- Chinese EVs are depreciating rapidly in Europe, a new study reveals.
- Weak residual values in Germany are concerning to lease companies.
- Private buyers are also feeling the pain when it comes time to sell.
Chinese automakers have spent the last few years steamrolling into Europe with bargain prices, generous equipment, and monthly lease deals looking almost too good to ignore. But there’s a growing catch buyers are starting to notice. Those bargain EVs can lose value frighteningly quickly once they leave the showroom.
Fresh figures from Germany’s DAT vehicle valuation group show Chinese EVs and plug-in hybrids are depreciating twice as fast as the industry average. And the rate of depreciation is only getting worse.
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That creates headaches for almost everyone involved. Owners face painful trade-in figures, manufacturers risk swallowing losses through guaranteed buyback schemes, and leasing companies suddenly discover the cars returning are worth far less than expected.
Martin Weiss from DAT told Autonews Europe that “it is not enough to launch a good product.” Brands also need strong support systems behind the scenes if they want used buyers to remain confident years later. Part of the problem is uncertainty. Plenty of European buyers wonder whether some Chinese brands will actually stick around long term. Concerns about servicing, replacement parts, and dealer networks continue making cautious used buyers think twice.
Not Just Chinese EVs Suffering
But it’s not only Chinese brands feeling the pressure. Britain’s EV market is also watching residual values tumble across the board, in part due to the influx of cars from China, the Financial Times reported recently. Quoting figures from Indicata, it claimed the average three-year-old EV as of last month was worth 38 percent of its original value, compared with 46 percent in Germany, France and Spain. In contrast, a same-age petrol car in the UK retained 45 percent of its value, and a hybrid, 51 percent.
Carmakers are under huge pressure to increase EV sales, so many are throwing massive discounts at new models to hit UK government targets. That’s pushed a Chinese car, the Jaecoo 7, to the top of the UK sales chart for the first time ever, but it leaves nearly-new EVs looking overpriced beside heavily incentivized factory-fresh cars.
Ironically, rapid technological progress is also hurting values. Chinese brands especially release updates at breakneck speed, meaning today’s cutting-edge EV can suddenly feel old-fashioned months later. Great for innovation perhaps, but brutal if you’re trying to protect resale values.
