Resale Value Comparison of Electric vs Gas Cars

For car buyers in today's market, the resale value of electric vs gas cars has become more significant than ever. While EVs offer seamless transition to sustainable urban mobility, gas cars still dominate the UAE's markets. They offer different sets of benefits to the owner, including the resale value. 

With the rapid advancement of automotive technologies, the question of which vehicle holds its value better—EV or ICE — in the near future demands a clear justification. While both are significant investments, their depreciation paths are vastly different, heavily influenced by factors such as evolving battery technology, government incentives, and charging infrastructure. This guide provides a direct comparison of the resale values of EVs versus their gas-powered counterparts.

The Numbers: EV Depreciation vs. Gas Car Depreciation

The aftermarket value of EV vs ICE cars is not news. However, it may surprise new buyers, especially those who prefer the modern electric powertrains, aligning their purchase with the UAE’s greener mobility initiatives. 

The globally available data shows a clear and significant difference in how these two types of vehicles hold their value.

• Electric Vehicles (EVs): On average, EVs lose value at a rate of $0.27 per mile driven.

• Gas-Powered Cars (ICE): In contrast, gas cars depreciate at a much lower average rate of just $0.11 per mile driven.

This data reveals that, mile for mile, an EV loses more than double the value of a traditional petrol car. While this is a general trend, it is a crucial starting point for understanding their different resale prospects.

Why the Difference? Key Factors Compared

The numbers don't lie, but they also don't tell the whole story. While the depreciation gap is clear, it’s important to understand the underlying reasons. The key factors that create this significant difference in resale value are a direct result of how and why each type of car is built and sold. Let's break down the major factors side by side.

As this comparison shows, the greater depreciation of EVs is not a random trend but a direct consequence of a rapidly evolving technology and a developing market. These factors create unique challenges for owners who may want to sell their electric cars in the future.

The Dubai Angle: Local Resale Realities

While the global trends are true, the local market in Dubai and the wider UAE has its own dynamics. Dubai’s rapidly expanding public charging network and strong UAE government support for clean mobility are positive signs for electric vehicle owners.

In the near future, as the market matures and more buyers become comfortable with the technology, we can expect to see some stabilization in local EV resale values. However, as is the case worldwide, the influx of new, highly competitive models, particularly from Chinese manufacturers, is likely to continue putting pressure on used EV resale prices.

As of present, the EVs still don’t have a signal for strong resale value in the near future. 

The Future Outlook: Is the Gap Closing?

Having said that, the near future of EVs' resale value doesn’t look as solidified as that of the petrol cars; the current depreciation gap is a symptom of a market in transition, not a permanent reality.

Several key trends suggest the gap between EV and gas car resale values will begin to narrow in the years to come. Per the automotive industry experts, the gap in resale value will close for several reasons, such as:

1. Maturing Technology

The blistering pace of battery and charging technology is starting to stabilize. We are transitioning from a period of revolutionary breakthroughs to one of more incremental improvements. As a result, a three-year-old EV in the future won't feel as obsolete as a current one does, which will help it retain more value.

2. Growing Market Acceptance

As more consumers gain experience with EVs, either through ownership or ride-sharing, range anxiety and skepticism about the technology will decrease. A larger and more confident pool of buyers for used EVs will naturally create more demand and support higher prices.

3. Standardization of Batteries

The industry is moving towards more standardized battery packs and swappable battery technologies. This could lead to a clearer and more transparent used market, similar to how an engine's condition is currently evaluated in a gas car.

4. Shifting Incentives

The UAE’s government policies and manufacturer strategies may evolve. While current incentives focus on new car sales, future programs could offer benefits for the purchase of used EVs, boosting their appeal.

The data suggests the EV depreciation penalty is a temporary phase. While the gap won't close overnight, all signs point to a more level playing field in the future, making EVs a more compelling long-term financial choice for buyers in Dubai.

FAQs:

Which EV models hold their value the best?

Models with longer ranges, a strong brand reputation, and high market demand tend to retain their value better. While this can change with the release of new models, popular and well-established vehicles in the EV market often perform better in the used car market.

Can I do anything to improve my EV's resale value?

Yes, you can help preserve your EV's value by practicing good battery health habits, such as avoiding frequent use of DC fast charging, keeping the battery's state of charge between 20% and 80% for daily use, and parking in the shade to avoid extreme heat. A complete and well-documented service history will also enhance its appeal.

Do EVs save you money on long-term ownership, despite the depreciation?

While EVs depreciate faster, they often have a lower total cost of ownership in the long run. This is primarily due to significantly lower running costs. Electricity is much cheaper than petrol, and EVs have far fewer parts that require maintenance, such as oil changes, spark plugs, and exhaust systems.

What about the value of a gas car with high mileage?

Mileage is a key factor in the depreciation of a gas car. While a gas car's engine is more durable over the long term, higher mileage indicates more wear and tear on components, which can significantly reduce its value. A well-maintained gas car with a full service history can mitigate some of this loss, but the value will still drop predictably as the mileage increases.

How does the government's push for EVs in Dubai affect resale value?

The UAE's strong support for EV adoption, including the goal of having 50% of its vehicle fleet be electric or hybrid by 2050, is a major positive. This indicates a long-term commitment to building infrastructure and a stable market for EVs. Although a clear-cut effect is not yet visible, this policy provides a strong foundation for future value and confidence among buyers.

Final Thoughts

When the sole focus is on resale value, the numbers and the underlying factors are clear: gas-powered cars currently have a distinct advantage. This is due to their stable technology, mature market, and the absence of rapid obsolescence that affects EVs. However, understanding this trend is just one part of the equation. As the EV market evolves, the factors influencing its resale value will shift, and with them, the true long-term value of these vehicles will also change.

The electrification of 50% of all vehicles by 2050 in the Emirates will massively boost the sale and resale values of the EVs in the next decades, if not in a few years. The future lies with the electric powertrains in the UAE, as ICE-powered vehicles will face strict regulations, deterring owners and encouraging them to move towards electrified vehicles.