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EV Residual Value Trap: Why Leasing an Electric Car is Often Smarter

Buy or Lease? With electric cars, the answer is often clear. Why technological rapid change makes buying a gamble.

Electric cars are the future. But is it smart to buy this future? While combustion engines held their value predictably for decades, residual value forecasts for EVs are like reading crystal balls. Why ownership becomes a risk here.

The iPhone Phenomenon on Wheels

Remember the first iPhone? It was revolutionary. But would you pay a lot of money for it today? Electric cars are evolving as fast as smartphones. Battery technology, range, and charging speed make quantum leaps every 2-3 years.

An EV you buy today could be technically obsolete ("Old Tech") in 4 years, to the point where hardly anyone on the used market wants it. Who buys a used car with 200km range today when a new small car manages 500km and charges in 10 minutes?

The 4 Big Risks for Resale

1. The Technology Leap (Solid State Battery)

Manufacturers are working feverishly on solid state batteries. If these go into mass production (expected around 2027/28), current lithium-ion batteries could suddenly lose massive value. No one will want your "old" EV then.

2. Battery Degradation (SOH)

The "State of Health" (SOH) of the battery is the great unknown. A combustion engine often runs smoothly even after 150,000 km. A battery that has lost 10-15% capacity noticeably reduces range. Buyers are terrified of this – and push the price down.

3. The Manufacturer Price War

Tesla led the way: New car prices were cut by thousands of Euros/Dollars overnight. If a new car is suddenly €5,000 cheaper, your young used car loses value immediately to the same extent. As an owner, you bear this manufacturer risk 100% yourself.

4. Political Uncertainty

Subsidies come and go. Tax privileges could fall. Every political change influences the market – and thus the value of your property.

Leasing as "Insurance" Against Depreciation

With leasing, you transfer all these risks to the bank or manufacturer.

The Deal:

You pay for usage over 3-4 years. Then you hand back the key. If the car is then only worth half as much because a new super-battery is on the market? Not your problem. That's the leasing company's problem.

Conclusion: Ownership Obliges – and Carries Risks

Buying a classic Porsche 911 might be an investment. Buying an everyday electric car is a bet against technological progress. Leasing an EV is often not only more convenient but financially safer. You buy the freedom ("option") to simply switch to the latest technology in 3 years without having to struggle with selling an obsolete model.

Is Leasing Worth It For You?

About the Author

Hi, I'm Michael. I built Carculated because I was looking for an independent calculator that honestly compares total costs incl. opportunity costs – and couldn't find one. So I had to build it myself in Excel. Now this tool is available for you too.

Send me an email

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