag probably had wonky stitching or scuffed leather.
...and panel gaps
So let's believe that you are a competent driver, after 180,000 miles, suddenly, your clutch and head gasket went at the same time. Any honest local garage near Preston would drop the engine send the head off to be skimmed (same day or next day if they where busy), new clutch, timing belt, water pump and tensioner for around a grand. Maybe you might need a new battery, exhaust, brakes, rubber bushes and tyres for 500 quid, to pass an mot. Could you explain, (as a competent driver), what were the other 3 and a half to four and a half thousand pounds worth of faults with your car that you hadn't noticed? How much would it cost to replace a battery in any electric car, plus tyres brakes suspension rubbers etc
Boy are you out of touch with dealer prices: My local Renault dealer charged me £1,200 for a head gasket on a Laguna over 8 years ago. Quotes for a replacement double clutch 6 years ago on my Citroen C4 Grande Picasso were over £1,500. That's nearly 3 grand just there. And £500 for battery, exhaust, brakes and tyres. What planet do you live on? Tyres are £100 each, as is a new battery. As for exhausts you are crazy, so far off the mark that I can't be bothered to
Dave, car manufacturers don't pluck car prices out of the air, l am sure they add up what its cost them to produce then add the profit on top. It's still more expensive to build the electric ev fiat 500 than the petrol one, and most people would prefer the petrol one anyway. Fiat cannot possibly compete with China which has bought up most of the mineral rights for battery production around the world, and have manufacturing on a huge scale paying minimum regards to employment, and environmental concerns along the way no doubt.
In the UK fossil-fuel car sales have been dropping for years, nearly 10 for Diesel and 5 years for Petrol. With the new EV market the 'legacy' automakers attempted to market them as premium vehicles within their range to maximise sales profits no longer being seen on their fossil-fuel lines. However, the pure-play EVs, Chinese and Korean manufacturers pulled the rug out on this game by reducing prices or offering more compelling products, leaving the older automakers with high R&D and production costs for very little gain as the got the market timing wrong.
@@GruffSillyGoatYou're not concerned that China can afford to flood our markets with cheap EV's until EU manufacturing collapses leaving them to take control of the car market. Because the Chinese are a open , democratic society that doesn't want to invade Taiwan, and dominate the world by controlling the supply to all the goods we require. China has systematically gone around the world buying up all the resources in the third world countries in return for infrastructure in these countries, and by doing so hold strong influence over these countries. No l am sure the Chinese are doing this all altruistically.
The main reason EV’s are more expensive now isn’t really the cost of the battery or materials, it’s the fact that volumes are still small so the massive development costs of getting a car to production are being shared across a lower number of vehicles.
It’s a Chicken and Egg problem - we need to volumes to lower prices but because prices are so high, volumes are low!
@@ISuperTed - indeed, but that's a symptom of commitment and timing issues, some automakers invested in EV production lines alongside their ICE lines to offer EVs at similar prices to equivalent ICEVs.
Whilst others choose to wait and go the more expensive toe in the water approach of using old factories within their portfolio, not adapted for efficient EV production with some choosing to hand build as well.
Those who comitted produced EVs at lower cost resulting in lower car prices, the others offered high spec models at premium prices that were not as price / cost competitve.
Has he ever been in the big name London fashion stores, where they do sell at full price?
And they will be for maybe 6 months, but it's fashion and the big reductions always come with things like hand bags.
Is he saying EV's are a fashion item?
That would explain the huge price drops of course, but we all know that transport is barely a fashion!
Seems a desperate clutch at straws to feed us with a bad narrative yet again!
Not really true about comparing a model 3 to a BMW you quote.
Just had a look on AutoTrader. Most 2 yr old model 3's were around £24k to £25k, only a couple were near £27k and they were the long range models! I picked around 20k miles cars.
So not the general £28k you were saying!!
I know you need long videos to help monetise them, but 30 mins rabbitting on about one topic is too long, I bailed out half way through. Otherwise keep up the good work.
Does anyone know the real costs for manufacturing an equivalent ev v ice. That will tell us a lot.
Well, they were saying 5 years ago that the break even point on EVs was when batteries dropped under $100 per kWh.
A quick google finds they are currently circa $110 per kWh according to goldman sachs and expected to drop to under $100 per kWh in the new year.
Reuters were reporting LFP cells at as low as $59 per kWh at the end of last month, with NMC cells at $68 (assembled pack costs will of course be higher).
@@EwanV Thank you.
That’s actually still very difficult to do, as EV volumes are not high enough to get a comparison (yet). If a car costs £500 million to design, build etc. into volume production, you need to divide that £500 million across how many cars you’re selling to say how much ‘per vehicle’ it costs (plus obviously the actual build cost with the metal, labour etc.).
If you’re selling 10% of the volumes of EV’s compared to ICE, that development cost is very high per vehicle, so you’re not comparing like with like. It’s going to be at least another 5 years before there’s enough EV production to make a valid comparison.
@@ISuperTed Appreciate your reply.
Dave , how many people run a car until finished, if you can afford a new car and have the money to do so you're more likely to want to move it on after three years or so if you're still earning enough money to do so. So it does affect 90% of purchaseees l would say. So the question to most is how much am l going to loose, and currently like it or not EV's are depreciation significantly greater than ICE , and will continue to do so as our government dictates to us we must have EV's despite the majority of people not wanting them . ICE values are only going one way and that's up, l recently sold an 12 year old ka, and couldn't believe how much l got offered. I'd valued it six months earlier at the same showroom, but decided against it. I came back to six months later with the same car ,same showroom and got offered a £100 more.
Dave, who's never worked in the car industry. You will be paying more for the lease per month. You don't seem to understand the NEXT car you buy will cost more. Tell me honesty would you or anyone buy a second hand battery. Have you EVER bought a second hand battery. The government earns 28 billion from taxing ICE cars, do you seriously think when most people have electric cars you won't be taxed to hell. All those subsidies will end. It's easy to track electric cars, that's the idea. Clueless Dave strikes again, comparing iphones to EVs. Sad that people are patrions.
Depreciation for any car lease companies is a matter of calculated guesswork on something new, trends in purchasing habits or simply bad news eg diesel gate. They have to adapt and this is nothing new to them. As for second hand batteries it is a red hearing brought on by the MacMaster's of you tube. My batteries have 7+ year warranties not a poxy 3 year warranty for many ICE engines. "It's easy to track electric cars" just like most newer cars, so your conspiracy theories are the same for both. Please do some proper research.
@gerryparker7699 I should read your warranty carefully. Again have you ever bought a second hand battery.
Really strange comment because all my regular viewers know that I did spend 10 years in the car industry ending as sales manager in a Citroen main dealership, I did buy a second hand EV, it was 4 years old when I bought it and still have it, no it hasn't failed or caught fire, it is running beautifully, it will last many more years, I do travel a higher than average milage and would never ever go back to ICE. Also please list all the subsidies EVs get. Why do you have to make up your "facts"? Just what are you trying to prove? And why?
And how will you sell an EV with leasing???
Same way you sell all the ICE cars with leasing. 70% of all new car sales are now lease/PCP.
@ISuperTed economics 101 leasing companies make some money on the lease but the bulk of profit is made on the second hand sale after the 3 years hence the milage limits. So if your main profits are now gone your business model is knackered.
Leasing companies seem to be thriving. Maybe they are pretty good at what they do and make a pretty profit on their core business. Maybe you the obvious self appointed expert need to Google the finances of a leasing company. The one I just Googled is 20 years old, very profitable and growing substantially. Or maybe you know better.
If you want accurate information about EV depreciation, check out Barrie Crampton's excellent videos on the subject. Ignore Dave, he's talking the usual rubbish.
So he who has leased, has most !. I don't know where this 'change your car every 2/3 years came from. When we had horses we kept them until they died so where did this need to change come from ?. My Tesla changes every month via a software download so I guess I have the equivalent of a new car 12 times a year !. I used to swap phones every year now I'm keeping it until it falls apart ditto the car, I expect to be driving this one for at least 10 years unless like you something compelling comes along like a robot taxi then we will probably sell our car and download the 24/7 car app. P.S. We were at IKEA Sheffield yesterday, there's a bunch of Tesla chargers next door in a little retail park, price per kilowatt ? 39 pence !!
That’s a good price then, given that it’s around 10p per mile. That’s what the best diesels do.
How sustainable is leasing when the depreciation means the leasing companies are losing money hand over fist
In a few years time evs will be so cheap too buy brand new we will be buying them to just throw away when finished with it
justifying your mistake😂😂😂
Sad troll