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Battery replacement could cripple electric vehicle residuals

ACF Car Finance, a sub-prime specialist that operates a network of used car sales sites, predicts electric cars that are on sale now could lose 90% of their value in five years.

ACF believes the shock drop in value at year five will be due to the looming cost of replacing an electric vehicle’s battery in the eighth year of ownership which could cost up to £8,000.
The company's depreciation estimates are based on its own study of pre-owned electric car prices and the findings of industry guides to used car trade values.

The company, which specialises in mid-range family cars, says that many customers are likely to steer clear of buying electric models more than a couple of years old.

Leyton Cooper, ACF's group buying manager, believes that the widespread usage of electric cars will depend on a flourishing second-hand market.

But this will only be seen, he says, when manufacturers solve the issue of battery costs and their lifespan, currently around eight years.

Cooper said: “We sell thousands of cars each year, and I'm sure that the percentage of electric models will start to rise dramatically as the second-hand market comes online.
"But anyone trading in an electric car which is more than three years old will have to take a big hit on depreciation as things stand at present.

"This is potentially great news for the buyers of used electric cars, but we will be warning them of the useful life that is likely to be remaining for the battery.”

ACF Car Finance's national network of car showrooms specialises in supplying vehicles to the growing number of people with impaired credit records.

Cooper said: “We estimate that by around 2013 there will be a major rise in the number of second-hand electric cars coming into our showrooms.

"If the market isn't going to stall at that point, manufacturers will have to start addressing the battery problem now.”

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