ANALYSIS: Charging, Resale Among Added Hurdles Slowing EV Adoption
The near-term challenges of mass EV adoption inevitably begin with price, but a recent cold snap has re-emphasized battery and charging snags.
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A woman prepares to charge her Tesla in Ann Arbor, Michigan, on Jan. 17, 2024. A cold snap across the United States and Canada has exposed a big vulnerability for electric vehicle owners. (AP Photo/Carlos Osorio)
The near-term challenges of mass electric vehicle (EV) adoption inevitably begin with price, but a recent cold snap has re-emphasized battery and charging snags. In addition, as prices for new EVs trend down, new buyers also have to consider potentially lower resale values.
Tom Narayan, lead equity analyst covering global autos at RBC Capital Markets, told BNN Bloomberg on Jan. 31 that the EV market is going through a bit of a slowdown.
“Price of the car—that’s one of the main reasons why people aren’t buying EVs right now. Another reason is range anxiety, because public charging isn’t as good. Or at least psychologically people don’t think it’s as good,” he said.
Mark Fields, former president and CEO of Ford Motor Co., told CNBC on Jan. 26 that some of the more widely discussed consumer concerns about EVs have typically revolved around the charging network, repairs, and insurance costs.
However, “One of the bigger things that’s emerged for consumers are the residual values, because they performed very poorly—EVs overall and residual values,” he said.
The residual value is an estimate of a car’s worth a number of years in the future based on its original manufacturer’s suggested retail price (MSRP). It can provide a rough ballpark for resale value.
Mr. Fields explained that poor residual values are related to Tesla’s aggressive price cuts and thus consumers think their EVs will eventually be worth a lot less.
Used EV Market
A car’s projected residual value is the largest component of its lifetime ownership cost.
“Most consumers don’t even think about it,” said Daniel Ross, senior manager, Industry Insights & Residual Value Strategy at Canadian Black Book (CBB), a Markham, Ontario-based company that tracks and forecasts used vehicle prices.
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