The China Automobile Dealers Association (CADA) conducted research on electric cars in the Chinese market and estimated their residual value after 3 years of ownership. Tesla Model X led the Top 10 NEV, maintaining a maximum residual value of 68.7%.
The residual value should be characterized as a formula for determining the value of an asset that takes into account various types of depreciation. To determine this value, you need to know the initial value of the asset and the amount of accumulated current depreciation.
The residual value makes it possible to calculate the approximate price for which you can actually sell a car.
In many ways, the determining factor in calculating the residual value is the depreciation of the car. The residual value is the difference between the amount of car purchase and its depreciation.
According to experts, in the first 3 years, the loss of the value of the car from its original price is the largest.
The manufacturers themselves and their pricing policy have a big impact on the cost of a used car. If a company launches an objectively revalued car on the market, this will necessarily entail a rapid drop in its value. If the car company wants to occupy a large market share, then it produces a very affordable model. If you buy such a car, ceteris paribus, it is the owner of this car will suffer the least losses.
Also important is the massiveness of the car. Traditionally, small demand in the secondary market is observed for those vehicles that are little familiar for consumers. A man doesn’t want to risk it and is afraid of buying such a vehicle. In the event of a breakdown, it will be difficult to find spare parts, few repair specialists, non-standard components, etc.
One of the key components in the formation of residual value in the secondary market is reputation.
If you plan to buy a used car or rent a car, then a car with a high residual value will be the best option. That is, a high residual value is an excellent indicator for a vehicle.
As we all know, the main component of an electric car is a battery, which means that the quality of the battery directly affects the residual value of the car.
In April, the China Automobile Dealers Association (CADA) conducted a study of electric vehicles in the Chinese market and estimated their residual value after 3 years of ownership. Tesla Model X led the Top 10 NEV, maintaining a maximum residual value of 68.7%.
BMW X1 and X5 also entered the Top 10, but lagged behind Model X by more than 15%, with 53.3% and 50.7 respectively. BMW i3 has only 42.2% of its residual value.
Tesla Model X is able to hold almost 69% of the cost after 3 years of ownership, and this is much more than other cars, which indicates the strength of Tesla and the quality of its vehicles.
The second hand value in China, like in others country has a strongly related to the Brand value also demand of the market. This also applies to cars. And the technology of the vehicle play a major role of the second hand value. Tesla is a high-tech car in which consumers are very interested.
Featured image: U/akkellan on RedditFollow @EvaFoxU
About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.