Why tax credits on used EVs will take time to gain traction

With a used EV, battery range and health can determine factors in a consumer’s purchase decision – even if they have credit.

Edmunds Drury said, “Many vehicles in the used market that are EVs, you’re going to see a range of 80 miles… maybe 100, but then the factor is the battery doesn’t have a 100 percent charge.” , “You might be looking at something with 60 miles.”

According to a 2022 J.D. Power study, on average, 23 percent of owners of battery-electric vehicles in 2020 or newer said their battery range has worn out since they made their vehicle purchase. For vehicles older than seven model years, this percentage has increased to 47 percent.

According to Stephanie Valdez Strati, director of research and development for Cox Automotive Mobility, battery warranty coverage varies by automaker and vehicle, but most coverage is typically around eight to 10 years.

To provide greater transparency in the used EV marketplace, his group is developing a tool for consumers that can authenticate a vehicle’s battery health.

“If it’s a used EV, and if it’s past that warranty, it’s important to really understand the health,” Valdez Strati said.

Battery replacement costs can be significant, many dealers said, reducing the effectiveness of the tax credit as a result.

According to Autotrader, a unit of Cox Automotive, a refurbished battery pack can cost as little as $2,000 for an early Nissan Leaf, but can exceed $10,000 for a higher-capacity one in newer models.

“I think we’re far from worrying about it, but that’s not to say consumers won’t ask dealers about it — they certainly will,” said Brian Maas, president of the California New Car Dealers Association. ,

See also  Railway unions, companies make possible settlement to avoid strike

“Knowing the warranty and the expected shelf life of these batteries is going to be mission critical for both dealers and consumers,” he added.