Following my recent emails about how outrageously expensive electric vehicles are to run (because of their horrendous depreciation costs) compared to petrol (gasoline) or diesel vehicles. I was contacted today by a principal of a big car dealership and congratulated on my own independent research on the matter, and then had my eyes opened even more with some shocking facts I was not aware of and have never seen on the Internet at all.
Here is what he told me as it applies to New Zealand and most other countries in the world. I was shocked!
“In your email you mentioned Auto Dealer Today Magazine’s (UK) research mentioning the Hyundai IONIQ in just three years between 2020 -2023 costing NZ$100,000 depreciating on average 67% (NZ$67,000) down to NZ$33,000 – with the Tesla Y and Model 3 at very similar rates. Well, you are correct, but as the cars get a bit older and closer to the end of their battery warranties at either 7 or 8 years the matter gets very much worse and here is the reason why;
If you brought any of these Battery Electric Vehicles (BEV’s) in to us to sell as a trade at 5 years of age. For example, the Hyundai IONIQ BEV, that five years earlier you had purchased for NZ$100,000 – we would offer you only NZ$5,000 for it if you were lucky! Reason:
The UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT (UNCTAD) based in Geneva, Switzerland
https://unctad.org/page/online-consumer-protection-legislation-worldwide
– has set up “Consumer Laws” in countries that have ratified the UN Charter so that now out of 142 countries 115 have adopted the legislation. Here in New Zealand it is called the NEW ZEALAND CONSUMER GUARANTEES ACT (CGA) 1993 and in Australia it is called the AUSTRALIAN CONSUMER LAW (ACL) in Schedule 2 of the Australian Competition and Consumer Act 2010. Versions of it are in most EU countries and the United States.
Under the New Zealand CONSUMER GUARANTEES ACT (which is virtually the same for most countries) a key imposition of it is that a retailer must provide a reasonable guarantee and warranty for all of the products he sells, with a warranty period commensurate with the price and quality of the goods. For instance, a NZ$500 oven made in China would realistically be expected to last say 3 years, but a NZ$4,000 Bosch quality oven from Germany at least 10 years. These consumer laws override all manufacturer’s warranties and in the case of electric cars like a Hyundai IONIQ BEV at NZ$100,000, if the battery fails just before or even after the manufacturer’s warranty expires the customer has the right for a full replacement or full refund from either the manufacturer or the retailer whatever the customer chooses. So this means that the closer the vehicle and battery get to the expiration of the manufacturer’s warranty, no car dealer will want to even take these hugely expensive vehicles for a trade as they may be successfully sued for the original full price of the vehicle or full new replacement by the customer. So to put it in its full perspective, in just 5 years of ownership regardless of the miles or kilometres traveled, your Hyundai IONIQ or Tesla will have lost NZ$20,000 per year just in depreciation alone. That buys an awful lot of gas!”