[ClarksonCote]

One has to wonder... Once a manufacturer makes 200,000 plug ins and the $7500 tax credit eventually expires, will the resale values of used plug-ins actually increase a bit?

Perhaps not a full $7500, but a big reason for their depreciation is the tax credit. Once it expires it wouldn't surprise me if resale values actually increase a bit, maybe by $2-$3k.

What say you?

 

[bjrosen]

One has to wonder... Once a manufacturer makes 200,000 plug ins and the $7500 tax credit eventually expires, will the resale values of used plug-ins actually increase a bit?

Perhaps not a full $7500, but a big reason for their depreciation is the tax credit. Once it expires it wouldn't surprise me if resale values actually increase a bit, maybe by $2-$3k.

Unless the law is changed there is going to be an interesting distortion in the market which will favor the late comers over the pioneers. Tesla may of already used up their 200K credits, or at least they must be very close. GM and Nissan will have used up all of their credits by the end of this year or early 2018. The laggards are all promising EVs in 2020, when all of the pioneers have used up all of their credits, which will mean that a VW EV or a Toyota EV will have a $7500 advantage over a Tesla, Chevy or Nissan. The newcomers will enjoy four or five years of advantage which will have the effect of punishing the leaders and at the same time keeping used EV prices down because the price of newer more advanced EVs will still enjoy the tax credit.

 

[ClarksonCote]

Unless the law is changed there is going to be an interesting distortion in the market which will favor the late comers over the pioneers. Tesla may of already used up their 200K credits, or at least they must be very close. GM and Nissan will have used up all of their credits by the end of this year or early 2018. The laggards are all promising EVs in 2020, when all of the pioneers have used up all of their credits, which will mean that a VW EV or a Toyota EV will have a $7500 advantage over a Tesla, Chevy or Nissan. The newcomers will enjoy four or five years of advantage which will have the effect of punishing the leaders and at the same time keeping used EV prices down because the price of newer more advanced EVs will still enjoy the tax credit.

Regarding the law, most people I've spoken with seem to think it will sunset after one manufacturer reaches the mark, rather than extending the benefit to each manufacturer, thereby rewarding the laggards

Assuming that it does sunset when the first manufacturer reaches the limit for ALL manufacturers, what do you think might happen to resale values of used EVs? Will they stay the same or increase a bit?

 

[bro1999]

They should have put some language in the original law that added a sunset date for ALL manufacturers once the first manufacturer hit the 200k mark. Seems silly that the knuckledraggers (Ford, FCA, etc...) would get to enjoy the benefit even after the ones "paving the way" (GM, Tesla, Nissan) exhaust their tax credit allocations.

 

[BAZINGA]

They should have put some language in the original law that added a sunset date for ALL manufacturers once the first manufacturer hit the 200k mark. Seems silly that the knuckledraggers (Ford, FCA, etc...) would get to enjoy the benefit even after the ones "paving the way" (GM, Tesla, Nissan) exhaust their tax credit allocations.

Do we expect politicians to do the right thing? Hell do they even know what the right thing is? My guess is GM/Tesla/Nissan will have to hire a couple dozen hookers, several private jets, access to the owners suite at every major sporting event in NA and possibly several pounds of COCANE to get them to sponsor legislation to fix this fair and equitably.

 

[bjrosen]

Regarding the law, most people I've spoken with seem to think it will sunset after one manufacturer reaches the mark, rather than extending the benefit to each manufacturer, thereby rewarding the laggards

Assuming that it does sunset when the first manufacturer reaches the limit for ALL manufacturers, what do you think might happen to resale values of used EVs? Will they stay the same or increase a bit?

Assuming that it sunsets, or is killed altogether, then there should be a modest positive effect on resale prices but they will still be lower than equivalent ICE resale prices. EVs are more like a phone than a traditional car because the technology is improving at a fast clip so even cars that are only a few years old are obsolete. ICE cars got good enough many decades ago. The rate of improvement was barely perceptible even on a decade time scale so the depreciation was just of function of the car wearing out. With an EV the battery range on a car that's just a few years old is much less than the range of the current model. On top of that the battery is guaranteed to wear out eventually, sooner if it's a Leaf, later if it's a Volt, but at some point it will have to be replaced and it will be prohibitively expensive. The battery in the Bolt is $9000. That price will drop for newer models but it will remain the same for specific models. If you were to buy a Bolt today the price for the replacement battery will be $9K * GMs markup in 2027, there won't be an option to use a 2027 Bolt battery pack and there won't be any third party batteries available either so the car will have to be scrapped. A 20 year old ICE car can be repaired and if you do it yourself it might even be worth it, there won't be any 20 year old EVs ane not a lot of 10 year old EVs because they will all be scrap when their batteries wear out. I'm not sure that will always be true, I assume the market will eventually figure out how to provide replacement batteries, but that can't happen until the technology stabilizes so iff the near term EVs are going to depreciate faster than ICE cars.

 

[Dutch]

I genuinely do not know what the effect will be on resale prices.

However I have been impressed at the influence the tax credits have had in terms of getting EV/PEHV a toehold into the general public consciousness. I wouldn't have bet on it's success when the plan was unveiled.

 

[jsmay311]

You'd expect used sale prices to increase a bit.

HOWEVER, the tax credit doesn't disappear overnight. It phases out over 15-18 months. So any effect on resale will be gradual.

AND, as one automaker's credits phase out, they'll have to lower new vehicle prices at least somewhat to remain competitive, reducing the effect on used prices.

AND, the EV market is more than one company. You can't assume that a prospective new Volt buyer will necessarily switch to a used Volt after the tax credit phases out, pushing up the used Volts' value. They might buy a new Nissan or Ford or BMW or Toyota (or any other company with the full $7500 credits available) plug-in instead. That wouldn't help used Volt prices.

 

[jsmay311]

Tesla may of already used up their 200K credits, or at least they must be very close. GM and Nissan will have used up all of their credits by the end of this year or early 2018.

Not quite.

Based on InsideEVs Plug-In Sales Scorecard, here are the US sales by automaker through the end of 2016 (and 2016 sales):

GM: 123,964 (28,887)
Tesla: 111,949 (47,644)
Nissan: 103,578 (14,006)
Ford: 83,701 (24,796)
Toyota: 47,239 (2,474)
BMW: 36,043 (16,107)

Also, don't forget the phase-out periods.

 

[Coppersnowboarder]

Battery prices are dropping every year. I bought enough used vehicles to know that installing a new engine in an older vehicle, just like installing a new battery pack in an older vehicle, will prevent Volt bodies from being scrapped when one battery pack loses reasonable viability. Furthermore, I think the generator will still function with a diminished battery pack to create a vehicle that still beats the fuel economy of internal combustion engines. Think of a old, used, battery-weak Volt as a college student's first vehicle.

 

[Bacardi]

Long story short, depends on what the Volt is offering in terms of range/features/price once the tax credits totally exhausted...

The MY17 Volt has 3.6KW charging, 53 miles of range, 42mpg and the LT doesn't have the C1/C2 safety features...

So let's say the tax credit exhausts in 2020, what will the specs be in the MY21 Volt? What if it has 7.2KW charging & 350KW DCFC optional, 75 miles of range, 50mpg and C1/C2 standard in the LT? I suppose for the old school folks it wouldn't matter yet at the same time, they'll most likely prefer the even cheaper Gen1 anyways...

 

[rmay635703]

I would argue resale depends on how much above. $4 a gallon you are

 

[Flux Capacitor]

They should have put some language in the original law that added a sunset date for ALL manufacturers once the first manufacturer hit the 200k mark. Seems silly that the knuckledraggers (Ford, FCA, etc...) would get to enjoy the benefit even after the ones "paving the way" (GM, Tesla, Nissan) exhaust their tax credit allocations.

I didn't go looking for it again, but I do seem to recall (fuzzily) some info from a few years back...If memory serves, originally, as written the law was written to reward pioneers (something like credits for everyone until a total amount have been sold across all manufacturers - then the credit phased out for everyone. I THINK the total originally was for the first 1 million sold from anyone - but don't quote me on that number). This of course is much more fair, as pioneers sell more cars before the limit is reached than the laggards. Unfortunately, as often happens with decent legislation (practically an oxymoron), it was re-written/edited before final passage, making it this unfair/stupid way of every manufacturer gets to sell 200,000. I think your average middle schooler would know this punishes the risk takers & rewards the fence sitters (and is bad mojo), so I personally believe it was a lobbying/bribery thing in the final bill (most reasonably from the laggards' side)