
For a product to be successful, it needs a very compelling answer to the question of 'why' does it exist. Early hybrid vehicles were built to offer better fuel consumption, but manufacturers quickly realised that their core customer was someone who wanted to drive a more environmentally friendly car. The vehicle price didn't really matter.
Fast forward a few years, and the focus shifted from hybrids to fully electric vehicles (EV), with wealthier people flocking to Tesla. They were the only large-scale EV maker around, and their cars looked cool. As with anything successful, competition soon arrived, and in this case, it was from the East. China had a smog problem in its major cities, so it gave out big incentives for the production and purchase of EVs. The price of EVs globally has been dropping.
The primary reason most people own a car is to get from point A to point B as cheaply as possible. Financial blogger Barry Ritholtz argues that the cheapest way to get around is by buying a second-hand EV. Thanks to rapid advances in battery technology, the cars generally have around 450 km in range, but more importantly, the battery will last longer than 10 years. In some cases, manufacturers now guarantee at least 300 000 km of battery life.
There is currently a global oversupply of second-hand EVs, meaning they are really cheap to buy. Ritholtz argues that the biggest cost saver actually comes from the fact that the annual maintenance bill for an EV is almost zero - a very important factor when buying a second-hand car.
The older the car, the bigger the concern of getting an expensive maintenance bill. A friend bought a secondhand BMW last year, and last week he had to send it in for repairs that cost around 30% of what he originally paid for it. You don't have that with EVs.
Ritholtz forecasts that the global middle class will embrace EVs, not for their green credentials, but because they will be the cheapest way to get from point A to point B. Read the full article here - Used EVs will go mainstream.