Low EV resale value is an old problem that has been repeatedly discussed but has proven difficult to solve. In the fuel vehicle era, a car's three-year resale value typically ranged between 60 and 70 percent. For EVs, data from just a few years ago showed 40 to 50 percent, with some niche models falling below 30 percent. This massive depreciation gap has given many consumers serious "residual value anxiety" when purchasing new cars.
The reasons for this situation are multifaceted. Battery degradation is the most direct concern. Early EVs experienced faster range decline, and battery replacement costs were nearly equivalent to half the price of a new car. Excessively rapid technological iteration is another major factor. An EV from three years ago might not even support fast charging and might have only 300 kilometers of range, while new models from the same period already exceed 500 kilometers. Additionally, the inspection and evaluation system for used EVs was virtually non-existent. Dealers were afraid to buy them, consumers were afraid to buy them, and market liquidity was extremely poor.
But in 2024, this deadlock is beginning to show signs of breaking. The most positive signals come from leading models. The three-year resale value of the Tesla Model 3 and Model Y has rebounded to 55 to 60 percent, approaching the level of fuel vehicles in the same class. BYD Seal, Li Auto L series, Zeekr 001, and other models have also performed commendably. This suggests that first-tier brand EVs are gradually shedding the "residual value black hole" label.
Three structural factors underpin this change. The first is the maturation of battery technology. The cycle life of mainstream battery cells has reached 1,500 cycles or more. Based on 400 kilometers per charge, this translates to a theoretical total range exceeding 600,000 kilometers, far beyond the usage intensity of an average household. In other words, battery degradation is no longer a prominent issue for most users in practical use.
The second is the establishment of official certified pre-owned programs. Brands like Tesla, Nio, Li Auto, and BYD have all launched official certified used car operations, providing battery health inspection reports and additional warranty services. Official backing largely solves the information asymmetry problem, allowing buyers to have clear expectations about vehicle condition just as they would when buying a used fuel vehicle.
The third is the emergence of third-party inspection and insurance products. Multiple testing agencies have introduced standardized battery health testing services, allowing consumers to obtain detailed battery reports before transactions. At the same time, some insurance companies are beginning to offer products targeting battery degradation in used EVs, further reducing purchase risk.
However, it must also be noted that the recovery of the used EV market is currently limited to leading brands. Niche models and discontinued models still face serious liquidity issues. For consumers who purchase non-mainstream brands, residual value risk remains a factor that requires careful consideration. The Matthew effect manifests even more clearly in the used car market than in the new car market.