Chinese electric cars in Europe are losing prices twice as fast as their competitors

Chinese automakers have been actively conquering Europe for several years with low prices, rich equipment and favorable leasing offers. However, buyers are starting to notice the catch: these electric cars lose value alarmingly quickly as soon as they leave the showroom, Carscoops reports.

Fresh data from German car valuation group DAT shows that Chinese electric cars and plug-in hybrids are depreciating twice as fast as the industry average. And the rate of decline in value is only increasing.

This creates problems for all market participants. Owners are faced with painful numbers when trading in a car, manufacturers risk losses through guaranteed buyback programs, and leasing companies are suddenly finding that cars they are returning are worth much less than expected.

DAT’s Martin Weiss explained: “It’s not enough to launch a good product.” Brands also need strong support systems to ensure used car buyers remain confident in their choice years down the line. Part of the problem is uncertainty. Many European buyers doubt whether Chinese brands will remain on the market for long. Concerns about service, parts and dealer networks are causing wary buyers to think twice.

But it’s not just Chinese brands that are suffering. As the Financial Times recently reported, the UK electric vehicle market is also seeing residual values ​​fall across the board – partly due to an influx of cars from China. According to Indicata, the average three-year-old electric car cost 38% of its original price last month (46% in Germany, France and Spain). By comparison, a petrol car of the same age retained 45% of its value in the UK and a hybrid retained 51%.

Manufacturers are under enormous pressure to boost electric vehicle sales, so many are offering huge discounts on new models to hit the targets.

Ironically, rapid technological progress also hurts value. Chinese brands are particularly quick to release updates, so today’s cutting-edge electric car can suddenly become obsolete in a few months. This is great for innovation, but disastrous for trying to maintain residual value. notes Carscoops.

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