Car buyers won’t have easily missed the negativity swirling around electric vehicles (EVs) for the past few months. Some of this is based on incorrect information — such as batteries that give up the ghost after a few years and cost the Earth to replace — and some of it caused by the price-shift in the electric car market that is making buyers wary.
Whatever has triggered the negative hype, there’s no doubt it’s influencing those in the fortunate position to be buying a new car, giving them pause before they make the move to electric power. It’s time to tackle some of the issues objectively.
Following a period of low supply and high demand for new and used electric cars in 2021 and 2022 — leading to unrealistically high values on the used market in particular — there was a shift change in 2023 as supply freed up. Adding momentum to the natural swing back to realistic pricing, Tesla announced significant price reductions on its new cars early last year.
The knock-on effects of that were profound, as it instantly devalued used Teslas and indirectly reduced the residual values of all used EVs on the market. That trend accelerated as other car brands did their best to match Tesla’s pricing with considerable reductions in new-car pricing across the board.
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At around the same time, the first wave of the most popular modern-generation EVs, such as the Volkswagen ID.3 and ID.4, entered the used market as their owners changed to new cars and suddenly there was no shortage of used electric cars.
Availability of affordable electric cars is what motorists have been crying out for, of course, so it’s all great news if you’re about to go electric. Why the negativity? Because some ‘early adopters’ of electric cars have come to trade up for a new car and found their car worth less than hoped, making the ‘cost to change’ high.
The naysayers have used this to suggest that residual values for EVs are lower, and always will be, than those for cars powered by petrol, diesel or hybrid engines. They are conveniently ignoring the fact that the situation was the other way around only a year ago and that the market is transient.
Experts (note the difference between an expert and a ‘specialist’ — there are plenty of EV specialists calling themselves experts but they’re of no use to anyone that isn’t sure if electric power is for them) believe that there are already signs of price stability, and it’s unlikely that we will see such large reductions in the cost of new EVs again, the main driver for the current situation.
Understandably, recent buyers of new EVs may be anxious about the value of their car given the negative media attention. And they won’t be reassured if they try to find out its value, nor by the headlines suggesting that garages won’t take electric cars as trade-ins. In fact, only a handful of independent dealerships have come out and said that, and that’s their prerogative given the short-term nature of their buy-and-sell business.
The thing is, all new cars depreciate considerably in their first year; indeed, as soon as they have registration plates on them, and they leave the forecourt, they’re worth a lot less than the owner paid for them. At this very moment in time, EVs seem to be losing their value quicker than their internal-combustion-engined siblings.
But this is a momentary thing, and most new-car buyers don’t plan to change their vehicle in such a short time. It’s expected that the market will stabilise within a year and anyone buying now will find normal levels of depreciation over the next few years.
The advice is simple: don’t panic, enjoy the car you bought for now and worry about its trade-in value when the normal time comes. For those who bought on PCP (Personal Contract Plan), the car will have a ‘guaranteed future value’ and fixed monthly payments in any case.
The drop in EV values is great news if you’re in the market for a used example today. The earliest proper electric car on the Irish market was the Nissan Leaf and today, €5,000 will get you a decent version with good specification, low mileage and plenty of life left in it.
Sure, the range between charges may not be much more than 100 kilometres or so, but that covers most commutes and it’ll cost cents to run if you can charge it up at home. Up your budget to closer to €15,000 and there are options that should manage nearly 300km on a charge, while the cheapest used Teslas are about €20,000.
There has been some talk about the cost of replacing batteries and their longevity that is worth addressing here. Undoubtedly, it would be prohibitively expensive to replace a full EV battery, especially for older models that have a low value to start with.
Of course, the same can be said for replacing an engine or other expensive component in a petrol or diesel car, and scrapyards around the country are always full of seemingly decent petrol and diesel vehicles which could not be economically repaired. However, and this is a key detail, it’s incredibly rare for a full battery pack to be unusable.
The packs are made up of multiple modules containing a multitude of battery cells, more like AA and AAA batteries than you might expect. While it’s not the work of a moment to work on this set-up, neither does it have to cost thousands of euros to repair. And anyway, batteries and electric motors are inherently more reliable with far fewer moving parts than an internal combustion engine.
There has never been a better time to buy an EV — new or used. While new EV sales are still relatively healthy, they’re not as buoyant as was predicted for this year, dampened by the negative press and buyer uncertainty.
That indecision is unlikely to last long so now is a great time to walk into a showroom and make a deal with salespeople potentially nervous about hitting targets. What’s more, if you are unconcerned about having the latest registration plate, you could get a better deal now, ahead of the “242” registration change on July 1. That usually comes with a flurry of sales, but registrations in the month beforehand are slow.
Supply of new EVs is excellent right now, too, meaning you should have your choice of model. And, of course, there are new options being added every week, so there’s massive variety in the market. The pace of new model roll-outs has never been as high as it is now, and most of the new cars are electric.
The poor state of Ireland’s public EV-charging network can be at least partially blamed for the slower uptake of new electric cars than expected. In a recent report by environmental think-tank Transport & Environment (T&E), Ireland was third from the bottom in a table of EU countries listed in order of achieving targets for rolling out electric car chargers — ahead only of Cyprus and Malta.
EV drivers regularly report long queues at charging stations or poorly maintained chargers, and buyers on the cusp of going electric undoubtedly take that on board and it puts them off making the change. Thankfully, the situation is slowly improving, with more availability of fast chargers along busy routes than ever, but the pace of the network improvement and roll-out is too slow, notably so away from the main motorways.
However, that should not concern everyone. The vast majority of drivers do less than 100km a day in any case so won’t need to often charge up a modern EV, most of which can surpass 400km between charges now, in their daily life. Sure, the few times a year you do a longer trip, it’s less convenient to charge up than it is to fill a petrol or diesel tank with fuel, but that’s hardly a reason to not buy an EV. And the public network is improving. Slowly.
The thing is, EVs make most sense and cost the least to run, if you can charge them up overnight at home. That way you take advantage of cheaper rates of electricity and the car is parked up and not in use anyway, so it takes no time out of your day. Some businesses supply EV chargers for employees to use, too, and there’s no benefit-in-kind tax applied if you do so.
Admittedly, there’s still a large cohort of people not properly catered for in the transition to electric motoring, and that’s those without off-street parking, whether that’s a terraced house or an apartment or even rented accommodation where it’s not possible to install an EV charger.
There needs to be in place far more expansive infrastructure — and not just rapid chargers along national routes — to ensure everyone has access to affordable charging stations. Ireland is a very long way from that, unfortunately.
The advice is to ensure you know where you’re going to charge your EV before you buy it, and if you can’t fit a charger at home, investigate subscription-based charging to keep your costs down. Tesla, for example, has its own ‘Supercharger’ network of chargers that are fast and rarely fully occupied, but there are other options.
It’s difficult to know what to believe when it comes to the success or otherwise of Tesla. It undoubtedly sells a lot of cars and has a fiercely loyal following, but Elon Musk seems to do his best to undo the company’s good work with his public persona and financial decisions.
Not that many of us are qualified to comment on how a billionaire does business, but a recent round of lay-offs at the company isn’t confidence-inspiring, either. Regardless, the new Tesla Model 3 is really good value and better than ever, and there’s a similar round of improvements coming to the popular Model Y.
After that it’s anyone’s guess as to how soon Tesla can bring another new car to market. The headline-grabbing Cybertruck won’t be sold in Europe, for example, and it’s not clear if the much-rumoured Tesla Model 2 hatchback will ever see the light of day — and be profitable against the cavalcade of new Chinese EVs.
If you’ve been keeping an eye on the car market then you’ll have noticed the onslaught of new brands vying with the old guard, using the transition to electric motoring as a springboard to launch. Almost all these new brands hail from China and in fact, many of them aren’t new at all, but well-established in their home country.
Take BYD for example. The letters stand for Build Your Dreams, which sound funny, but it’s no joke that this Chinese conglomerate makes and sells more EVs globally than any other. It already has three models on sale in Ireland that stand up well to comparison with cars from better-established marques, and not just because they’re well-priced. It has many more on the way.
BYD is not alone, but it is typical of the newest generation of Chinese cars that can compete in terms of ability and technology, not just a bargain-basement price. Whether buyers will be willing to overlook the fact that the Chinese government is involved with all these companies on some level, and that it has a dubious record in terms of human rights, remains to be seen, but in truth, the same could be said of virtually any piece of technology we use in our daily lives.
Regardless of the negative press that EVs have received of late, they are, at the very least, the medium-term future of motoring in Ireland and the rest of Europe. Legislation is in place that will eventually ban internal-combustion-engined cars from sale and hence the car makers have invested billions of euros in ensuring they are ready for the change.
The short-term blip in demand won’t change the long-term strategy of the motor industry and governments around the world. Given this future, we’d argue that it’s potentially riskier to buy a new diesel car than a new electric one, though we’d advise buyers to go for the vehicle that best suits their needs for the next few years and not to worry too much about what happens.