Why EVs have really poor resale value in Australia. Tesla, BYD and MG prices are falling faster than rivals

Electric vehicles have much poorer resale value than popular petrol and diesel cars because motorists still have range anxiety, Australia’s biggest car auction company has revealed.

After two years, fully electric Chinese-made cars from Tesla, BYD and MG are holding little more than half their brand new price.

By comparison, the most popular diesel utes and four-wheel drives from Toyota and Ford are holding on to more than 85 per cent of the showroom value despite Federal Government plans to dramatically reduce the number of new, polluting vehicles within the next five years.

Range anxiety

Brendon Green, the general manager of automotive solutions with car auction company Pickles, said prospective buyers of second-hand cars were worried about recharging an EV.

“There’s still a little bit of range anxiety, ‘How am I going to charge?’, that is still playing in the back of some people’s minds when it comes to EVs,” he told The Nightly. “There’s still a probably a little bit of resistance holding some of that market back.”

This was also making them reluctant to bid on a used EV at auction, making internal combustion engine cars the overwhelming favourite of buyers.

“EVs aren’t holding the value that the ICE cars are at the moment,” he said. “It’s hard if you’ve got less bidders on those particular assets to generate the same sorts of returns.”

Poor resale

But a political boycott is not the only reason for Tesla’s sluggish second-hand sales, with BYD and MG also having similarly poor resale values.

The Tesla Model 3 kept just 54 per cent of its value after two years, with Pickles and Datium Insights data showing an average used price of $35,284.

Tesla’s Model Y, also made in Shanghai, retained 58 per cent of its value with an average second-hand price of $40,332.

The Chinese EV brands did even worse with the fully electric MG4 keeping just 50 per cent of its resale value, for a bargain used price of $23,195, despite having low average odometer readings of 14,103km.

The BYD ATTO 3, from the world’s biggest producer of EVs, kept 54 per cent of its new car price, typically fetching $27,273 at auction.

But Sydney doctor and YouTube personality Tom Gan, a father of two teenagers, said was he pleased with this year getting $47,000 for selling a 2023 BYD Seal.

This marked a 78 per cent resale value for a Premium model, in the range, that sold new for $59,931 without NSW Government rebates.

“I was pleased considering the doom and gloom you hear about EV depreciation in the news,” he told The Nightly. “Price it correctly they will come knocking.”

Bowser blockbusters

The big four-wheel drives targeted by Labor’s New Vehicle Efficiency Standard still have some of Australia’s best resale values.

The Toyota LandCruiser, which emits 200 grams of carbon per kilometre, kept an astounding 88 per cent of its resale value after two years. It had an average second-hand price of $108,750 even with higher average odometer readings of 49,900km.

The Toyota RAV4, available with petrol and hybrid motors, also kept 88 per cent of its value with an average used price of $40,018.

The Toyota HiLux kept 85 per cent of its value, for an average second-hand price of $46,838, while the Ford Ranger, another diesel ute, kept 76 per cent of its new price, for a typical used value of $51,100.

Ford now sells a plug-in hybrid version of the Ranger that can tow 3.5 tonnes like the common diesel version.

Mr Green said Australian motorists will wanted a four-wheel drive or a ute with strong towing capacity and would be more willing to embrace hybrids before they went for something fully electric.

“Australians embrace vehicles that are very much suited to their lifestyle,” he said. “The hybrid utes will probably be coming first. I want to tow my boat down the South Coast of New South Wales on a regular basis therefore I need a car that is capable of doing that.”

EV incentives

Fully electric vehicles make up just eight per cent of new car sales despite a series of generous tax breaks, including novated leases where running costs and financing can be claimed on tax.

Employers are also spared from having to pay a fringe benefits tax if they offer a staff member a salary sacrificed EV under the $91,387 luxury car tax threshold for fuel-efficient vehicles.

Despite this, EVs make up just two per cent of used cars that Pickles sells at auction, with fleets typically selling vehicles after two years.

The auction house is now offering battery health scores on used EVs in a bid to entice hesitant consumers.

“There’s a perception out there — ‘Maybe I do have to spend 10 or 15 grand on a battery’. You don’t,” he said.

He is also confident EVs will make up a bigger proportion of used car sales in coming years as the Federal Government’s New Vehicle Efficiency Standard aimed to slash passenger car emissions by 59 per cent by 2029 with penalties levied on car companies that sold too many petrol and diesel models.

Labor’s new 2035 climate target could see even more stringent emissions standards under a plan to slash carbon emissions by 62 to 70 per cent within a decade.

“The market for used EVs is growing all the time. A lot of people want to move into them,” Mr Green said.