Electric vehicles are holding their value better than expected, a shift that is turning the industry's long-held anxiety about rapid depreciation on its head. The appeal of EVs is increasingly financial as much as environmental for many drivers, according to asset sales company Pickles Auctions.
The trend was highlighted at a Pickles auction in late March, where 40 BYD vehicles, splattered after a concrete spray incident but repairable, drew a bidding frenzy. Insurers had sent the cars to auction to recoup costs, but with fuel prices soaring in response to the US and Israel war on Iran, demand surged.
“We had thousands of buyers trying to bid on about 40 cars, so just the prices we generated were incredible,” says Brendon Green, the general manager of automotive solutions at Pickles. “The amount of views that we got on those cars, the bidders that registered and the amount of bids that we took were extraordinary compared to what we would typically see.”
Salvage EVs fetch premium prices
The shift is also evident in written-off vehicles. Salvage EVs, with pre-accident values of up to $40,000, fetched substantially higher auction prices than comparable combustion models, the auction house says. Written-off EVs sold for spare parts and second-life batteries achieved 16% higher sale results than petrol equivalents, while repairable write-offs generated a 71% price premium.
While EVs and hybrids have been gaining traction for years, the Iran conflict and associated enduring oil price rise accelerated demand in March, and it has continued largely unabated. More EVs than petrol-only cars were sold in September, according to Federal Chamber of Automotive Industries data, supported by an influx of Chinese auto brands offering low-priced EVs.
Demand driven by running costs
Rob Chan, the managing director of car rental marketplace Turo Australia, says customer demand for EVs and hybrids has rocketed, with bookings growing at 28 times the pace of petrol and diesel over the past year. In response, Turo “hosts” are buying secondhand EVs to meet that demand. “A lot of hosts are on auction sites or on sales sites looking for more inventory because they know that this rising tide is lifting all the boats,” says Chan. “They’re looking for EVs because the demand is there.”
The secondhand demand for used EVs is supported by their better-than-expected battery life, according to Pickles, which has tested more than 2,750 used batteries. It has found that five-year-old EVs tend to retain a battery life score of 93%, referring to their charge capacity. Even high-mileage former ride share vehicles with more than 230,000km on the odometer are rated at about 89%.
The results challenge earlier concerns that an EV would run out of battery power after about a decade, making them near worthless. Pickles is finding that even old batteries running at just 60% would have some value for people looking for a used car for regular short trips.
Cost-of-living over climate
While many early adopters purchased electric vehicles for environmental purposes, the falling sticker prices and cheaper running costs have made them mass market. Aman Gaur, head of policy at the Electric Vehicle Council, says some of the suburbs with the highest EV uptake are in outer-suburban commuter hubs like Tarneit, 30km west of Melbourne’s city centre. “For most buyers, it is no longer a climate issue, it is very much a cost-of-living issue because it is one of the best ways you can save money,” says Gaur. “But it might be comforting for them to know that EVs also have a higher residual value based on the value of the battery, whereas a 15-year-old [internal combustion engine] vehicle is just scrap metal.”
That shifting economic landscape means the heavy secondhand price discounts once associated with early EVs are disappearing, replaced by robust resale values. The broader transition is not without friction, with charging infrastructure lagging behind the surging buyer demand, according to the EV council. Australia’s nascent battery recycling and mineral processing industry also needs to advance.
Andrew Chadwick, a lithium battery repair specialist, says he suspects the demand for secondhand EVs is being mainly driven by their lower running costs. “I’m a huge fan of EV adoption because the technology is so much more simple than an [internal combustion engine] vehicle,” says Chadwick. “I’m a massive petrol head, and I love a little turbo, but in terms of practicality and reliability and running costs, ICE [internal combustion engine] is awful. An equivalent EV will be worth more over the long term because there are fewer parts to go wrong.”
