It’s a big leap, going from internal combustion engines to electric vehicles (EVs), from the petrol station to the charging station. It’s also a leap, into the dark, when it comes to resale values (RV) for EVs.
A guess would be that RV for EVs won’t be great, given that the technology is moving fast and what’s on sale today in the EV market might be outdated relatively quickly, compared to the mature technology that is ICE. But Mercedes-Benz Malaysia (MBM) sees it completely differently.
MBM already has Agility financing packages for the earlier-launched EQA and just-launched EQS, and to come up with the payment structure for Agility, they first have to have estimated residual values of the EVs three and five years down the line. Unlike ICE cars, there’s no trend to follow here.
What RV is MBM projecting for its EVs? Paultan.org posed this question to Mercedes-Benz Malaysia’s head of sales and marketing, Michael Jopp, and president and CEO Sagree Sardien, at last week’s EQS/EQB/EQC launch, and they shared an interesting point of view that we didn’t expect. According to MBM, RV for EVs will be higher even than that of ICE vehicles.
“We take a similar approach as we do the ICEs. In terms of prediction, what we globally see is the RV for EVs are sometimes significantly higher compared to combustion engine vehicles, and this is also going to be our approach for Malaysia. The Agility offers will be more attractive compared to similar ICE so we’re actually predicting higher residual values,” Jopp said.
Some might point out the relatively poor RV of electrified vehicles (hybrids and PHEVs) compared to their pure-ICE counterparts, but Jopp doesn’t think that the trend will apply to EVs.
“First of all, it’s the matter of the vehicle, the technology. Most importantly it’s the function of supply and demand. At this moment we foresee that demand will be significantly higher than supply for EVs, which is global and most likely sustainable over a longer period. Which in return, or as a consequence, will lead to higher RV,” he said.
Sardien described MBM’s strong EV RV projection as the carmaker standing behind its products. “RV is always a prediction and a forecast. But as a brand, we have to stand behind our EVs, and that’s why we’re quite confident in the RV that we put. We’re bold enough to say, look, we want a higher RV because we’re convinced that we have great tech, great vehicle, we have a demand for our asset.
“And the right mix of supply and demand as mentioned by Michael will certainly give us optimum RV. Of course, it will be a test of the market like it is everywhere else, but already early indications for our European markets already prove that RV is relatively stable if not better (than ICE),” she added.
There you have it, the reasons behind why Mercedes-Benz thinks that RV for EVs will be good. They could well be right, but Malaysia is a rather unique market – time will tell. Note that EVs in Malaysia are currently tax-free, so unlike in most other markets, EVs are priced similarly or even lower than comparable ICE models. For instance, the EQS is slightly cheaper than the S-Class PHEV here.
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MBM claimed that the resale value for EV is higher than ICE but without numbers to back up the claims. hence, it is just a marketing tactic to get people to buy EVs.
EV resale value more than ICE?
That is a big bulls#@t.
The biggest disadvantage of EV is when you need to replace the EV battery. People will sell rather than spend 10-20k to replace the battery. When that time comes, the EV car will worth nothing.
They may be right but only in the long-term and in this case that means at least 10-years in to the future. 95% of Malaysia’s new PV sales are for vehicles priced below RM100,000 and these buyers will not be able to purchase even the most “affordable” EV for some time to come. I give you that maintenance costs for an EV should be less than a regular ICE vehicle but the used car market is still very skeptical regarding battery replacement costs, the public charging infrastructure is still in its infancy and the very quick nature of updates being rolled out that instantly date an older car means it will be some time yet before the RV of EV can match those of ICE models in terms of depreciation percentage and even outright money terms.
Sure, MBM can manipulate prices to keep them artificially high for their own cars that are leased out, traded in and then leased back out again as a used car but in the real world, because essentially they are selling to themselves but that’s an unsustainable business model for the next decade.
I may be wrong though. The proof of concept will be when we see how much banks charge for HP financing of an EV compared to a conventional ICE vehicle.
>>when we see how much banks charge for HP financing of an EV compared to a conventional ICE vehicle
Fresh off the press, was quoted 2.25% flat for 5 year loan on BMW iX with Affin
i got 2.13% for 7 yrs for my ioniq5. affin also. but this was before opr hike.
Oh, really? EV resale value will be higher than ICE vehicles? Let’s wager a few shots of scotch on that..
Maybe it will be different in Malaysia, I don’t see why but a cursory search for depreciation value of EVs in UK shows that they DO hold a slight advantage over ICEs.
An Europe wide study on total cost of ownership (purchase price, running cost, fuel/charging, resale, etc) also shows EV to be cheaper, even in the countries with the highest electricity cost (Germany).
Since EVs are pretty new in MY, our data my prove otherwise but I’d be very surprised if it is
MBM is going to flop spectacularly again. Look at the blue Tec e class flopped so hard it is worth less than a myvi within 4 years. Mercedes also will flop looking at how they trying to call a a 4 cylinder a c63, they are doing to much to fast. Market doesn’t want full ev’s yet.
please explain the insane waiting lists for nearly ever competent EV. go ask anyone who has booked a bmw ix.
100% of today’s Malaysian EV buyer are doing so because it is tax free. See how long the queue is once tax has been applied.
500,000 backlog orders. Proof that Malaysians in all segments got money.
EV still new here, should no second hand EV yet. Mean MBM just tokok!
Marketing talk.
I hope that statement is not for sales gimmick. We all know cost of charging will increase n wouldnt make it cheaper to operate n own an ev. Current infra is far from optimal. The “cheaper” ev design is not attractive etc. So how ev can sustain it resale value?
When you make a statement, pls make sure u have facts and figures to back it up! If you compare the resale value of hybrids vs ICE powdered counterpart, the ICE vehicle will always have a higher used value, especially if the the hybrid is out of warranty! Just go go any classified website and check for yourself (530i vs 530e, etc)
these europeans learnt kaki kong kaki song