Elise and I recently went on a hike with another couple, and on our way up the mountain I learned from the guy all about how his car has lost $50 grand in value over just a few years. I didn’t think much of it; lots of cars have seen heavy depreciation, especially lately, so I figured he was just exaggerating. But then, when I got home, I recalled the conversation and decided to look up his car: A 2019 Audi E-Tron. And my god was I shocked with what I saw.
Depreciation is a part of life if you buy a new car, with a few exceptions like the Jeep Wrangler, Toyota Tacoma, and pretty much anything bought just before COVID and sold during that car-market nightmare. Among the worst cars when it comes to depreciation are expensive European cars. Buy a new Mercedes S-Class, for example, and you can expect to lose many tens of thousands of dollars in a really short span.
Another segment of the car market that has seen humongous depreciation is electric cars. So what if you blend 1. Expensive German Car with 2. Electric car? Well, you get a depreciation To The Max.
The headline of this article isn’t meant to be a joke, because people losing tens of thousands of dollars is no laughing matter. It can have a huge effect on someone’s livelihood if they end up buying a car whose value tanks just before they have to sell. On one hand, the cars that are depreciating worst are the ones purchased by folks who, at least in theory, can most afford it. On the other hand, I can see how this could blindside someone.
I mean, just look at the reviews of the Audi E-Tron when it came out in 2019; anybody would have thought they were buying a state-of-the-art machine. Motor Trend‘s headline was: “2019 Audi E-Tron Review: What a Way to Glide” and its subheading was “The EV wars are starting in earnest, and Audi has itself a real weapon.” Here’s how Motor Trend described how the E-Tron compared to others in its class, and even described it as “affordable”:
In the showroom wars, the e-tron’s primary enemies are the aforementioned I-Pace and Tesla’s Model X, as well as Mercedes’ upcoming EQC. A little smaller and pricier but quicker and more responsive, the Jag boasts an EPA range of 234 miles. The Model X is by far the costliest of the bunch—when you add desirable options it can soar well past $100K—but it’s also by far the quickest, as it can sprint from zero to 60 mph in 2.8 seconds with the extra-cost Ludicrous Mode. The Tesla also leads with a maximum claimed range of 325 miles. The e-tron, in contrast, is the most “normal” of the trio. Excepting the Mercedes, which starts at $68,895, it’s the most affordable with a base sticker of $75,795, offers a generous 57 cubic feet of cargo space with the rear seats folded down, and while it may not deliver the sizzling straight-line acceleration of the Model X or the halfback-like chassis moves of the I-Pace, it’s designed to charge quickly, glides over the road with unfailing refinement, and is built with battery longevity and unflagging performance as priorities.
CNET’s review was similarly glowing:
In that spirit, today I’d like to celebrate the $74,800 Audi E-Tron, a car I’ve been appreciating for nearly two months now. Audi’s first production electric car takes a subtly different but distinctive path to all-electric glory. There’s nothing ludicrous about this EV SUV and, frankly, I couldn’t care less what its Nurburgring lap time is. What I do know is that this is among the most comfortable, most soothing cars I’ve ever had the privilege of driving, and that makes it something special.
[…]
Configured this way, at $77,290 including destination, this is not a cheap car. But it offers luxury appointments on par with similarly priced premium machines, plus the added benefits of that smooth, quiet, maintenance-free EV lifestyle.
Reading these reviews, you might think the E-Tron, even at over $75 grand, might be a good choice! It’s comfortable, efficient, luxurious, and it really doesn’t cost that much more than its competition.
It’s hard to argue with this practicality or with Audi’s wholly rational approach to building an EV. The e-tron is a competent, well-engineered piece that makes few compromises compared to Audi’s gasoline-powered SUVs. But at this point, buying an electric car—especially one that starts at $75,795—is still a bold, somewhat irrational choice, a decision to go against the grain…. But we’re not far enough into the EV era to know what’s right and wrong….
The Tesla Model Y launched just a few months after the Audi E-Tron, and then as other competitors like the Kia EV6, Hyundai Ioniq 5, and a boatload more joined in on the fun, prices tanked. Some of this is a result of EVs being seen as appliances whose value is determined predominantly by a single attribute (range), some of it is a result of early adopters having already bought their EVs and skeptics hesitating to make the plunge given infrastructure issues, part of it is a result of political uncertainty/rebates, and part of it is a result of the crazy price-cuts from Tesla.
In any case, look at what a 2019 Audi E-Tron — whose MSRP was $75,795 for the Premium Plus model and $82,795 for the Prestige model — costs nowadays:
Those cars only have about 50,000 miles on them, meaning they’ve lost over a dollar a mile! My god, a dollar a mile. If I knew my car would lose a dollar of value every mile I drove it, I’d sell it immediately. Check out the value trend over time:
Especially in the last couple of years, after the post-pandemic price-jump, the market has not been friendly to the E-Tron:
It’s worth pointing out that E-Trons and other EVs were eligible for the $7,500 EV rebate, plus there’s a rebate for the buyer of the used car. Not to mention, I bet plenty of these were leased, and others were sold with money on the hood. But for those who bought them outright in 2019, even with the EV rebate: Yikes!
Here’s the gasoline-powered Audi Q7, for reference:
Now, you might be thinking that lots of expensive German cars depreciate a lot, and that’s definitely true. A 2022 Mercedes S-Class started between $110,000 and $120,000, and look at how cheap they are now:
That’s about 50 grand in just two years and 35,000 miles! Yikes! But even the mighty S-Class has nothing on the electric version of the S-Class, the EQS. That car started at $102,310 for the EQS 450+ and $119,110 for the EQS 580 4MATIC. (Less the EV rebate).
Now let’s have a look at what these machines are trading for:
That’s among the cheapest ones I’ve seen. Only $39,000 for a car that started at over $100 grand just two years prior! Surely this thing is flying off the shelf, right?
Apparently not! Here’s another EQS that lost 60 grand in 40,000 miles ($1.50 a mile):
And here’s an EQS 580 for good measure (this one actually being sold by a Mercedes dealership). These started at over $119,000, so this is also a car that lost over 60 G’s:
Just look at the pricing trends of the EQS:
Here’s
Here’s the S-Class, in case you’re curious (sorry about the scale from Cargurus):
As you can see, those expensive German cars are depreciating quickly, but the electric expensive German cars are losing value violently.
Yikes!
Thank goodness so many of these were leased or purchased with lots of money on the hood, and hopefully all of them got the $7,500 federal rebate, along with a potential $4000 rebate for the buyer of the used car.
All Images: Cargurus (Unless otherwise specified)
