Luxury EV Sedans are Depreciating Fast
It seems like luxury EV sedans have a serious depreciation problem. When looking at the Lucid Air, Tesla S Plaid, or the Mercedes EQS - all those models suffer from over 30% depreciation in their first year. This provides a great opportunity for buyers looking to get one of these models on the used car market for a bargain over their list price. Let's dive deeper into what kind of deals you can expect on luxury EV sedans.
Used car market for Lucid Air
The Lucid Air is a relatively new entrant to the luxury EV space. However, it is already dropping its MSRPs aggressively to boost sales and fight off competition. The recent price drops have impacted the used market as well. A quick glance will help you find a used Lucid Air Grand Touring model for less than $90,000. In 1 case, I found a model for under $85,000. This is impressive depreciation on a car that is not even a year old, and at the time had an MSRP of over $130,000 with options (now down to around $120K list). This impressive drop amounts to 31% of depreciation in 1 year. This is on par with some of the worst depreciating cars you can find.
Used car market for Tesla S Plaid
The Tesla S Plaid is probably the most famous luxury EV since it has been around for several years, and there are 1000s of videos of its rapid acceleration, and in some cases poor build quality. Being around in the market for the longest amount of time means that there are a lot of used Tesla Plaids available. Looking at used cars, there are many models available for under $70,000 with mileage under 30,000 that are just over a year old. Before recent price drops, these cars would routinely MSRP over $100,000 with all the options. Currently, a Plaid starts at $89,000 before any options. When looking at the original MSRP, we still see a 30% drop in price after just 1 year of ownership.
Used car market for Mercedes EQS
This is probably the quickest depreciating EV on the market. Mercedes has been offering aggressive lease deals and incentives to help move the car. Even with that, the high end EQS580 model has an MSRP of over $125,000. Looking at several used car listing sites, there are multiple models available right now for under $80,000, with one as low as $75,000 for a 2022 model with under 10K miles. This means that this car depreciated about $40,000 or over 35% in just 1 year.
Is it a good time to buy a used luxury EV?
As rates remain high, the market for new cars with a $100,000 sticker will remain limited. Manufacturers will continue to have to offer aggressive incentives and price cuts to move new models, and that in turn will continue to decrease used car values. I believe that these luxury EVs will continue to hover in the 30% depreciation mark after 1 year of ownership, creating great value opportunities for people looking for a used EV.