EVs Depreciate Faster?

Plummeting resale values are threatening to derail the world’s transition to electric transportation.

 

·             Ride-hailing, rental, and corporate electric fleets are quickly losing value.

·             EVs depreciate significantly faster than gas-powered cars, especially older vehicles purchased by early adopters.

·             New battery data and leasing models could finally stabilize the bleeding market. 

The crisis became especially apparent when BluSmart, India’s pioneering all-electric ride-hailing service, collapsed in April amid financial fraud allegations. The Delhi-based company’s fleet of thousands of cars, originally worth over $12,000 each, suddenly flooded the market at about $3,000. 

Source: https://en.wikipedia.org/wiki/Electric_car

For Tesla owners in the U.S., their 2023 Model Ys are worth 42% less than what they paid two years ago, while a Ford F-150 truck bought the same year depreciated just 20%. Older EV models depreciate even faster than newer ones.  The crisis exposes the fundamental problem that nobody really knows what electric cars are worth in the second-hand market, as their value is largely tied to batteries with uncertain lifespans. 

A U.K.-based study found 3-year-old EVs lost more than half of their value compared with 39% for ICE cars. Another study conducted by Boucar Diouf, an EV researcher and professor at Kyung Hee University in Seoul, found EVs in the U.S. can lose as much as 60% of their value over three to five years, compared with less than half for traditional vehicles. 

For fleet owners and operators — across sectors from ride-hailing to rentals to logistics — pledging to go green, this value disaster is threatening to derail the sustainability movement.

Florida-based car rental company Hertz, which bought 100,000 Teslas in 2021, reported a $2.9 billion loss in 2024, driven largely by plummeting EV value, according to its February 2025 earnings call. The company was haemorrhaging more than $530 a car monthly by late 2024, due to high upfront costs, steep insurance premiums, and long repair and restoration lead times, according to EV news publication InsideEVs. Hertz dumped 30,000 EVs — Teslas bought for more than $40,000 ended up on its website for resale at prices under $20,000. As of October 8, it listed a Model Y for $27,000. A new Model Y cost $45,000 in the U.S. until earlier this month, when Tesla launched a more affordable version at just under $40,000. 

An April 2025 McKinsey report shows one in five Europeans and just one in 10 U.S. consumers are considering going electric. Fleet operators, though, are making massive bets globally, with companies such as Uber, Bolt, and Lyft pledging full electrification — despite vehicles potentially becoming worthless before the loans are even paid off. 

Battery tech, however, is now proving more resilient than expected. Research from Recurrent shows batteries deteriorate just 1%–2% annually, with only 1% of cars built after 2016 needing replacements versus 13% for older EVs. Most of the recent replacements are also covered by warranties. That’s the good news! 

So, 2026 “will be a year of industry and market readjustments to both lower supply and demand.” And hence one needs to be careful in purchasing an EV. 

Reference:

EVs are depreciating much faster than gas-powered cars, Ananya Bhattacharya, Rest of World, 17 October 2025