EVs Could Put a Big Damper on the Used Car Market
After a few years, those high-voltage batteries aren’t worth a damnby Robert Moore, on
Have you ever noticed how your cell phone or iPod doesn’t hold a charge quite as long as it used to? The same thing can be said for any rechargeable battery – like the one used to start your gasoline- or diesel-powered vehicle, or even rechargeable batteries used for TV and video game remotes. It’s something nobody really pays attention too, but all rechargeable batteries suffer from capacity degradation over time whether they are regularly charged or not. So what does this have to do with the used car market? Well, as EVs become more popular and start becoming more commonplace, they’ll start to be treated the same way we treat fuel-powered vehicles now: drive them for a few years, then trade it in for something new. But, unlike cars with an internal combustion engine, there will be no such thing as an EV that drives and performs like new after seven or eight years of use.
Just to be clear, I’m not saying all ICE engines will run or perform like new after 100,000 miles and consistent use of a six to eight year period, but it does happen if they are well maintained. Back to the point, the batteries that serve as the lifeblood of EVs, like any other lithium battery, are subject to degradation. Take the Chevy Bolt EV, for instance. Chevy recently published the 2017 owner’s manual for the world to see. Hidden away in the warranty information (page 322) there is a little clause that says:
“Like all batteries, the amount of energy that the high voltage “propulsion” battery can store will decrease with time and miles driven. Depending on use, the battery may degrade as little as 10 percent to as much as 40 percent of capacity over the warranty period. If there are questions pertaining to battery capacity, a dealer service technician could determine if the vehicle is within parameters.”
That means that anyone looking to buy a used Bolt EV in, say, five years won’t likely find one with the full 238 miles of range. In fact, at eight years, Chevy says a loss of up to 40 percent is “acceptable,” which would drop that range down to as little as 142 miles – that’s Nissan Leaf territory. Maybe you’re thinking that you could use that battery degradation as a bargaining point for a lower selling price, then replace the battery. If you are, I like the way you think, but don’t jump on board with that idea just yet. At launch, the secured cost of a lithium-ion battery pack for a Chevy Bolt is $145 per kWh. That comes to a cost of $8,700 for a brand new battery. GM estimates that the price will be down to around $100 per kWh by 2022 when all of these little EVs will be flooding the used market, but even then, it will still cost you an extra $6,000 to replace the battery and get the full 238 miles of charge.
So, what could this really mean for the used car market? Keep reading to find out.
The effects could be drastic
Think about the way the used car market works now. Not everyone can afford to buy a brand-new vehicle, so getting a certified used model that is five or six years old can be appealing and affordable to some. Others take the cheaper way out and buy something much older but still dependable. But, when it comes to EVs, there is speculation that they will be more like throw-away cars. There won’t be as many older cars on the road, and the days of buying a 10- or 15-year-old model or a “cheap winter beater,” for instance, will be a thing of the past. The value of EVs could depreciate pretty harshly, so you might be able to get a used EV cheap, but with a significant drop in range and the range anxiety associated with EVs, an eight-year-old Bolt is going to be a hard sell. And, at the cost of say $6,000 to replace the battery in 2022, that’s a big chunk of money to add onto your used car note or to pay out of pocket after purchase. Then, of course, there’s the viability of the electrical motors. These things don’t necessarily come cheap either and will limit the usable life of vehicles without costly repair costs.
With all of that said, we’re still in the beginning stages of a transition to electric vehicles, so in 15 or 20 years, who knows what kind of technology we’ll have. By 2030, we could have batteries capable of 1,000 miles per charge, so a 40-percent degradation won’t be bad. Plus, the price per kWh will continue to drop over the years, so replacing old, worthless batteries will get cheaper. But, for a while, the used car market will likely suffer. Of course, that’s good news for manufacturers because that will make the choice of spending a little more on a new car with a warranty much more appealing.
If you’re interested, we’ve attached a copy of the 2017 Bolt EV Owner’s Manual to this article, and you can view a paper on specifics behind battery degradation from Sandia National Laboratories here.
|Type:||Rechargeable energy storage system comprising multiple linked modules|
|Mass (lb / kg):||960 / 435|
|Type:||Single motor and gearset|
|Motor:||Permanent magnetic drive motor|
|Driving Range:||EPA-estimated 238 miles|
Read our full review on the Chevrolet Bolt EV here.