Chevrolet Spark EV, as seen at the Seoul Motor Show 2013 (Chung Sung-Jun/Getty Images)
(USA TODAY) -- Plug-in electric cars may be cutting-edge technology, but an analysis
suggests that most will depreciate more dramatically over five years
than their conventional counterparts.
Some of the biggest value
gaps involve 2014 models powered only by batteries, entirely without gas
engines, according to the analysis performed by Kelley Blue Book at the
request of USA TODAY. Examples:
•Chevrolet Spark EV. The
little electric is projected to be worth 28% of its $28,305 list price
in five years, while a comparable conventional version of the same car
will retain 40% of its value.
•Ford Focus Electric. The
compact will be worth 20% of its initial $35,995 list price, while a
well-outfitted conventional Focus Titanium with an automatic
transmission will still command 36%.
•Nissan Leaf. Even the
best-selling pure electric car is projected at having a residual value
of 15% for the 2013 model. A similar Nissan Sentra SL compact would
"Pure electrics have been slow to catch on in the
resale market," says Eric Ibara, director of residual consulting for
Kelley Blue Book. Customers "have been willing to buy a new one, not a
used electric vehicle."
Indeed, three electric cars - Leaf, Fiat
500e and Smart Fortwo electric - topped the list of models projected by
KBB to have the highest depreciation among all cars and trucks for the
2014 model year.
Tackling concerns about depreciation, Tesla
Motors CEO Elon Musk announced in May that he would personally back the
resale value of its Model S all-electric sedan for buyers who use
Tesla's finance program. Tesla said that under the deal, resale value
will be higher than BMW, Mercedes-Benz, Lexus or Jaguar.
As bad as
that sounds, there are some mitigating factors. In particular, many
buyers are given sales incentives packages and don't pay anywhere near
the list price. Some of the biggest discounts come on leases. And many
electric cars qualify for a federal tax credit of up to $7,500, plus
state or local incentives. Big discounts on news cars hurt residual
Plug-in hybrid cars, those with backup gas engines, fair
better, KBB reports. For instance, Porsche's new Panamera E-Hybrid has a
predicted resale value of 37%, compared with 41% for the conventional
model. Toyota's Plug-In Prius has a resale of 35%, only 2 percentage
points less than for the conventional version.
note the electric car, or EV, revolution is still in its infancy. The
market for used electric cars is yet to develop.
"We expect to see
a similar adoption curve for used EVs as we have for new EVs, and we
are just now reaching the point where there are used EVs on the market,"
says Erik Gottfried, director of marketing for Nissan Leaf. "EVs are
one of the most active and fast-moving segments of the automotive
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