How Much Do Electic Vehicles Depreciate?
How Much Do Electric Vehicles Depreciate? (By Make & Model)
It’s no secret that depreciation plagues every car, especially those bought new, but what’s the story for electric vehicles?
Electric cars have grown in popularity over the last few years, accounting for approximately 17% of all new cars sold in the UK, with a whopping 10% growth on the same stage last year; but does their residual value reflect that? Or is the used market becoming saturated, meaning lower resale prices and bigger depreciation?
In this article, we’re looking at the top 10 best-selling EVs in the UK (based on 2023 SMMT data) comparing their new and used value; giving you a clear picture of how much (if anything) you’ll be losing if you opt for a new electric car.
First, let’s cover some of the basics of depreciation and EVs…
What Are The Top 10 Best-Selling Electric Cars?
Top 10 Best-Selling Electric Cars By Units Sold (2023)
- Tesla Model Y | 35889 Sold
- MG4 EV | 21715 Sold
- Audi Q4 e-tron | 16757 Sold
- Tesla Model 3 | 13536 Sold
- Polestar 2 | 12542 Sold
- Volkswagen ID.3 | 10295 Sold
- Kia Niro Electric | 10084 Sold
- BMW i4 | 8940 Sold
- Volkswagen ID.4 | 8495 Sold
- SKODA Enyaq iV | 8136 Sold
What Causes Car Depreciation?
Depreciation can be caused by a number of factors including mileage, the number of owners, make and model, service history (or lack of), general wear and tear and fuel economy. We’ve covered it in more detail in our guide: Why Do Cars Depreciate?
There are a number of ways you can minimise your vehicle's depreciation; however, it’s extremely difficult to negate it entirely, as all but the most sought-after cars will lose value over the course of your ownership.
Are There Any Other Downsides To Depreciation?
Aside from losing money on your vehicle when you come to sell it or trade it in, there is another, less-known downside to car depreciation.
If your car is involved in an accident, fire, theft, or any other situation where it’s declared a ‘total loss’ (which some refer to as a ‘write off’) then your motor insurer will usually settle at the amount the car is valued at the time not the amount you may have paid, or still owe.
This difference, caused by depreciation is usually left to owners to cover, creating a financial shortfall which, in some cases, can be tens of thousands of pounds. Gap Insurance can help make up the difference once your settlement has paid out.
How Much Do Cars Depreciate On Average?
As we’re about to investigate, depreciation can vary from model to model. However, as a general rule of thumb cars will depreciate around 15-35% in the first year, rising to 50% over three years.
Car Depreciation In The Top 10 Best-Selling Electric Cars (UK 2023)
Tesla Model Y
The most popular electric car on the market in 2023 selling just under 36000; on the road prices for Model T Teslas range from £44990 to £59990, depending on the finish you choose.
The ‘Long Range’ model, which retails for £52000, sees a depreciation of around 19.9%, with the average year-old model selling for £41680. Higher-priced Model Ys are in the range of £43000, with the lowest priced being £28000.
Owning one for two years means your Model Y would lose around £16000, a depreciation percentage of 31%, with higher-priced examples around £37500 and lower priced ones coming in at £35000.
New Price: £52000
One Year Old: £41680
Two Years Old: 36000
MG4 EV
With a £27000 starting price the MG4 definitely delivers when it comes to value for money, but what’s it like at holding its value?
The average MG4 EV (SE Model) depreciates 22.5% in the first year, with a resale value of £21000. In the second year depreciation is around 37.7%, with the average model selling for £16992.
New Price: £27000
One Year Old: £20932
Two Years Old: £16992
Audi Q4 e-tron
The Q4 e-tron delivers the usual finesse you’d associate with Audi, making it no surprise that it’s one of the top-selling EVs on the market. Both interior and exterior deliver the Audi style, but does that help it hold its residual value on the used market?
New, on-the-road prices for the Q4 e-tron start at £46200, which based on average resale values, drops to £33803 after one year of driving, with an average mileage of 8000 miles. This equates to a depreciation level of 26.9%
In the second year, depreciation levels reach 37.3% with a two-year-old model averaging a resale value of £29000.
New Price: £46200
One Year Old: £33803
Two Years Old: £29000
Tesla Model 3
One of the most popular forerunners, the Tesla Model 3 was once the mainstay of EVs on Britain's roads.
The ‘Long Range’ model retails at £49000, with an average price of £38950 after one year, a depreciation of 21%
Two year old Model 3’s command a resale price of £32000, showing depreciation of 34.8%
New Price: £49000
One Years Old: £38950
Two Years Old: £32000
Polestar 2
Volvo’s breakaway; Polestar managed to sell over 12000 Polestar 2’s in 2023, meaning a bigger used market long term. How does that affect residual values?
A 31% depreciation after one year and 36% after two means buyers can pick up a Polestar 2 Long Range model for approximately £31000 or £28700 respectively.
New Price: £44900
One year Old: £31031
Two Years Old: £28694
Volkswagen ID.3
The ID.3 is another on the list that delivers great entry level pricing with the Pro Essential statting at £34820. Higher spec models such as the Pro S variants around £39000.
With the Pro in mind, one year ownership sees a depreciation of just under 26%, losing around £9500 with a resale value of around £27000.
In two years the Volkwaged ID.3 depreciates a whopping 50%, with average models selling for £18040; that’s a loss of around £18500.
New Price: £36550
One Year Old: £27076
Two Years Old: £18040
Kia Niro Electric
The Kia Nero 4 comes in a variety of power types with a few hybrid options available. If you opt for the fully electric 65kw model you’ll be paying around £41500 from new, with year old options available on average for just shy of £30000, a loss of £11500 and an approximate depreciation of 29%
Older options are a bit thin on the ground when it comes to the Nero 4 (electric). However, as a general rule of thumb, owning one for two years will lose roughly £14000 from new, a depreciation level of 34%
New Price: £41545
One Year Old: £29976
Two Years Old: £27500
BMW i4
As you’d expect from BMW, the i4 comes with plenty of options available, here, we’re looking at the ever-popular BMW i4 MSport. From new it’s £51865, dropping to just under £42000 after one year and £36000 after two; depreciation levels of 19% and 31% respectively.
New Price: £51865
One Year Old: £41975
Two Years Old: £35715
Volkswagen ID.4
The second Volkswagen on our list, the ID.4 Pro Performance retails at £40800, with a first year depreciation of approximately 25%, equating to a resale value of £31000.
After two years the ID.4, on average, will be worth £25500, which means a loss on the new price of £15000, a depreciation of 38%
New Price: £40800
One Year Old: £30926
Two Years Old: £25424
SKODA Enyaq iV
Often seen as a genuine, budget-friendly alternative to the main German marques, Skoda has done well with the Enyaq, selling just over 8000 in 2023 alone. Does that mean better residual values? Let’s take a look:
A new Skoda Enyaq iV 80 has a new RRP of £42925 which, after one year can be bought used for £31616, a loss of £11000 or a depreciation of 26.4%
New Price: £42925
One Year Old: £31616
Our Methodology
To understand depreciation we looked at the top 10 best-selling electric cars and their standard list price from new, taking into account the different model variants to ensure data given was representative of one type only.
After that, we looked at the average selling price of the same models on the used market, segmenting by those 1,2 and 3 years old (where possible) and an average mileage of approximately 8000 per year.
Depreciation has been calculated using the amount lost as a percentage of the value at new.
Considerations: When calculating the depreciation, we used the new RRP price for each vehicle. This doesn’t account for any discounts, sales, or offers that may be on from time to time. Our method also doesn’t consider any extras that may be added to each available used model.
Where possible, we have avoided any used car declared a write-off in any category.
Our Final Word
EVs are definitely here to stay, with the growth of infrastructure and increasing government incentives to make the switch to electric we can only envisage more and more electric cars on our roads in the coming years.
Unfortunately, as with all cars, they’re still prone to deprecation. Our advice, as always, is to change the way you view car buying, otherwise you’ll always feel out of pocket.
Instead of buying your car as a financial investment (which it almost certainly wont be), buy for fun! Choose the make and model you love and enjoy it on a daily basis.
Remember, you can always choose Gap Insurance to help minimise your risk of financial shortfall and protect against depreciation; should your EV ever be declared a total loss.
If you’ve enjoyed reading, be sure to share this article with your network and don’t forget to send Luke a message using social media if you have any questions.
Luke Sanderson
Luke is our resident copywriter, combining plenty of automotive experience, particularly in car sales with a commitment to well-researched, extensive writing. He draws on his own experiences, as well as quizzing the entire team at Direct Gap to ensure the blogs and articles you read are worthwhile, valuable and accurate. Got a question for Luke? Drop us a DM on social media and he'll be happy to help.
