But this devaluation isn't something reserved only for Audi or Porsche. The BMW iX, an eSUV that owners like and most of the media struggled to find something wrong or unpleasant about (except for the beaver-tooth grille), has been in a similar situation for quite some time.
Rivian is another good example. Quad-motor R1T Launch Edition pickup trucks with 20,000 to 40,000 miles on the clock are selling in the low 60s at the time of writing. In 2022, when both the new and used car markets were chaotic, an R1T used to sell for around $150,000. Now, that's quite the discrepancy!
But it's not the battery-electric cars' fault. The EV market is maturing, and that means a couple of changes are on the horizon. For example, most automakers in North America are getting ready to switch from the CCS Combo 1 connector to Tesla's charging port, known as the North American Charging Standard (NACS).
Not just one reasonThen, there's the issue of reliable fast charging. Different battery architectures and stall designs often leave EV owners confused and disheartened when they can't take full advantage of those maximum charging rates. Granted, that's a common issue for non-Tesla EV drivers, but it's still a problem that needs to be addressed before zero-emission cars become the majority on our roads.
Last year, EV sales increased by 50% in the US. A little over 1.2 million battery-electric vehicles and around 200,000 plug-in hybrids were added to American roads.
Currently, around four million EVs are in use, according to the Department of Energy. These green cars share 170,000 Level 2 and Level 3 chargers. Given the reliability issues we mentioned prior, there might be even fewer that actually work. Besides that, don't forget that some people are going around cutting dispenser cables. Fortunately, around 900 new pedestals are erected each week, per the Department of Energy.
Another major issue that stops EVs from becoming mainstream faster is insurance. Providers figured out quickly that repairing these zero-emission cars can often be more expensive than totaling them. That's bad for two reasons: you might end up paying a higher premium, and the green promise of rides without an exhaust system starts to pale.
A couple of more faultsBesides all the above, battery technology is advancing. Today, we have multiple chemistries in use. We might even see the solid-state energy storage units in action in a few years. But until then, sodium-ion batteries might help bring truly affordable EVs to the market. It's a constant battle for trimming costs and increasing profit margins.
In a way, EVs seem to be a lot like smartphones. All it takes is a few years to see your $1,000 device become almost worthless.
However, you don't have to trust our assessment blindly. The Manheim Market Report (MMR) recently revealed that EV prices dropped the most in the last 12 months: 16.4 percent. That's 7.4 percent more depreciation than what luxury cars experienced and 7.1 percent over the decline of all non-EVs.
The same source also revealed that compact and midsize cars are on their deathbed in the US. They keep losing their value at an accelerated rate, while pickup trucks, SUVs, and CUVs are not devaluing as much. That proves Ford was right about cutting its losses early by only keeping the Mustang in its cars portfolio.
The bright sideHowever, these price changes are good news for both buyers and sellers. Cox Automotive says that used-car sales increased by 5% in January 2024 compared to December 2023. The used retail days' supply also went down from 58 to 53 days in the same period.
The Manheim Used Vehicle Value Index showed that price declines continued but didn't affect the general picture. The first month of 2024 started shy, but sales activity picked up steam in the second half. Analysts expect February to help dealerships increase their revenue because the tax returns have already started hitting Americans' bank accounts.
The positive change happened mostly thanks to sales into rental, commercial, and government fleets. The estimated retail seasonally adjusted annual rate was 12.3 million. That's only 100,000 lower than last year.
Considering the current trend, experts bank on used car prices to stabilize. The discounts may stop happening naturally for a while, at least when it comes to popular models or lovable brands. If you're planning on getting a new ride, you may want to wait February out and prepare to score a good deal in March. Or, you could try to negotiate better if you need a car now.
Overall, the good news is that most vehicles are finally seen as liabilities and not investments again. Americans in need of a set of wheels might find it easier to get their hands on something that makes them happy, not just satisfied about owning another commuting appliance that brings them not even a little joy. You might just buy that cool Porsche to go to work.