China is the
world’s largest
electric vehicle
(EV) market.
They have built up a huge
manufacturing capacity,
thanks to generous
government incentives.
The China Passenger
Car Association listed
several reasons why
the EV value retention
is “too low” for fully electric
and hybird gasoline / electric
vehicles.
Except for Teslas.
Certain models
are not reliable
and are
“simply worthless,”
the association said.
" ... the lifespan of electric car
components and batteries
are still inferior to that
of similar components
for traditional vehicles."
Chinese electric vehicle sales
are starting to contract along
with traditional vehicle sales
( that have been falling
for more than a year ).
Sale of EVs and hybrids
fell 16% in August 2019,
following a 4.7% drop
in July 2019, after
the government
scaled back subsidies,
according to the China
Association of Automobile
Manufacturers.
According to
a report in Quartz,
a Tesla’s residual value
at one year is more than 70%
of its original price, far higher
than the value of any
Chinese EV model
at the same mark.
Government subsidies
have created a lot of
Chinese EV manufacturers.
The Chinese EV with the
highest residual value
at one year was a
sports utility vehicle
from Roewe, a subsidiary
of state-run SAIC Motor,
while for many popular
brands it’s under 35%.
The residual value of a
gasoline car can stay
at about 60% to 75%
even after three years.
The primary problems
that cause very low
residual value:
(1)
The limited range of the
first generations of EVs,
(2)
Consumers reporting
frequent repairs, and
(3)
Poor after-sales service.
Most of second-hand EVs
on sale in China are
two to three years old,
with a typical battery range
of just 200 km (124 miles),
and warranties on those cars
have often expired.
Consider
a three-year-old
Tesla Model S
with a 480 km range
(300 miles)
with mileage of
38,000 kilometers
(about 24,000 miles)
listed for 475,300 yuan
(US$66,908)
on Tesla’s own
Chinese web site, for
nearly 60% of the price
of the current Model S,
with a range of 660 km.
Consider a Guazi, BYD’s
popular compact SUV,
Song, an EV that listed for
119,800 yuan
($16,903),
which is only 40% of its
original price in 2017 !