The Chinese electric-vehicle maker had just launched an updated version of its G3 compact SUV, featuring a battery that gave the model a much better range than its predecessor.
Car buyers have a good reason to be concerned. Most used EVs have a much lower resale value than comparable gas guzzlers of the same age in a similar condition. Battery quality, range and the manufacturer's warranty are the three critical factors that determine a used EV's value, according to CADA. The problem is that there is no easily accessible data or commonly accepted standard for valuing the quality of used batteries.
Five years ago, an EV with a 200-kilometre range was acceptable, but now it is outdated, Xie Fei, a senior underwriter at China Property & Casualty Reinsurance Co. Ltd., said. Consumers would be reluctant to buy a used EV with the same range even if it still drives well, he added.The government subsidies that fuelled the industry early on had a direct effect on the speed at which EVs lose their value.
At the time, EVs were far less attractive to car buyers than they are today, so manufacturers had to sell a large number of vehicles to trading firms that ended up putting them up for sale on the used-car market. In China, trading companies are major participants in the used-car market.