cross-posted from: https://mander.xyz/post/57939677
China’s used car dealers have set an expiry date for electric cars.
About four out of five used car dealers in China refuse to accept a fully electric vehicle older than five years, over worries about battery life and replacement costs, according to the International Energy Agency’s Global EV Outlook. A 3-year-old EV in China now resells for about 45% of its original price, down from almost 55% in 2023, according to the China Automobile Dealers Association.
China has been the world’s largest EV market for a decade and now has 44 million of them on its roads. This makes it the first country where EVs are aging in large numbers. Yet its dealers can’t reliably price a used EV, because there is no agreed way to measure the health of its most expensive part, the battery, according to industry experts. The countries that have imported Chinese EVs will face the same valuation problem as the cars turn five.
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“Exporting the car is the easy part,” Bill Russo, founder of the Shanghai-based advisory firm Automobility, told Rest of World. “Building the ecosystem that supports its second and third owner is much harder.”
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Chinese carmakers exported more than 2.5 million EVs last year, twice the previous year’s total, the IEA reported. Europe was the largest market, followed by Southeast Asia. Chinese cars now make up 55% of EV sales in countries outside Europe and the U.S.
Buyers in the Gulf back away at the same five-year mark, as mileage climbs and the battery warranty winds down, Harsh Chaturvedi, an independent automotive consultant in the United Arab Emirates, told Rest of World.
“Customer interest drops significantly after the fifth year,” said Chaturvedi, who co-founded and ran the Indian electric fleet company MyEVPlus before selling his stake. “The fifth year therefore becomes an important psychological and commercial point in the used EV market.”
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Analysts, lenders, and leasing companies calculate how much a car loses at three and five years, the length of a typical lease and loan, Karl Brauer, executive analyst at U.S. car search firm iSeeCars, told Rest of World. EVs fall faster in those calculations because new buyers pay extra for the latest technology and for the statement the car makes about them — as much as they would for a luxury badge, he said.
“Used car shoppers are much more value-oriented,” Brauer said.
Battery warranties add to the concern, and explain why dealers turn older EVs away. Manufacturers typically cover the battery for eight years or 160,000 kilometres (99,419 miles), and a replacement can cost a third of a new car, Chaturvedi said. Every year of age eats into that warranty, and once it expires, the cost of a failed battery falls on the owner.
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Tesla refuses to accept Cybertrucks after just 2 years.
Dealer tradein is a ripoff anyway.