Electric Vehicle Residual Value Outlook - Michael Vogan, Lead Auto Economist Dec. 5th, 2017 - Moody's Analytics
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Electric Vehicle Residual Value Outlook Michael Vogan, Lead Auto Economist Dec. 5th, 2017
Speaker
Michael Vogan
Michael Vogan is a Lead Auto Economist at Moody’s
Analytics. Before joining Moody’s Analytics, Michael was a
research analyst at the Federal Reserve Bank of
Philadelphia.
He holds a master’s degree in applied economics and
econometrics from the University of Delaware and a
bachelor’s degree in economics from Bloomsburg University.
EV Residual Value Outlook, Dec. 5th, 2017 2BEV and PHEV Variety Growing Rapidly
Number of unique models, by model yr
20
Battery EV (BEV)
18
Plug-in Hybrid EV (PHEV)
16
14
12
10
8
6
4
2
0
2011 2012 2013 2014 2015 2016 2017
Source: Moody’s Analytics
EV Residual Value Outlook, Dec. 5th, 2017 3Wholesale Used BEV Prices Fall Fast
Avg. price-to-MSRP ratio by fuel type, by sale age in yrs
90
Gas
80 Battery EV (BEV)
70 Plug-in Hybrid EV (PHEV)
60
50
40
30
20
10
0
0 1 2 3
Note: All EV MSRP values are adjusted for the
Sources: NADA, Moody’s Analytics
$7,500 federal tax credit
EV Residual Value Outlook, Dec. 5th, 2017 4Used EV Demand Drivers
What could lower demand for used electric vehicles?
» Automotive Industry Factors
– Tax credits/rebates on new EVs
– Changing consumer preferences
» Technological Factors
– Range anxiety on older models
– Innovation-driven obsolescence
– Battery degradation
» Macroeconomic Factors
– Low oil prices
EV Residual Value Outlook, Dec. 5th, 2017 5Depreciation Accelerates After One Year
Avg. price-to-MSRP ratio by fuel type, by sale age in months
100
90 Gas BEV PHEV
80
70
60
50
40
30
20
0 12 24 36 48
Note: All EV MSRP values are adjusted for the
Sources: NADA, Moody’s Analytics
$7,500 federal tax credit
EV Residual Value Outlook, Dec. 5th, 2017 6BEVs Sensitive to Initial Mileage Accrual
Avg. price-to-MSRP ratio, by mileage bucket, 3-yr-old vehicle sales
70
65 Gas BEV PHEV
60
55
50
45
40
35
30
25
0K 10K 20K 30K 40K 50K 60K 70K 80K 90K
Note: All EV MSRP values are adjusted for the
Sources: NADA, Moody’s Analytics
$7,500 federal tax credit
EV Residual Value Outlook, Dec. 5th, 2017 72017 Chevy Bolt Sunk 2016 Spark Prices
Avg. price-to-MSRP ratio, Chevrolet Spark, by monthly age
80
70
60
50
40 2015 BEV
2015 Gas
30 2016 BEV
2016 Gas
20
2 6 10 14 18
Note: All EV MSRP values are adjusted for the
Sources: NADA, Moody’s Analytics
$7,500 federal tax credit
EV Residual Value Outlook, Dec. 5th, 2017 8Range Improvements Cannibalize Prices
EV est. avg. price-to-MSRP ratio by, sale age in months
90
Next model yr range identical
80 Next model yr range improved
70
60
50
40
30
0 12 24 36
Note: All EV MSRP values are adjusted
Sources: NADA, Moody’s Analytics AutoCycle
for the $7,500 federal tax credit
EV Residual Value Outlook, Dec. 5th, 2017 9Luxury Brands Dominate EV Retention
Avg. price-to-MSRP ratio, by segment, by EV type, 1-yr-old sales, %
Audi
BMW
Cadillac
Chevrolet
Fiat
Ford
Honda BEV
Hyundai PHEV
Kia
Mercedes-Benz
Mitsubishi
Nissan
Porsche
Smart
Tesla
Toyota
Volkswagen
0 20 40 60 80 100
Sources: NADA, Moody’s Analytics Note: All EV MSRP values are adjusted for the
$7,500 federal tax credit
EV Residual Value Outlook, Dec. 5th, 2017 10Larger EVs Retain More Value
Avg. price-to-MSRP ratio, by segment, by EV type, 1-yr-old sales, %
Compact Utility
Entry Subcompact
Intermediate Compact
Intermediate Mid-Size BEV
PHEV
Intermediate Subcompact
Luxury Mid-Size Utility
Luxury Sport
Premium Luxury Large
Upper Compact
0 20 40 60 80 100
Sources: NADA, Moody’s Analytics Note: All EV MSRP values are adjusted for the
$7,500 federal tax credit
EV Residual Value Outlook, Dec. 5th, 2017 11EV SUVs Needed to Meet Demand
Share of U.S new truck/SUV sales, %
70
60
50
40
30
20
10
77 80 83 86 89 92 95 98 01 04 07 10 13 16
Sources: BLS, Moody’s Analytics
EV Residual Value Outlook, Dec. 5th, 2017 12BEV Range Improving at Lower Cost
Model year avg. range and cost per electric mile
250 400
350
200
300
Electric range, miles (L) 250
150
MSRP per electric mile, $ (R)
200
100 150
100
50
50
0 0
2012 2013 2014 2015 2016 2017 2017
Chevy
Bolt
Sources: NADA, Moody’s Analytics Note: All EV MSRP values are adjusted for the
$7,500 federal tax credit
EV Residual Value Outlook, Dec. 5th, 2017 13Range Not Enough to Save Some BEVs
Est. avg. price-to-MSRP ratio, by range, by time
70
2017 Leaf: Range 107 2017 Leaf: Range 214
2017 Leaf: Range 321 2017 Versa
60
50
40
30
20
17 18 19 20
Note: All EV MSRP values are adjusted
Sources: NADA, Moody’s Analytics AutoCycle
for the $7,500 federal tax credit
EV Residual Value Outlook, Dec. 5th, 2017 14Low Gas Prices Weigh on BEV Prices
Gasoline Prices in $ per gallon, Residual Value Difference in pp
4.0 -5
Unleaded Gasoline (L)
BEV-Gas (R) -10
3.5
PHEV-Gas (R)
-15
3.0
-20
2.5
-25
2.0 -30
1.5 -35
14 15 16 17
Sources: OPIS, NADA, Moody’s Analytics Note: All EV MSRP values are adjusted
for the $7,500 federal tax credit
EV Residual Value Outlook, Dec. 5th, 2017 15High Gas Prices Are a Boon for BEVs
Est. avg. price-to-MSRP ratio, by gas price shock, by time
70
60
50
40
30
20
2017 Leaf: Gas Price 0 SD 2017 Leaf: Gas Price 1 SD
10 2017 Leaf: Gas Price 2 SD 2017 Versa
2017 Leaf: Gas Price 3 SD
0
17 18 19 20
Note: All EV MSRP values are adjusted
Sources: NADA, Moody’s Analytics AutoCycle
for the $7,500 federal tax credit
EV Residual Value Outlook, Dec. 5th, 2017 16Gas Price Pressures Will Continue
CPI: Urban Consumer - Gasoline (Index 1982-84=100, SA)
350
300
250
200
Baseline
Forecast
150
100
07 08 09 10 11 12 13 14 15 16 17 18 19 20
Sources: BLS, Moody’s Analytics
EV Residual Value Outlook, Dec. 5th, 2017 172015 BEV Model Years Underperformed
Avg. price-to-MSRP ratio by model yr, by sale age in yrs
100
90 0 1 2 3
80
70
60
50
40
30
20
10
0
2012 2013 2014 2015 2016 2017
Note: All EV MSRP values are adjusted for the
Sources: NADA, Moody’s Analytics
$7,500 federal tax credit
EV Residual Value Outlook, Dec. 5th, 2017 18BEV Residual Values to Strengthen
Est. avg. price-to-MSRP ratio, by model yr, by age in months
90
85 2012 2013 2014
80 2015 2016 2017
75
70
65
60
55
50
Assumption: 5,817 miles per year
45
40
0 12 24 36
Note: All EV MSRP values are adjusted
Sources: NADA, Moody’s Analytics AutoCycle
for the $7,500 federal tax credit
EV Residual Value Outlook, Dec. 5th, 2017 19PHEV Prices Improving With Time
Avg. price-to-MSRP ratio by model yr, by sale age in yrs
100
90 0 1 2 3
80
70
60
50
40
30
20
10
0
2012 2013 2014 2015 2016 2017
Sources: NADA, Moody’s Analytics Note: All EV MSRP values are adjusted for the
$7,500 federal tax credit
EV Residual Value Outlook, Dec. 5th, 2017 20PHEV Residual Outlook Is Favorable
Est. avg. price-to-MSRP ratio, by model yr, by age in months
100
90 2012 2013 2014
2015 2016 2017
80
70
60
Assumption: 8,357 miles per yr
50
40
0 12 24 36
Note: All EV MSRP values are adjusted
Sources: NADA, Moody’s Analytics AutoCycle
for the $7,500 federal tax credit
EV Residual Value Outlook, Dec. 5th, 2017 21Bolt to Stand Out Among Compacts…
Est. price-to-MSRP ratio, by age in months
100
2018 Bolt 2018 Corolla 2018 Leaf
90
80
70
60
50
40
30 Assumption: 11,442 miles per yr
20
0 12 24 36
Note: All EV MSRP values are adjusted
Sources: NADA, Moody’s Analytics AutoCycle
for the $7,500 federal tax credit
EV Residual Value Outlook, Dec. 5th, 2017 22… And Also to Outperform Model S
Est. price-to-MSRP ratio, by age in months
100
90
80
70
60
50
40
Assumption: 11,442 miles per yr
30
20 2018 Model S 2018 A3 2018 Bolt
10
0
0 12 24 36
Note: All EV MSRP values are adjusted
Sources: NADA, Moody’s Analytics AutoCycle
for the $7,500 federal tax credit
EV Residual Value Outlook, Dec. 5th, 2017 23Conclusion
EV residual values will be a mixed bag over the next few years
» Low oil prices will continue to put downward pressure on EV sales
and prices
» PHEV vehicles will perform well while the BEV market matures
» Improvements in battery cost, quality, and range bode well for future
model years, but early model years will obsolete quickly
– However, basic subcompacts and sedans will still struggle with shifting consumer
preferences
» High quality, mass-market cars such as the Bolt and Model 3 should
do well on the used market
» Zero Emission Vehicle (ZEV) regulation will help develop EV markets
overall, but removing the federal tax credit would slow things down
EV Residual Value Outlook, Dec. 5th, 2017 24Q&A
For more economic insights in auto residual and lending risk visit
moodysanalytics.com/auto
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EV Residual Value Outlook, Dec. 5th, 2017 27You can also read
