EVs don’t hold their value — but hybrids do

Hybrid vehicles are emerging as the choice for buyers looking for an alternative to a traditional vehicle, and used hybrids are holding their value better than most other vehicles. All-electric vehicles have the worst depreciation rate by vehicle type.

iSeeCars reports the average five-year depreciation rate for electric vehicles is almost 50%, meaning the typical EV loses half its value in just five years.

One reason is technology.

“There is absolutely an element of the rapid evolution of EVs that we are seeing right now that also makes EVs that are not particularly old start to look more obsolete more quickly than a traditional vehicle,” said Karl Brauer, executive analyst at iSeeCars.

EV depreciation rates are also exaggerated by incentives that pull the price down immediately. A $7,500 government incentive for purchasing an EV makes a $50,000 EV instantly a $42,500 EV, and depreciation rates are based on original MSRP price, not the price after any incentives or rebates.

Hybrids on the other hand have one of the lowest five-year depreciation rates of any vehicle class, losing an average 37.4% — better than the overall five-year depreciation average of all vehicles of 38.8%, and the second-lowest among vehicle class, behind pickup trucks.

“A certain percentage of the population now realizes there is no downside to a hybrid,” Brauer said. “You get no range anxiety and you get far better fuel efficiency. And the pricing of them has become much closer to traditional vehicles. There is not that much price increase to get a hybrid version of a given car.”

This month, Toyota announced that all four versions of its 2025 Camry would be hybrids. The Camry is the bestselling car in the U.S.

When it comes to which makes of vehicles depreciate the most, all are high-end luxury vehicles that were very expensive when new. The five-year depreciation rate for a BMW 7 Series is an average 61.8%. It is 58.5% for a Cadillac Escalade ESV, and 57.6% for a Jaguar XF.

“There is a saying that there is nothing more expensive than a cheap luxury vehicle. It may be a used luxury vehicle, but you are still going to pay new luxury vehicle maintenance costs on it. So that scares a lot of used vehicle buyers,” Brauer said.

Overall, used vehicles have a five-year average depreciation rate of 38.8% currently, much better than the five-year depreciation rate of 49.6% in 2019.

Below are five-year rates by make and model for the 10 vehicles that depreciate the most, and depreciation rates by vehicle type. The full iSeeCars list is also posted online.

The make and model for the 10 vehicles that depreciate the most.
The make and model for the 10 vehicles that depreciate the most. (Courtesy iSeeCars)
How vehicles depreciate based on their type.
How vehicles depreciate based on their type. (Courtesy iSeeCars)
Jeff Clabaugh

Jeff Clabaugh has spent 20 years covering the Washington region's economy and financial markets for WTOP as part of a partnership with the Washington Business Journal, and officially joined the WTOP newsroom staff in January 2016.

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