The UK government has set a target of 50% of new car sales to be electric by 2030.

The Residual Value Conundrum

The concept of residual value, also known as the car’s scrap value, is a crucial aspect of the leasing industry.

EVs are also more expensive than gasoline or diesel vehicles. EVs have a lower cost of ownership, however, due to lower operating costs and reduced maintenance needs.

The Rise of Electric Vehicles: A Shift in the Automotive Industry

The automotive industry is undergoing a significant transformation, driven by the growing demand for electric vehicles (EVs). As the world shifts towards a more sustainable and environmentally friendly transportation system, EVs are becoming an increasingly popular choice for consumers. In this article, we will explore the key aspects of EVs, including their depreciation, cost, and ownership costs.

Depreciation of EVs

One of the most significant challenges facing EV manufacturers is the rapid depreciation of their vehicles. Unlike gasoline or diesel vehicles, EVs depreciate much more rapidly, with some studies suggesting that they can lose up to 50% of their value within the first three years of ownership. This is largely due to the limited range and charging infrastructure of EVs, which can make them less desirable to potential buyers. Factors contributing to rapid depreciation: + Limited range and charging infrastructure + Higher upfront costs + Limited model options + Dependence on government incentives

Cost of EVs

EVs are also more expensive than gasoline or diesel vehicles, with prices ranging from $30,000 to over $100,000. However, despite the higher upfront costs, EVs have a lower cost of ownership due to lower operating costs and reduced maintenance needs.