How to Lose $100k in Four Years

EVs don’t just lose charge – they lose value – and at a rate that will take your breath away.

If you bought a Lucid Air Grand Touring back in 2022 for $154,000 can you guess what its worth today? According to Kelley Blue Book, this EV’s current market value is $44,800 – meaning it has depreciated to the tune of 73.2 percent over the course of four years. Kelley says a four-year-old Tesla S – which listed for $101,190 when it was new four years ago – is currently worth about $42,000. Then there’s the Audi e-Tron GT, which listed for $103,895 back in 2022. According to Kelly, this device is currently worth $38,300.

It makes a time-share seem like a good investment!

It is also a kind of commentary on the sickness of affluenza. It was once a general truism that the way to become wealthy was to not fritter away wealth; one tried to avoid losing money, in other words.

This EV business takes it to a new level. If you break it down into annual losses, the buyer of a 2022 Lucid Air lost about $25,000 each year over the course of four years on his “investment.” Looked at from another angle, the Lucid buyer could have bought a brand-new Accord sedan every year (just about; the base price of a new Accord is $28,395) and thrown it away at the end of the year and then bought another – for four years. Another way to look at it is to consider how much gas $25,000 buys. Even at Orange Man prices, $25k would keep the tank of the gas-guzzliest vehicle filled for years. $100k would keep a small fleet filled up for decades.

These losses can also be seen as the smaller-scale iteration of the losses incurred by the manufacturers of these devices. Lucid has never actually made money. Losses so far are estimated at $11 billion. The value of Lucid stock has declined by almost 90 percent. The company has been on the razor’s edge of bankruptcy since its founding but somehow (so far) manages to find more “investors” willing to lose money to keep the doors open. There appears be some truth to PT Barnum’s dictum about a sucker being born every minute.

Ford has admitted to having lost $20 billion selling EVs. It at least had the sense to cut bait on the Lightning pick-up, which apparently cost Ford something like $20,000 for each one it sold. GM has lost a similar sum on its “investment” in battery powered devices. Normally, the thing to do would be to stop making more such “investments.” Instead, Ford is about to introduce a new electric truck. It will be smaller and cost less to buy than the Lightning – but it’s probably still going to cost Ford a fortune.

Slate is another such “investor.” It is on the verge of trying to sell the little electric truck it initially said it was going to sell for about $20,000. The price has risen to about $27k, which is probably going to cost the people who “invested” in Slate a lot of money since it’s unlikely many people are going to want to buy a stripped-down, micro-sized electric truck with a best-case driving range of about 150 miles when for about the same money, they could buy something much more practical, like the Ford Maverick hybrid (which starts around $28k and has a driving range of 600 miles and comes standard with a stereo and power windows, both optional/extra-cost with the Slate).

There is an upside to all of this. It is that you can buy a four-year-old EV that cost six figures when it was new for about a third what it sold for when it was new. This of course assumes you don’t ask why it is that a vehicle that sold for six figures when it was new – only four years ago – is only worth about a third what it cost when it was new after only four years.

The reason why is that a four-year-old EV has a four-year-old battery – one that may not have another four years of useful life left. It might. But it might not. Much depends on how the battery was treated by its first owner. If the battery was subjected to regular bouts of “fast” charging, its useful life has probably isn’t much longer. It is something like how an engine was treated by its owner but also different in that most of the time, a four-year-old car’s engine has another 10-15 years still ahead of it. The odds are not as favorable when it comes to batteries – and the cost of replacing one is so high it is not worth replacing it. For example, a new battery pack for that massively depreciated Lucid Air costs $15-$25k.

And now you know why a four-year-old Lucid Air that cost six figures when it was new is only worth about $44k today.

Imagine what it’ll be worth four years from now.

. . .

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