A man recently broke down how fast a Ford Mustang EV depreciated as an example of why people should hold off on buying new electric vehicles.
TikToker Thomas (@carsrme) garnered over 35,000 views when he explained the depreciation rate on new electric vehicles, calling it a "$20,000 mistake."
Thomas begins by showing viewers a newer Mach E that was purchased for $43,000. With only 15,000 miles on it, you would think that the price drop wouldn't be too severe. Unfortunately, the Mustang dropped almost 50% in value from $43,000 to $23,000 in a few months.
To put it into perspective, he compared the drop in value to a 3-year-old Jeep with 70,000 miles. According to him, the Jeep maintained its value with more miles and more years on it than the EV.
"To lose $20,000 in six months, this happens with a lot of EVs. Just don't buy a new EV right now," Thomas advises. "These are great deals if you want to buy one used, though."
According to CNBC, electric vehicles are facing a serious issue when it comes to depreciating value, which could dissuade buyers from switching to an EV. In a 2024 study, "the average price of a 1-to-5-year-old used EV in the U.S. fell by 31.8% over the past 12 months," which equals approximately $14,418 in lost value. On the other hand, a "combustion engine vehicle" dropped by 3.6 percent within the same period.
CNBC explains that EVs are closer to laptops and other electronics—which drop in value quickly—than a traditional combustion engine vehicle. "The software and computing capabilities of used EVs may become outdated and incompatible with updates by the time they are sold or even beforehand."
Other reasons for EV's drastic price drop are Tesla's underbidding of the market and an overproduction of models.
@carsrme Evie’s have a wicked depreciation curve #ford #ev #mach #newcar ♬ original sound - Thomas
Many viewers thought that EVs weren't worth the original price.
"Happens with all new ones. just saw a used 2022 f150 XLT powerboost with a 61k MSRP that was for sale with 18,000 miles at a dealer for 32,500. talk about a BATH on trade in within 2 years," one shared.
"News flash, EV or ice, they all take a big hit when you buy new," a second added.
"Should of bought the real mustang," a viewer said.
Others pointed out that new cars lose value the moment you drive them off the lot and that the drop in value is only an issue if you're trying to sell.
"You haven't lost anything until you sell it. when the demand dries up, prices crash. new cars lose massive value after buying. buying the hype makes it even worse," one said.
"All cars lose at least half their value once you drive them off the lot. This really isn’t surprising," another remarked.
"Just drive it and the depreciation is pointless," a third agreed.
The Daily Dot reached out to Thomas via TikTok Comments and Ford via email.
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The post ‘15K miles’: Man buys Ford Mustang EV for $40,000 in summer. Then he realizes he made a $20,000 mistake appeared first on The Daily Dot.
