I’ve NEVER Had a Vehicle Depreciate This Fast In All My Life, And EV Depreciation Crisis Isn't Unique To Tesla, Yet Here’s How to Avoid Losing Your Shirt On an Electric Vehicle

Before we go too far, let us remind readers that if you wish to drive a battery-electric vehicle (BEV) lease an EV. Don’t buy one. We think EVs drive well, and we understand the allure of a reduced carbon footprint. This story will not disparage the driving enjoyment or ownership experience of EVs. Rather, we will highlight that EVs have awful depreciation, prove it is not a new trend, and provide evidence that Tesla is just one of many brands that suffer from this malady. 

EVs Have Long Suffered From Heavier Depreciation Than Other Powertrain Types
The first part of EV depreciation we need to clarify is that poor value retention by EVs has been going on for more than a decade. It’s not at all new. When the Tesla Model S debuted, owners had serious concerns that its depreciation would make it a bad value. Elon Musk went so far as to guarantee the resale value would be equivalent to the Mercedes-Benz S-Class. This helped buyers to get over the worry. It’s a shame that this program is no longer in effect. My colleague and friend Kyle Conner of Out of Spec Reviews lost nearly six figures in retained value in just two years on his personal Tesla Model S car recently. 

Torque News noticed this trend early on, and we covered it closely. As far back as 2014, we did a spotlight story showing how the battery-electric Nissan Leaf had a 42% worse depreciation than the hybrid-electric Toyota Prius. 

As time passed, Torque News followed this topic and continued reporting on high EV depreciation. In 2019, we did a story that showed how many new EVs, including the Ford Fusion Energi, BMW i3, and Chevy Volt (extended range EV), all earned spots on the shameful “10 Worst Cars For Depreciation” list. 

EV Owners Know the Resale Value Is a Problem
Here are some comments we harvested from various electric vehicle clubs online:

• M.A., Tesla Model 3 - “115K on my 2018 Model 3…love the car, but the resale value (insert profanity here)!
• B.H., Model 3 - “Don’t be surprised to see low to sub $20k offers. Used Model 3 values are way down.”
• C.W., Tesla Model Y - “Currently in a Model 3 and looking to move into a Model Y. The depreciation on the Model 3 has been atrocious, as with many EVs. I absolutely love the car, but the rapid depreciation has far outweighed any type of EV-related savings.”
• E.N., Model Y - “Does this make anyone never want to buy a Tesla again...? No, it was not an investment. But I have never experienced car depreciation so hard.”
• B.E., - “Every time I see how cheap these are going for now it makes me sick. My MYP was 74k almost 2 1/2 years ago.”
• J.L., Model Y - These cars are dirt cheap with no resell value. Why would anyone buy a used one?”
• C.A., Model Y “I know a guy that (recently) paid in the $70’s for one…literally half the price now.”
• L.R., Volkswagen ID.4 “My ID.4 depreciated 30% in less than a month with only 30k miles on it. I bought it used with 28k miles for $27K and now I could get around $19K for it. $9K wiped off in depreciation. I have an ICE ca,r and it doesn’t depreciate this fast. Crazy how the value goes down at the 30K mile mark.”
• A.M., Volkswagen ID.4 - “I purchased my ID.4 one year ago today. I paid $52,700. It’s now valued at $28,600.  I’d say the depreciation is a killer.”
• W.W, Hyundai Ioniq 5 - “Just got rid of my Ioniq 5...lost so much money....but the infrastructure is just not there.”
• E.W., Ioniq 5 - “I've owned my ‘23 Limited AWD exactly one year today. My Ioniq 5 is now valued by Carfax at only 55% of what I paid in cash for it: a huge, early depreciation. (edited for brevity)”
• G.G., Ioniq 5 - “I had $12,000 down payment on my 2022 Limited AWD, and I'm still upside down. I'd love to trade it for 2025, but I'm not willing to lose thousands in equity in the process. I have NEVER had a vehicle depreciate this much in so little time.”

The Fastest-Depreciating Cars In 2025 Are Nearly All Battery-Electric Models
Moving up to the present day, nearly all of the cars on the list of vehicles losing value the fastest are battery-electric according to iSeeCars. There are a couple of luxury models there as well, but many of the EVs are downright mainstream in terms of volume and pricing. The Porsche Taycan EV is the worst. Tesla’s Model S, Y, and 3 all make the list, as does the Hyundai Kona and Kia Niro EV. 

Tesla Losing Value the Fastest
The brand with the overall largest price drop is Tesla according to iSeeCars. We can address the elephant in the room now. Tesla vehicles were already getting killed on resale value years ago, but then two big changes happened. First, Hertz discovered that EVs don’t work well as rental cars for many reasons. Hertz didn’t like the economics of EVs, and many first-time renters had a bad experience with the Tesla they rented. It turns out simple is better with rentals for exhausted travelers arriving late at night in unfamiliar places. Who would have guessed?

Next up, the cringey salute and DOGE project by Tesla’s leader, Elon Musk, is driving people away from his brand. Some customers are even having trouble trading in Tesla cars - to Tesla! When your own brand won’t accept its own vehicle back in trade, you know things are off the rails.

Leases Are Going To Flood the Used EV Market in a Year or So Destroying Used EV Values
In order to keep electric vehicles moving off of dealer lots, every brand has resorted to extreme discounting and other incentives. Yes, even Tesla offers zero-interest loans and deep discounts on new vehicles now, just like every other new car dealer does. Most types of vehicles are discounted depending on market circumstances, but EVs are way ahead here. We spoke to the CEO of Hyundai America, who told us that a whopping 80% of EVs are now leased. 

Leases generally run for three years or so. The deep discounting and lease promotions started in late 2023. This coincided with a slight uptick in EV deliveries. When all of these leases are mature, many owners will turn the vehicles in. When that happens, a new flood of EVs will suddenly appear on the used market, driving used EV prices and EV values even further down. 

Low Lease Prices on EVs Make Used EVs Worthless
Another way that giveaway lease deals on new EVs destroy the resale value of older ones is simple math. If a 3-year lease costs a new car lessee just $5K for three years, buying a three to five your old used electric vehicle for $15K to $20K is simply terrible economics. This is made worse by the fact that used car finance rates are about 50% higher than the finance rates on new vehicles. For example, 9% for used vs. 6% for new. Please forgive the “Percent of a percent” example, but it illustrates the point that the rate is much worse, making monthly payments for the used vehicle much higher than lease or new car finance options. 

EVs Are Rapidly Evolving - Pushing Used Values Lower and Lower
This may seem crazy, but as recently as last year the super-high-tech Hyundai Ioniq 5, our favorite overall EV, still required a cord to run Apple CarPlay and Android Auto. It was “fixed” for 2025, years after Elantra owners were rocking wireless Android Auto and AppleCarplay. Hyundai also added a rear wiper after many owners went nuts complaining about not having one. Its little things like these that still plague EVs. They are not fully matured yet. Add to this ever-improving battery technology, and you can see why used EVs don’t shine as brightly as new ones. 

The New Charger Standard
As if the little things were not enough, the way we plug EVs into DC chargers just changed. Out goes the old CCS standard that everyone but Tesla used, and in comes the new NACS standard that former Tesla lovers wanted. In a few years, nobody is going to want the old charging port. Nobody wants to fuss with adapters. Today’s EVs still selling with CCS ports are tomorrow’s EVs with CHAdeMO ports. What? You don’t know what a CHAdeMO port is? See?

How To Avoid Crushing Devaluation When “Owning” an EV
In order to avoid losing your shirt on an EV, don’t own one. Lease instead. Take advantage of automakers’ desperation to keep the EV segment from collapsing and find a lowball lease deal. This also allows you to sidestep any battery issues and any responsibility for mechanical failures of any kind. You enjoy a fixed cost of ownership. 

Another option is to sidestep all the hassles of battery-only vehicle ownership and buy a hybrid-electric vehicle. Hybrid-electric vehicles are tied with conventional vehicles for the best value retention overall. While EVs are nosediving in valuation, the Prius and CR-V Hybrid saw value increases year over year. 

Conclusion - Used EVs Have Low Value Because They Are Not Good Deals
As you can see, used EVs make little sense when a new lease makes the math unfriendly. Couple that with higher financing rates for used EVs, and you’d have to be crazy to buy a used EV. Tesla is the brand with the worst used EV values, and most of its models make the top-ten fastest depreciating vehicles list. While it would be easy to blame all of this on Elon Musk, the truth is that all EVs have terrible value retention, and nothing being done today will reverse this fact anytime soon. 

Have you compared the cost of a used EV against the cost of a new Leased EV? What did you find?

Are you a Tesla owner dismayed to find your vehicle has lost an obscene level of value or won’t be accepted as a trade by Tesla? Tell us in the comments below. 
 

Image of Tesla dealership in Massachusetts by John Goreham. Chart of fastest-depreciating vehicles courtesy of iSeeCars. Chart of hybrid value retention by model courtesy of iSeeCars.

John Goreham is a credentialed New England Motor Press Association member and expert vehicle tester. John completed an engineering program with a focus on electric vehicles, followed by two decades of work in high-tech, biopharma, and the automotive supply chain before becoming a news contributor. He is a member of the Society of Automotive Engineers (SAE int). In addition to his eleven years of work at Torque News, John has published thousands of articles and reviews at American news outlets. He is known for offering unfiltered opinions on vehicle topics. You can connect with John on Linkedin and follow his work on his personal X channel or on our X channel. Please note that stories carrying John's by-line are never AI-generated, but he does employ grammar and punctuation software when proofreading and he also uses image generation tools.