Electric vehicles (EVs) are among the fastest-depreciating cars that you can purchase in South Africa today.
A quick search on pre-owned sites like AutoTrader will reveal multi-million rand options selling for as much as a 45% price reduction, but the reasons for this poor resale margin have more to do with market conditions than a lack of interest.
Expensive assets
According to AutoTrader CEO George Mienie, the average price of a used EV on the site dropped to R1,124,347 as of July 2024, reflecting a 6% year-on-year decline.
While this may sound like a substantial sum, it is important to note that South Africa’s catalogue of EVs is very limited by global standards, as the majority of brands have thus far opted not to introduce their more affordable options here.
Consequently, the roster of EVs has been predominantly populated by high-end models from premium brands such as BMW, Mercedes-Benz, Audi, Jaguar, and Porsche as an option for early adopters with the funds needed to try out the new technology.
Prominent EVs in South Africa include the Porsche Taycan, Jaguar I-Pace, Audi e-tron, Mercedes EQS, and BMW IX, all of which command a price tag in the millions of rands.
At the time of writing, a new Jaguar I-Pace will set its owner back R2,465,000, but it is possible to find one listed on AutoTrader for as little as R789,900.
Admittedly, this model is four years old with a mileage of 73,000km, but the site also has a 2024 unit with just 1,831km on the clock, which is listed for R1,349,900 – a 45% decrease from its manufacturer-suggested retail price (MSRP).
Another example is the BMW i3, which is one of the only EVs in South Africa that can be bought for less than R500,000.
A report from MyBroadband found that the most affordable price for a used i3 in July 2023 was R399,900, but this sum dropped to R329,950 by March 2024.
It also noted that a BMW listed on WeBuyCars had its price cut by R23,000 in a single month, going from R310,000 to R287,000.
There are several reasons as to why these models have experienced such a steep drop in value, though not all of them are because of their electrical underpinnings.
Luxury brands like Jaguar or BMW tend to see a harsher penalty to their resale potential than mass-market badges like Toyota or VW, and factors like mileage will lower the value of any car regardless of its powertrain.
The rate at which electric cars depreciate is also not unique to South Africa, as European and North American publications have reported on the same phenomenon, meaning that local issues like load-shedding are far less significant to the perceived utility of an EV than some may initially assume.
A far less obvious contributor to the drop in value of certain EVs actually concerns the introduction of new, relatively affordable options.
AutoTrader has noted a 45% increase in EV listings on its platform since 2023 and used EV sales even saw a 78% jump year-on-year in June 2024.
Mienie attributed the depreciation of legacy models like the BMW i3 and Jaguar I-Pace to the recent launch of cheaper options like the GWM Ora and BYD Dolphin.
The lack of affordable models up till now has meant that electric transport has effectively been gate-kept behind million-rand price tags that are out of reach to most citizens.
However, this barrier to entry has been consistently lowered over the last year thanks to units like the Volvo EX30 and the Dayun Yuehu S5 – the latter of which is now the country’s most affordable wall-powered passenger car with its sticker of R399,900.
Mienie said that he expects EV sales will continue to grow in South Africa, but that mass adoption is still a ways off.
“As it stands, EVs are still far too expensive for the average South African,” Mienie said.
“While EV enquiries and sales continue to grow, this growth in demand is clearly slowing.”
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