Poor resale values of EVs threaten adoption, warn some experts
Drivers charge their Teslas in Fountain Valley, California, on March 20, 2024.
Jeff Gritchen | Medianews Group | Getty Images
A car loses value as soon as you drive it off the lot, but electric vehicles are taking this adage to a new level. That’s becoming a major barrier to wider adoption, according to some industry and investment experts.
A recent study from iSeeCars.com showed the average price of a 1- to 5-year-old used EV in the U.S. fell 31.8% over the past 12 months, equating to a value loss of $14,418. In comparison, the average price for a comparably aged internal combustion engine vehicle fell just 3.6%.
While lower used EV prices could increase their desirability to some buyers, they can also reduce demand for new electric vehicles, according to Karl Brauer, executive analyst at iSeeCars.
“The value a new car loses in the first few years is the single most expensive aspect of owning a new vehicle,” he said, explaining that “as more new car shoppers become aware of the massive drop in EV values they will be less interested in buying one.”
Speaking to CNBC’s “Street Signs Asia” on Monday, David Kuo, stock analyst and co-founder at the Smart Investor, said that the inability of EVs to retain value had kept him from investing in the industry.
According to Kuo, EVs are analogous to other consumer electronics like laptops and cell phones in that they tend to lose value and relevance quickly after being sold.
“The same [depreciation] is going to happen to electric vehicles; it’ll probably cost you $20,000, $30,000 to buy one, but in a year’s time it will depreciate much faster than an internal combustion engine car,” he said.
Industry insiders have also flagged EV resale problems. Speaking to Bloomberg late last year, representatives from VW and Toyota said depreciation was hurting the value proposition of their battery-powered vehicles.
Kuo further argued that the software and computing capabilities of used EVs may become outdated and incompatible with updates by the time they are sold or even beforehand. That will be a “lightbulb moment” when buyers realize they paid too much in the first place, he added.
Unfavorable market conditions
Despite EVs’ apparent depreciation issue, its causes might have less to do with the technology itself and more to do with market conditions.
According to iSeeCars, dramatic drops in used electric vehicle values in the U.S. have largely been driven by aggressive price cuts by Tesla amid a broader price war in the EV market.
Tesla is the dominant EV seller in the U.S. and as a result of lower prices for its new EVs, buyers are less likely to entertain the same price levels for used alternatives.
“If [Elon Musk] continues to reduce Tesla prices in an effort to stimulate sales, he’ll continue to pull the entire market down, as he did over the past 15 months,” iSeeCars’ Brauer said.
In an October earnings call, Musk defended the price cuts, emphasizing the importance of cost to consumers.
“It’s not an optional thing for most people; it is a necessary thing. We have to make our cars more affordable so people can buy them,” he said.
In the following quarter’s earnings call in January, chief financial officer Vaibhav Taneja said the company would continue to focus on its cost reduction efforts in 2024.
Since then, the EV price war between Tesla and Chinese competitors has shown little signs of letting up.
Additionally, overproduction of EVs relative to demand has created excessive supply, making it unlikely for new and used EV prices to rebound in the near term, according to Brauer.
What is an ongoing issue for the EV market, however, may be a boon for electric and combustion powered hybrids, which are showing increasing strength in new and used vehicle markets.
The average price for used hybrid vehicles fell only 6.5% or $2,135 last year — a fraction of the decline of the average EV.
“Hybrids are an excellent stepping stone between gasoline and electric cars, and I expect to see them increasing in popularity over the next 10 years,” Brauer said.
George Kurtz, chief executive officer of Crowdstrike Inc., speaks during the Montgomery Summit in Santa Monica, California, U.S., on Wednesday, March 4, 2020.
Patrick T. Fallon | Bloomberg | Getty Images
CrowdStrike shares fell 7% in extended trading on Tuesday after the security software maker issued a weaker-than-expected revenue forecast.
Here’s how the company did against LSEG consensus:
- Earnings per share: 73 cents, adjusted vs. 65 cents expected
- Revenue: $1.10 billion vs. $1.10 billion expected
Revenue increased by nearly 20% in the fiscal first quarter, which ended on April 30, according to a statement. The company registered a net loss of $110.2 million, or 44 cents per share, compared with net income of $42.8 million, or 17 cents per share, in the same quarter last year.
Costs rose in sales and marketing as well as in research and development and administration, partly because of a broad software outage last summer.
For the current quarter, CrowdStrike called for 82 cents to 84 cents in adjusted earnings per share on $1.14 billion to $1.15 million in revenue. Analysts polled by LSEG were expecting 81 cents per share and $1.16 billion in revenue.
CrowdStrike bumped up its guidance for full-year earnings but maintained its expectation for revenue. The company now sees $3.44 to $3.56 in adjusted earnings per share, with $4.74 billion to $4.81 billion in revenue. The LSEG consensus was $3.43 per share and $4.77 billion in revenue. The earnings guidance provided in March was $3.33 to $3.45 in adjusted earnings per share.
Also on Tuesday, CrowdStrike said it had earmarked $1 billion for share buybacks.
“Today’s announced share repurchase reflects our confidence in CrowdStrike’s future and unwavering mission of stopping breaches,” CEO George Kurtz said in the statement.
As of Tuesday’s close, the stock was up 43% so far in 2025, while the S&P 500 index had gained less than 2%.
Executives will discuss the results on a conference call with analysts starting at 5 p.m. ET.
WATCH: Trade Tracker: Malcolm Ethridge buys more CrowdStrike, Palo Alto Networks, Spotify and Oracle
An attendee wearing a cow costume while playing Mario Kart World by Nintendo Switch 2 during the Nintendo Switch 2 Experience at the Excel London international exhibition and convention centre in London on April 11, 2025.
Isabel Infantes | Reuters
Nvidia CEO Jensen Huang on Tuesday talked up the capabilities of Nintendo‘s new Switch 2, days before the long-awaited console is set to hit store shelves.
In a video posted by Nintendo, Huang called the chip inside the Switch 2 “unlike anything we’ve built before.”
“It brings together three breakthroughs: The most advanced graphics ever in a mobile device, full hardware ray tracing, high dynamic range for brighter highlights and deeper shadows, and an architecture that supports backward compatibility,” Huang said.
He added that the console has dedicated artificial intelligence processors to “sharpen, animate and enhance gameplay in real time.”
Huang’s comments come as Nintendo prepares to release the Switch 2 on Thursday. The Switch 2 is Nintendo’s first new console in eight years, and it is expected to be a bigger and faster version of its predecessor. The device costs $449.99.
Huang also paid tribute to the vision of former Nintendo CEO Satoru Iwata, who died before the original Switch was released.
“Switch 2 is more than a new console,” Huang said. “It’s a new chapter worthy of Iwata Son’s vision.”
WATCH: Nintendo expects to sell 15 million units of the Switch 2
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