Battery Questions Complicate U.K. Used-EV Market

Automakers who introduce a battery-lease scheme for used electric vehicles would see a dramatic sales uplift, a U.K. auction company says.

But presently, Shoreham Vehicle Auctions says, a lack of information released by manufacturers about EVs in the used market is affecting both resale values and dealers’ confidence in stocking used electrics.

With no specific short-term battery loans or warranties available and automakers saying only the battery will last the life of the car, dealers are concerned about harm to their reputations and relationships with customers should something go wrong.

Shoreham questions why a dealer would sell a 4-year-old EV for £8,000 ($13,690) knowing that after 12 months the buyer will have to spend the same amount on a new battery.

Early adopters selling their cars are experiencing low residual values when selling or trading in their EVs. Shoreham says leasing companies, who rely on residual-value predictions to help them calculate monthly contract-hire rates, are writing down EVs to zero at the end of a 3- or 4-year contract because of the secondhand uncertainties.

Shoreham Managing Director Alex Wright says the main reason for this low resale value and dealer anxiety is automakers providing too little information about the cost of maintaining or replacing batteries when a car hits the market at between 4 and 10 years of age.

“Residual Values (RV) are based on market confidence and by introducing flexible and affordable battery-lease schemes in line with the price bracket of the vehicle on the forecourt, we believe manufacturers will protect residual values and gain the final thread of confidence to make EVs a long-term success in this country,” Wright says in a statement.

The cost of a new replacement battery of £8,000 to £10,000 ($13,690 to $17,115), he says, far exceeds the likely value of a used electric car.

“The new-electric-car market is growing, but manufacturers must look to when these cars move into the secondhand market,” Wright says. “And if they look after the needs of the used-car buyer of 7- to 10-year-old models, then the longer-term needs of buyers of 3- to 5-year-old cars will look after themselves.”

Ensuring used buyers are given adequate information and support will ensure the market continues to grow, he says.

“The benefits of electric vehicles are plentiful and with customer perceptions changing for the good, manufacturers need to act quickly to ensure this level of positivity continues,” Wright says.

Although EVs’ build quality isn’t in question, as with any battery, over time their charge-storage capacity lessens through erratic use and fast charging, which shortens the cars’ range, he says.

“Manufacturers must launch a flexible leasing and warranty scheme for when batteries reach the end of their optimal life,” Wright says. “Offering a scheme where batteries can be replaced and leased for £40 to £100 ($68 to $180) a month would immediately give drivers peace of mind and boost new and used sales.”

Wright says reconditioned batteries in line with the demand for older and less-expensive used EVs also should be a consideration. However, these won’t be available until market growth creates a demand for them. 

U.K. sales of new EVs are up 246% year-on-year, helped by improved charging infrastructure, a £5,000 ($8,557) government subsidy and a change in the public perception of range anxiety and environmental protection.