Residual Values

A company called ALG provides residual values, or how much a car will be worth after 2, 3, 4 and 5 years, to automotive and financial businesses. This information is used to determine the cost of leasing a car.

While the i-MiEV is still not listed, the Nissan Leaf for 2011 and 2012 is. Here is the data showing percent of MSRP retained and market value for both model years (any tax credits are retained by the lessor, not the lessee):

2011 MSRP $34,570
2 years 41% $14,325
3 years 35% $12,275
4 years 31% $10,725
5 years 21% $7,275

2012 MSRP $35,520
2 years 49% $17,400
3 years 42% $14,900
4 years 36% $12,875
5 years 25% $8,925

http://www.cars.com/go/alg/index.jsp

By comparison, the 2011 Mazda 3 speed retains 68%, 60%, 52% and 44%. Several cars scored 60% or better at 2 years. Hopefully the i-MiEV will score better once they get rated. February sales figures are now out, 44 sold. Total USA sales, 160 in 3+ months.

If a dealer is leasing the i-MiEV, they should have the residual value in order to compute the monthly payments.

Jenn

I contacted ALG this morning concerning residual value for the i-MiEV. They do not have any data on the i as Mitsubishi has not furnished it (they did request it, no response yet). This is consistent with the feedback I received from two dealers, one in WA and one in IL, that said Mitsubishi was not offering the i for lease (the only model Mitsubishi is not leasing) at retail. The i may be available for Fleet leasing and I am still trying to confirm whether it is or isn't.

Wow, those are scary low residual values for the Leaf, :shock: but it jives with my experience so far in trying to resell the i. Dealers are just too scared of the unknown until EVs have an established resale market. Could mean there's an opportunity in assuming someone's lease or buying a previously-leased car.

The i-MiEV is so unknown that I would think it's resale value would drop faster than the Leaf because no one will be looking for one. But hopefully my logic here is wrong.

I suspect resale values on certain EVs may improve over time for a number of reasons...driver acceptance, warranties, freedom from the gas station, small solar installations at home, realization that it is a commuter car, etc. I don't think the current Leaf will improve though. In two or three years it's battery and computer technology relative to it's size will be obsolete. In fact you could say the iMiev has already done that to the Leaf, so I think from a technology POV, the iMiev will hold its value a bit longer. Nissan willl be forced into updating it's Leaf sooner than Mitsu will.

But there is the issue that the iMiev looks wierd, like a golf cart...yet, people are gaga over the SmartCar and the MiniCooper. Ever try to get in and out of one of those?

The iMiev is a good, basic, cost effective EV, with a technology that should keep it an effective purchase for years to come. And I'm sure in a few years, there will be hackers that will be selling add-on battery packs that you could mount in the trunk on ebay.

Residual values are also based in part on sales volume. The sales of the i have been miniscule thus far, so it's no surprise it hasn't been rated. And the short sales history is why the big jump from purchase to second year residual occurs with the Leaf.

All EVs are going to have diminshed residual value because of the big battery replacement cost at some point in the future, as well as unknowns related to diminishing range as the vehicle battery pack ages.

At least until we get much further along in the product life cycle ...

Interesting article on residual value of Leaf and Volt after one year, fair to assume Miev should follow similar trade in value as other EV's?
http://www.plugincars.com/nada-says-nissan-leaf-retains-95-percent-value-121903.htm

I think the biggest killer of residual value for any EV will be the anticipated cost of replacing the battery - The older the car is, the sooner this MAJOR expense is going to need to be done

It's possible things will improve if the cost of a new battery pack comes down 50% or more over the next several years, but a 5 year old electric vehicle with 75,000 miles on it is much more likely to need to have $10K invested in it very shortly as compared to ANY ICE powered car

Don

Think EV's have two things working in their favor, first, battery technology is improving and costs will come down by the time we need to replace our Miev battery, in 10 years there will be much competition in the battery production arena. Next is the cost of oil/gas is expected to continue to rise as developing nations use more of it to get their economies rolling. Personally, I don't care too much about residual value at this point as I plan to keep this Miev and ditch my other ICE first when purchasing my next EV.

A report just out rates the 2011 LEAF trade-in value at 95%, and the Volt at 90% (value after the tax credit), both far better than their ICE bretheren (such as the Civic at 78%, IIRC).
http://www.autoguide.com/auto-news/2012/06/nissan-leaf-chevy-volt-one-year-resale-values-top-90-percent.html
The LEAF may be holding value because of the big price increase (well, elimination of the stripper model) for 2012, but even the much-maligned Volt is doing very well. Plus, there's gotta be some psychology in saying "This car sold new for $31k last year, and you can get 'er 12,000 miles later for $22,325."

I wonder how the $7500 tax credit factors into those numbers?

Don

They're saying that the 2011 Leaf is now worth MRSP minus 5% minus $7500, therefore "95% retained value". That's why I'm saying that the tax credit has got to be skewing things. There's plenty of potential buyers that can't use the tax credit, whole or part, and I havent' seen the market come up with a way to serve those customers, other than with a used car...

I thought the market served those customers with a lease.

Jenn

There is no doubt that the current laws which cover the EV tax credits were designed by rich people solely for the benefit of other rich people - It *almost* prevented us from buying this car

Don

With tongue in cheek...I'll take it. I'm so used to giving to the government, that I decided to take something for once. And not to necessarily make things political, but I pay about 40% federal, state and city income tax...unlike one of the presidential candidates who only pays 13%.

Spoke with ALG this afternoon and was advised that residual values (what the i is projected to be worth after 2, 3, 4 & 5 years) will be published in their Septermber/October guide. It's possible other industry reports, such as Edmunds, Cars.com or Kelly Blue Book, could make this information available a few weeks earlier.

Finally there will be offical information that can be used to see how the i compares with other electric and ICE vehicles. This information is also used to determine lease rates so, hopefully, Mitsubishi will start offering a retail lease alternative sometime this summer.

fjpod said:

. . . I think from a technology POV, the iMiev will hold its value a bit longer. Nissan willl be forced into updating it's Leaf sooner than Mitsu will.

But there is the issue that the iMiev looks wierd, like a golf cart...yet, people are gaga over the SmartCar and the MiniCooper. Ever try to get in and out of one of those?

The iMiev is a good, basic, cost effective EV, with a technology that should keep it an effective purchase for years to come.

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I certainly hope you're right about the i building in popularity/value, but I fear not. I expect it will lose value faster than the Leaf. If I didn't really, really want an EV right now (and I really do), I'd hold off for a bit. I'm pretty sure the i-MiEV is headed for a refresh sooner than the Leaf, partly because it's the older car (the i has been around for years if you include non-EV versions), and partly because Mitsu's inked a major deal with Toshiba to switch their battery technology to SCiB. Both argue for a new i sooner rather than later, while the Leaf's pretty much a brand new car that I don't expect to be redone for a while, aside from updating the battery technology (which I expect from every EV every couple of years).

It's very hard to gauge what's going to happen on the consumer demand side, obviously a key factor in resale value. Maybe not many people will want EVs, but that will reduce the supply of used cars as well as the demand, so hard to say how that's going to cut. For now, the EV market is kind of fake, with CA's EV sales requirements putting the screws to manufacturers who can't afford to be shut out of such a huge market. State subsidies and tradeable "green" credits have created significant incentives, but who can say how long all that lasts?

One thing that might help residual values is future EV pricing. Back when the U.S. version of the i-MiEV was approved, I don't think Mitsubishi planned to price the i-MiEV this low in yen terms. Nissan's aggressive pricing and marketing of the Leaf forced the i downmarket, but I'm not sure "cheapest EV" was exactly what Mitsu had in mind. A redesigned i might come with a higher price tag (bye-bye $30k), which could increase demand for late model used EVs by price-sensitive consumers. For my part, I'm not all that sure how soon there'll be a less expensive, more practical EV choice out there, another good reason to buy.

jray3 said:

Vike, IIRC that's the second time you've posted about the iMiev changing to SCiB. I thought our cars already had it. :? If you have any info to the contrary, please share.

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Sorry to disappoint you but still LEV50

To ensure world-class performance, we initiated a joint venture between GS Yuasa, Mitsubishi Corporation and Mitsubishi Motors to create a dedicated company called Lithium Energy Japan. The goal? To engineer a high-performance lithium-ion battery specifically for the Mitsubishi i.

It paid off. Our custom, 16 kWh battery pack delivers everything you need in a green vehicle: a long air-cooled life, responsive power, fast charging and great range. Oh, and Mitsubishi quality, of course. Which is why we can back our battery with an 8-year/100,000-mile limited warranty.

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http://i.mitsubishicars.com/miev/charging/battery