Will Electric Cars Have High Resale Values?

This post, part of a series we're running all about electric cars, was written by Nathan Chandler from HowStuffWorks.com.

When you're researching vehicles to find the perfect ride, you'll undoubtedly check factors such as performance, cost and reliability. For many car buyers, resale value is another important consideration. When it comes to electric vehicles (EVs), that last point is a difficult one to determine.

After many years, EVs are emerging from the shadows of the car manufacturing industry. With these cars finally entering mass production, there are many unanswered questions regarding their potential resale value.

Some say the value of the typical EV will plummet after the vehicle is five years old, at which point the car will have a trade value little more than 10 percent of the list price. That assertion comes at least partially because if you consider the value of a used EV and take away the cost of buying a new battery for it, you probably won't have much cash left.

The state-of-the-art, super-powerful lithium-ion batteries that new EVs use won't last forever. They're also incredibly expensive. For example, the relatively affordable Nissan LEAF's battery pack costs nearly $20,000, which is a huge hit on your bank account when a replacement is necessary. Mitsubishi guarantees batteries for its i-MiEV for 62,500 miles (100,584 kilometers), but if you're lucky, the battery will work for around 100,000 miles (160,934 kilometers).

If you're not put off by the high cost of the battery, you may be taken aback by the initial price of EVs. The list prices for many electric models tend to be significantly higher than for gas-powered cars. The fuel-efficient Honda Civic and Toyota Camry start at around $20,000, while the most affordable electrics start in the $30,000 range. Nissan LEAF will sell for about $32,000.

Some of the aforementioned factors may actually boost used car prices. Several manufacturers, such as Nissan, Ford and BYD will be rolling out new models en masse over the next couple of years. In short, there could be a few price wars that help drive down prices a little.

However, demand is expected to outweigh supply for some time. Experts expect that demand will be far ahead of supply for the time being, with the demand for used EVs being even higher.

What's more, hybrid and EVs are rarely, if ever, discounted as new purchases. The fact that there are so few incentives on new vehicles should result in higher resale values for used models. In addition, new, stricter emissions regulations may penalize gas-powered car owners, making EVs even more popular and driving up resale value.

One great aspect of electrics is that they have so few moving parts. So when gas-powered vehicles with hundreds of moving parts are rapidly aging from wear and tear, EVs will still be rolling along with very few problems.

Ultimately, there are too many variables to accurately predict how well used EVs will hold their value. It will be several years before we really know. As with all newfangled, version 1.0 products, consumers need time to evaluate the goods, point out the flaws and then let marketplace demand dictate resale values.