EV manufacturers must take action on battery issues, warns Glass's
The company says it has been working closely with three of the manufacturers who will produce cars featuring in the first wave of EV launches and has also developed a proprietary methodology that has enabled it to forecast EV residual values, taking account of specific battery ownership and warranty details, as well as factors such as supply and anticipated patterns of demand.
Initial forecasts show an alarming rate of depreciation for those vehicles where the battery is owned and not covered by an appropriate extended warranty.
'After one year of ownership we would expect EV residual values to be above the segment average expressed in terms of pound values,' said Andy Carroll, managing director at Glass’s. 'But, if the battery is owned rather than leased, and lacks the appropriate extended warranty, the value of the typical EV will then fall dramatically until the vehicle is five years old, at which point the car will have a trade value little more than 10% of the list price.'
Mr Carroll says that this depreciation is a function of customer recognition that the typical EV battery will have a useful life of up to eight years and will cost some £8,000 to replace.
Manufacturers can however address this problem. Mr Carroll cites the example of an EV in the lower-medium segment. 'If the anticipated £8,000 cost of the battery in such a car were taken off the list price, and recovered instead through a long-term £100-per-month battery lease scheme, the retained value in monetary terms would make it one of the best-performing used cars in its segment, rather than one of the worst.'
Mr Carroll also advocates that, while the EV market is in its infancy, manufacturers should also consider leasing the car and battery together as a single package to bring on board early adopters and win over a sceptical buying public.
He added that this kind of lease proposition should be in place until there is wider market experience and acceptance of EV products. 'We have over a hundred years of experience of owning vehicles with internal combustion engines. Until the facts prove the manufacturers’ claims regarding battery life and performance in real world conditions, they need to put their money where their mouth is, and take all risk and uncertainty away from the end consumer.'