HOW BATTERY LIFE AFFECTS THE RESALE VALUE OF USED EVS

For most people, an EV battery is as exciting as a gas tank. (Not the gasoline, the tank itself.) No one thinks about it unless something is awry. However, it is difficult to sell a used EV with a half-dead battery. Even for those “I drive it until the wheels fall off” car owners who don’t care about resale value, a worn-out battery can hasten an EV’s final trailer ride to the local pick-and-pull. Of course, relatively few EV buyers can choose what type of battery goes into the vehicle.

And, because EV batteries are not standardized, most battery upgrades require custom fabrication. It is obvious that a battery in good condition adds to the resale value of a used EV. With that in mind, here are a few ways a battery affects the resale value of a used EV. Of course, EV batteries are relatively self-maintaining compared to engines. There aren’t any fluids to flush or valves to adjust. However, we also have a few tips that can help owners get just a little more out of an EV’s battery.

What Shapes Battery Longevity in the EV Market

• Different factors like the local climate (especially heat waves and deep freezes) and driver habits can affect a battery's lifespan.
• EV owners can maximize battery lifespan with basic practices like charging the car when the temperature isn't extremely hot or cold, keeping the battery around 80% as opposed to fully charged, and other practices.

It’s true that most EV buyers can’t control what type of battery goes into their car. (The term “lithium-ion” refers to a family of batteries as opposed to a single internal chemistry.) Most automakers only offer a single battery per model. And, of course, most people don’t know the difference between “lithium iron phosphate” and “lithium nickel manganese cobalt,” which makes car shopping by battery type an exercise in under-informed futility. It is safe to say that every type of EV battery currently on offer is good enough to power a car. However, there are a few things that owners can control.

What Factors Affect Car Batteries?

EV batteries are meant to be semi-permanent parts of the car (as opposed to ICE batteries, which can be changed out in fifteen minutes if one needn’t hunt down each wrench in a discombobulated garage). Because of this, the way an owner treats the battery can either add or remove a zero from the resale value.

The weather can add or remove multiple years from a battery’s lifespan. Just like ICE batteries, EV batteries do not like to be frozen or fried. Of course, there is very little that EV owners can do about the weather aside from parking indoors whenever possible. However, the climate of any given area may inform used car buyers' choices. Just as classic car collectors tend to seek out cars from the American South because they aren’t likely to suffer road salt damage, EV buyers may soon learn to avoid used cars from dangerously hot places like Arizona and Texas. As the used EV market matures, some states may prove more valuable than others.

Getting The Most Out Of Your Battery

Most people can surmise that an EV battery, like the car in which it resides, will last a lot longer if it spends its downtime indoors. It is also obvious that a battery ages a lot faster if it repeatedly gets completely drained between charges. But many people don’t know that charging the battery when the ambient temperature is sweltering or freezing is also hard on batteries. Of course, it’s pointless to wait for warmer weather before charging in the winter. However, in the summer it is a good idea to wait until after nightfall before plugging the car in.

Don't Go To Either Extremes

Most batteries last longer if the owner keeps them between 20-percent and 80-percent charged. Indeed, fully charging a lithium-ion battery can dramatically hasten its death. For this reason, many electronics are programmed to falsely read “100% charged” when the battery is actually somewhere between 95 and 98 percent. This white lie helps the battery last longer and prevents customer complaints that “it isn’t charging right.” However, occasionally charging a battery to near-full capacity (say, 95% or so) can help with power redistribution among the battery cells. All battery management systems (or BMS for short) have automatic redistribution cycles that correct any lopsided distribution of stored energy within the battery pack. However, charging it a little fuller than usual can help make the process more effective.

An EV battery is not a single large unit with two power terminals sticking out of it. Instead, it is composed of multiple cells that are housed in a single (and very heavy) package. The cells look very much like the alkaline batteries that famously are not included with children’s toys. Because it is difficult to evenly route electricity in and out of hundreds of battery cells, some of them inevitably get drained and recharged more than others. It should also be noted that avoiding fast-charging can also lengthen an EV battery's life. However, the battery management systems in modern EVs are very good at preventing the sort of damage that fast-charging can cause.

Maximizing Value in the Used EV Market

• Sellers who want to prove a used EV's battery health can use simple options like showing the car's in-dashboard range rating, or pointing out how little of a battery's charge is used in a test drive. These require no specialized equipment.
• Dedicated battery testers are available for detailed battery status reports.
• It may be worth replacing the battery before selling the car. If selling an EV with its original battery, the battery may still be under warranty.

Every seller wants to get the most money they can for their car. Even people who are selling a beater tend to charge more than the price of a cheap lunch. The market for used EVs is still taking shape, but some consistently reliable strategies are already emerging.

Happily, for both owners and buyers, there is relatively little that can go wrong with an EV’s powertrain. Electric motors have far fewer bearings and valves with thousandth-inch tolerances. This is not to say that EVs are indestructible, but they do demand a lot less maintenance than anything with an engine.

Smart Strategies To Present And Evaluate EVs With Battery Life In Mind

Right now, the battery is one of EV buyers’ top concerns. People may not know anything about how an EV battery works, but they know that replacement can easily cost several thousand dollars. Because of this, anyone selling a used EV can inspire customer confidence (and therefore coax more money out of wallets) by reassuring would-be buyers that an EV’s battery is healthy. Showing a car’s range is one of the simplest ways to prove a battery’s health. This merely requires the seller to fully charge the car and then show the range as displayed on the dashboard. If the car’s self-predicted range is reasonably close to what was originally specified when it was new, the battery still has a long life ahead of it.

For those who don’t want to invest in specialized equipment, test drives are another way to show off a battery’s state of health. One simply needs to point out how little the battery’s charge percentage drops during a test drive. This has the added advantage of being easily understood even by customers who aren’t “car people.” Those who want to put more numbers behind their sales pitch, battery testers are available. Every EV battery has a computerized management system that keeps it in good shape over the course of its life. To put it simply, a battery tester gets a health report from the battery’s computer. People can either purchase their own battery testers, or get a report printed out at any mechanic that works on EVs.

Like any vehicle history record, a battery health report tends to have simple charts that most car buyers can understand without an extensive physics education, and also technical information in minute detail for those who know how to read it.

Consider Battery Replacement And Warranty

A new battery is as reassuring as a new head gasket. In both cases, even people who don’t know what it is still know it is expensive. If a battery is well on its way out, it may be worth the expense of replacing it before selling. And of course, if the battery has already been replaced, it is a good idea to heavily emphasize that.

For those who are selling EVs with the original batteries still in them, it is worth checking if they have any remaining warranty on them. Automakers often put a longer warranty on the battery than the car it is housed in. Indeed, battery warranties often go for 8 to 10 years or 100,000 miles. Even people who know absolutely nothing about cars can understand the phrase “it’s still under warranty.”

The Price Of Used EVs Is Stabilizing, Which May Mean They Get Repaired Instead Of Discarded

• Used EVs are no longer losing value.
• Because EVs hold their value longer, owners have more incentive to pay for repairs instead of junking them.
• The EV market is moving beyond Tesla.

To the spiteful delight of everyone who has a V-8 where their identity should be, the resale price of EVs has been rapidly dropping for the past several years. However, used prices seem to be stabilizing (at least for now). Recurrent Auto’s price index for EVs shows that the sharp decline of prices seems to be over. This may have the happy effect of adding years to the lives of used EVs. After all, higher-value cars tend to get repaired instead of junked. In an idealistic world, this would lower the cost of the most common car repairs, including battery replacement. Of course, nothing in economics is ever simple, but everyone has to drive.

Used EV Prices Are Leveling Off

Recurrent Auto followed the resale prices of three 2021 EVs (Ford Mustang Mach-E, Tesla Model Y, and Volkswagen ID.4). Although their values dropped sharply for the first two years after 2021, in the past six months their used prices have all converged to a point just below the $25,000 mark. In September 2024, the price of all used cars at least two years old was $27,850.

This depreciation pattern does not seem to be EV-specific. Personal finance gurus love to smugly chant that “a car loses a third of its value the moment it drives off the lot.” And indeed, new cars of all types (whether electric or not) tend to lose a lot of value as soon as the new car smell wears off. Two years is about the right amount of time for the resale price to level off. After two years, the “post-new price plummet” is over, and cars can begin the long, slow depreciation that comes with becoming outdated and worn.

Tesla Is No Longer Driving The EV Market

Any discussion of used EV price fluctuations is perhaps incomplete without acknowledging Tesla's effect on the market. Fortunately for every EV manufacturer, Elon Musk’s influence over the industry is waning. It cannot be denied that Tesla essentially created the current market for EVs. Indeed, Tesla CEO/mascot Elon Musk established himself as the face of modern EVs. Unfortunately, Musk’s brief tenure as the world’s most popular and charismatic businessman has come to an abrupt end.

However, aside from the recall-beleaguered Cybertruck, the rest of the auto industry has caught up to Tesla. At this point, the EV market seems to be thriving in spite of the man who gets credit for launching it.

What The Future Holds

Just like many car buyers of today have opinions about engines (regardless of whether they understand engines at all), the time may soon come when people are at least loosely conversant in battery types. They may understand that LFP batteries tend to last a bit longer, and that NMC batteries are less prone to fires but tend to have lower output voltages. (At this point, it should be noted that EV battery fires are extremely rare.) Of course, as is always the case with cars, people don’t need to understand something before they can have opinions about it. Witness the many people who salivate at the word “turbocharged” without knowing what a turbocharger is.

An Optimistic Outlook: Advancements In Battery Trends Are Reducing Depreciation

As the EV industry matures, battery production has gotten cheaper. Increased sales have allowed battery manufacturers to take advantage of economy of scale. And, every battery producer has been constantly looking at ways to cut production costs. After over a decade, many of these efforts are paying off. Battery manufacturing is dramatically more efficient than it was a decade ago.

Additionally, EV depreciation is starting to taper off. This is partially because many EVs are reaching the age when their value hits a plateau. But on top of that, more people are buying EVs. They are no longer kooky and “too new to trust.” As EV values stabilize, a lot of repairs will seem more "worth it" than they used to. As stable prices lead more people to replace the battery instead of the whole car, this could easily lead to an increase in battery demand, which (thanks to economy of scale) would mean that the cost per battery drops again.

Finally, the prices of lithium and the other metals that go into batteries have been dropping for the past few years. While the cheap lithium party can’t go on forever, it looks like prices may be stable for quite some time.

The Benefits Of Battery Replacements Or Upgrades To Resale Value

By now, all EV buyers except the most oblivious tend to understand that EV batteries cost a lot. And, of course, everyone understands the very basic concept of “old batteries are bad.” Even people whose only experience with batteries is flashlights and phones can see the appeal of a new battery in an EV. It’s hard to put a numerical value on an abstract concept, but the phrase “the car has a new battery” adds a lot of reassurance to a potential sale. And when people think they are getting a good buy, they tend to let more money fall out of their wallets.

2025-01-06T03:13:27Z