EVs fare better in the resale market. Just don't compare them to ICE cousins.
Mint shows that the depreciation rate—the rate at which a product loses value—of electric vehicles entering the used-car market is slowing down, with some models holding onto their value better than expected. The Tata Nexon EV, a popular choice among Indian consumers, has seen its depreciation rate drop significantly—from about 51% in 2020 to 26% in 2023, according to data sourced from auto intelligence firm JATO Dynamics. The Nexon EV is Tata's first electric car, and was launched only in 2020, which means the resale market for these vehicles, compared to the legacy internal combustion engine (ICE) vehicles, is relatively nascent.
Resale values are critical to car buyers because they directly impact the long-term cost of ownership, offering a cushion against depreciation losses and making the initial investment in a vehicle more financially viable. Tata's Nexon EV accounts for the largest share of the used EV market in India (not including fleet models). Despite a decelerating depreciation, there is a crucial caveat that customers perhaps need to be wary of.
EVs in India are still depreciating faster—twice as fast—than their ICE counterparts. While the depreciation rate for Nexon EV fell considerably in 2023, it still remains nearly double that of its petrol and diesel siblings. Compared to a value-erosion rate of 26% for the Nexon EV, its petrol variant depreciates by 13.84% a year and diesel version by 14.86%.
“The used EV market is likely to closely mirror the new EV market with a lag of 3-4 years, as early adopters upgrade to longer-range and more advanced EVs," a Tata Motors spokesperson said. “We expect to see increasing volumes of used EVs in India over the next 2-3 years developing their own customer base. Used
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