Residuals on large EVs

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Not sure if this should go in the EV or car buying thread, but here goes...

We’re trading in the family bus (Grand Cherokee), and looking for our next. Mrs T is not on board with an estate, so if we’re going to end up fuelling a 2 ton car it feels like we should consider BEVs (we can charge at home and rarely do very long journeys). Given this will save c£200 in fuel per month vs the Jeep, man maths has given me a budget of £500per month (we paid £300pm for the GC).

Doing a few sums, I think this could open up a used I-pace or potentially a brand new Enyaq/Ioniq 5. Assuming I get one of these for £40k, I’d hit my £500pm budget provided in 3 years time I can sell it for c£26k (roughly £4.6k depreciation a year)

A few questions:

- Do forecast residuals on BEVs look in line with the above - or should I expect to lose a lot more than this?
- What do you think will depreciate less - a brand new enyaq/ioniq 5 or a 2 yr old I pace?

I’m not particular well versed in battery tech, so feel a bit nervous trying to estimate what is going to happen to values

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dave_s13 said:

How does that maths work to ensure you stick to a £500/month budget?? I can't get my head around it.

It's based on a £500pm PCP, 5% APR, initial deposit of £5k . I'd receive the £5k deposit back in full if the car was worth £26k at the end of the 3 years.

J1990 said:

Residuals - Residuals on the quote I got at the weekend had a brand new car with only £2k of options set with a 62k price after all discounts come back with just a £25k residual after four years, so 40%. I could just about stomach that but the 5.9% APR and the recent offerings from Hyundai/Skoda/Kia have me thinking that the Jag and Audi are really going to suffer with residuals as the electric SUV market opens up. They just aren't competitive with range, charging speed, interior space etc and yet have a 60% premium cost over the competitors. I feel like I'd be paying £9k/year to drive around in a car that was quickly outdated.

Interested in that £25k figure for a 4 year old i-pace. Given they're £62k new (after discounts etc), and £40k after 2 years, it does feel like quite a big decrease in years 3/4. If that's reasonable though then would need to pull the plug on it (...sorry).

In terms of the Enyaq/Ioniq 5 - is the thinking that these will retain their values relatively well in comparison (owing to lack of competition in the used market) or is it simply not a good move to go for an electric SUV today?

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SWoll said:

What Enyaq model are you looking at OP, there are a lot of them?

That’s a good question! I guess I was looking at the larger battery ‘80’ model, though on reflection the base ‘60’ would probably work fine. Going fairly light on the options list this would come in a good bit cheaper (sub £35k) and would definitely be within budget.

J1990 said:

I think the problem is that the Ioniq 5, Enyaq and ID4 will all have good models below the £35k threshold with tech and space that dwarfs the I-Pace - So in 2024 do you spend £25k on an I-Pace that's out of warranty or do you buy a 2 year old Ioniq 5 with 3 years warranty left and potentially still have some change left over?

The badge should help... I'm just not convinced enough that the badge will prevail over newer tech, especially with the public's huge level of range anxiety despite 99% of journeys that 99% of people do being well within the realms of what the current EVs offer in range.

I wouldn't be willing to get a 40-50k I-Pace on a high APR, it is literally cheaper to buy brand new with lower APR and stronger residuals if not keeping beyond the term. I don't think I can take the risk of forking out £50k cash for one and then potentially finding that the values plummet when it's a bit of a dinosaur in the market in just a few years.

All good points. While I find it very hard to believe I’d be better off buying an i-pace new than used (surely depreciation will tail off over time!?), I can definitely see the risk that in 2024 a 2 yr old VW/Skoda/Hyundai/Kia makes a compelling case against a 5 yr old Jag, and so this is reflected in the value of the latter. That being said, the i-pace will still be significantly cheaper than anything from the higher end of the market, which could mitigate this a bit?

I guess this gets me back to the start. It's always going to be very difficult to predict what the value of an EV is going to be in 3 years time given the lack of data/comparables, so not sure if my '£40k 2019 i-pace being worth £26k in 3 years time' is reasonable or nonsense.

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off_again said:

Dont know about the I-Pace, but bigger EV's are keeping their value pretty well. The depreciation curve is different though. I have noticed that the Model S keeps it value better than an equivalent BMW or Mercedes, but it drops unevenly over time. Seems to coincide with warranty expiry for key components and potential repair / replace costs. Battery seems to be the big one, which has proven to be reliable, but its a major worry for buyers looking to drop $40k or so on the car. But that seems to be expected and models that have been available for a while do seem to hold their value well due to an emerging third-party repair community.

At the far end of the market though, the retained value difference is not so much though, as customers do seem to be more confident with petrol engines which can be repaired for a lesser cost. But again, if you are looking at a 5/6 year old Model S, its what you expect. 1-3 years old though, as long as there is a battery / powertrain warranty in place, they do retain their value well.

Oh that's helpful - I hadn't considered the model S as a good reference point. A brief check on values tells me:

- There are far more versions of model S than I realised
- Today, the difference between a 2 year old and 5 year old model S is roughly a third (c£50k for a 'basic' 2019 Model S, c£33k for a 2016)

So applying that logic to the i-pace would suggest it could come in just in budget, though it's pretty marginal

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raspy said:

What does the data say? One set of results from Q2 2020 suggests the i-Pace will lose 49% of its value over 100k miles, and something like the Ioniq would lose 46% of its value over the same mileage

The results suggest Tesla Model S and X depreciate less over 100k miles

https://www.vanarama.com/car-leasing/blog/electric...

While I'd love to believe this, am wary that the chart implies that the value of a base i-pace won't go down to £40k until its hit 60k miles, whereas there are 17k mile examples at this price today.

That being said, I don't think I'm banking on mega low depreciation here, just don't want to get caught out if the values plummet (thanks to new tech/battery issues/something like that). I guess there is a multi billion pound industry here though, so I can see Jag/Merc/BMWs business model being reliant on cars like the i-pace retaining a decent amount of value over the coming years.

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Heres Johnny said:

Past performance is not a guide to future etc etc...

But this is the actual, historic depreciation curve for Tesla Model S 100Ds cars from 2018. Its not quite covered 3 years yet, but 97k falling to 55k now, so thats a 46% fall in just under 3 years. Tesla don't discount so the list price will also be the price you pay except in some rare situations

Thanks - really interesting - is there a similar data source for 2016 cars? Personally it's the depreciation in years 3/4/5 I'm interested in, I'm hoping that it will tail off like a traditional ICE motor.

CheesecakeRunner said:

I think that's very important when looking at historical Tesla depreciation. Up until recently, and even arguably now, there hasn't been any competition for a Model S or X, if you wanted a big, long range EV, you could only buy a Tesla. And as a result, they held their value.

Over the next 5 to 10 years that is going to change rapidly. More choice, and more secondhand vehicles available will result in higher depreciation.

Yeah this is the danger of looking at historic Tesla values. That being said, provided badge snobbery remains a thing, would hope that used i-pace values could also be protected by a lack of competition from the german marques (because you'll have to fork out a lot more to buy a newer BMW/Merc).

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CheesecakeRunner said:

Bear in mind it's a Jaguar though :-). My £65,000 Jaguar was worth £25,000 at three years old.

Please stop destroying my man maths with rational arguments.