Resale Value/Depreciation

[JCD]

While I'm excited to get a Terra Harvester (for use on my farm), one thing that scares me a little is the current industry issues around resale value for EVs, where they are dropping 40-50% in just a few years. It seems to be due to rapidly changing technology, concerns about battery longevity, manufacturer discounting, and in some cases unnecessary political involvement by the CEO.

Other than keeping Scott Keogh out of politics, what can Scout Motors do to make sure these cars can maintain some longer term resale value? Some thoughts:
1. They seem to already be focusing on repairability, which is awesome
2. Don't exceed demand with supply (hard to predict)
3. Lease Options

Personally, I hope to keep the thing at least 10 years, but depreciation plays into the overall cost of ownership.

 

[Chuckles]

I don't see how anything Scout does will affect resale other than making a kick-ass product. I do think Harvester models will depreciate less. Being a hybrid and not a pure EV should increase desireability and value.

 

[cyure]

While I'm excited to get a Terra Harvester (for use on my farm), one thing that scares me a little is the current industry issues around resale value for EVs, where they are dropping 40-50% in just a few years. It seems to be due to rapidly changing technology, concerns about battery longevity, manufacturer discounting, and in some cases unnecessary political involvement by the CEO.

Other than keeping Scott Keogh out of politics, what can Scout Motors do to make sure these cars can maintain some longer term resale value? Some thoughts:
1. They seem to already be focusing on repairability, which is awesome
2. Don't exceed demand with supply (hard to predict)
3. Lease Options

Personally, I hope to keep the thing at least 10 years, but depreciation plays into the overall cost of ownership.

Welcome to the community and same. I’m looking long term. My Wrangler will be 15 by the time I get my Scout. I’m planning on my Scout lasting just as long.

 

[THil08]

I don’t think it will depreciate much.

 

[Chaz26]

I don't think there will be much depreciation initially, at least until production is fully ramped up and supply is meeting demand. All EVs seem to depreciate a lot, possibly due to uncertainties over batteries and lifespan. I'm sure as more EVs come up to 10+ years old and assuming there are no more issues than you'd expect on a gas car of the same age and mileage then that might help with depreciation. It will be interesting to see if the BEV depreciates at the same rate as the Harvester or if they'll be differences.

I always think if you're only going to keep it for 3 years or less and want the latest upgrades then leasing is probably a better option. If you intend to keep for a long time, which is my plan, then buying should still make sense, and if you keep it long enough then depreciation shouldn't matter as much.

 

[J Alynn]

I don't see how anything Scout does will affect resale other than making a kick-ass product. I do think Harvester models will depreciate less. Being a hybrid and not a pure EV should increase desireability and value.

Unless of course fuel prices sky rocket then it could but that’s a crap shoot

 

[Albal]

Part of the "big EV depreciation" is that these cars were bought (and expected to be bought) with incentives, so that's 10%-20% right there.

A few things to help with depreciation:
1) Make it unusually reliable,
2) Make it easy to repair (lower insurance rates, among other benefits).
3) Be forward-thinking in your selection of EV tech, even if it forces a bit smaller margins at first,
4) Have unique features that are hard to find elsewhere (like 240V out),
5) Avoid ergonomic-killing trends (ie no buttons) and have a good foundation (ie cameras are no substitute for good visibility)
6) See (1)

 

[Derek]

Unless of course fuel prices sky rocket then it could but that’s a crap shoot

Yes, but then you could just run most of your miles on the 150 mile battery.

 

[Cranky Canuck]

A few comments on supposed "rapid depreciation" of EVs. If you actually look into the data what you'll find is that depreciation is highly dependent on the specific vehicle model. Unfortunately for the industry the majority of EVs are Teslas and because of the way Tesla prices it's vehicles, or more accurately changes the prices of its vehicles - arbitrarily at times, some Teslas (Model Y in particular) get hit harder by depreciation than they otherwise would had new vehicles prices remained stable for that vehicle.

Others like the Nissan Leaf, suffer from high depreciation mostly because Nissan hasn't kept up at all with battery technology and those cars are essentially identical the ones that shipped a decade and a half ago complete with the obsolete Chademo fast charge connector, so those vehicle depreciate hard from new because they basically suck.

Others like a few BMW models etc struggle to retain value because they're essentially overpriced as new cars.

But then there are cars like Hyundai and Kia EVs, some Mercedes EVs and I'm sure others that retain their value very well because as new cars they are fairly priced, have good technology and are in demand. I expect Scouts will actually appreciate in value in the beginning because they are so unique and in demand. Medium to long term I expect the Scouts to hold their value fairly well because they seem to be more like the Hyundais and less like the Teslas as far as pricing and stability and technology go.

Anyway, my point is that the rapid depreciation isn't because the vehicles are EVs, it's because they're either not great vehicles, over-priced, or the new version suddenly gets a random big price cut which then tanks the used market. The fact that they're EVs isn't why they have high depreciation.

 

[Albal]

Another thing that could help with depreciation (and initial sales) is a longer than usual basic warranty. We all want the Scout to be very reliable but, being realistic, it's a brand new design from a brand new company using relatively new tech. A fantastic warranty would go a long way to ease the concerns of both the new and used Scout buyer.

 

[Cranky Canuck]

Another thing that could help with depreciation (and initial sales) is a longer than usual basic warranty. We all want the Scout to be very reliable but, being realistic, it's a brand new design from a brand new company using relatively new tech. A fantastic warranty would go a long way to ease the concerns of both the new and used Scout buyer.

All EV's have a minimum 8 year / 160,000km (100,000 mi) powertrain warranty so they'll all have that as a minimum. If Scout wanted to go above and beyond that though I wouldn't complain!

 

[Albal]

All EV's have a minimum 8 year / 160,000km (100,000 mi) powertrain warranty so they'll all have that as a minimum. If Scout wanted to go above and beyond that though I wouldn't complain!

Yes, and a good warranty on the rest of it too. For things like, you know, rust...

 

[Cranky Canuck]

Yes, and a good warranty on the rest of it too. For things like, you know, rust...

I haven't lost a car to rust since the 90's when all the car makers started hot-dip galvanising them but a long warranty on suspension components and the electronics would be nice.

 

[cyure]

I haven't lost a car to rust since the 90's when all the car makers started hot-dip galvanising them but a long warranty on suspension components and the electronics would be nice.

Okay question. I had the parts on my Wrangler that I could coated with that black anti-rust coating. An EV is like a sled correct underneath that holds the batteries etc. Would it be necessary to have that coated? Would it be possible for Scout to put an antitrust coating on it. When I looked at the Ineos Grenadier they said it had a 12 year rust warranty because it is coated with some sort of anti-rust compound of theirs. Ineos is a chemical company after all. Now that we live in Illinois I have to worry about that stuff. I miss California.

 

[Chuckles]

All EV's have a minimum 8 year / 160,000km (100,000 mi) powertrain warranty so they'll all have that as a minimum. If Scout wanted to go above and beyond that though I wouldn't complain!

In the USA, the 8-year/100k-mile warranty covers the EV battery, not the powertrain (motors).

 

[Cranky Canuck]

In the USA, the 8-year/100k-mile warranty covers the EV battery, not the powertrain (motors).

Oh really? Ouch, that sucks for you all then! Hopefully Scout will interpret that to be "powertrain".

 

[Cranky Canuck]

Okay question. I had the parts on my Wrangler that I could coated with that black anti-rust coating. An EV is like a sled correct underneath that holds the batteries etc. Would it be necessary to have that coated? Would it be possible for Scout to put an antitrust coating on it. When I looked at the Ineos Grenadier they said it had a 12 year rust warranty because it is coated with some sort of anti-rust compound of theirs. Ineos is a chemical company after all. Now that we live in Illinois I have to worry about that stuff. I miss California.

Short answer is no.

In all likelihood Scout will apply an anti-rust coating at the factory as has been standard automotive practice for a couple of decades now. The steel components usually get hot-dip zinc galvanized while I think the aluminum components are usually just painted? Either way EV automakers generally recommend against aftermarket anti-rust coatings since a lot of them require drilling holes in places and that's usually not a good idea in an EV. I would suggest that most aftermarket rustproofing is more of a scam than a useful thing to do. The bottom of the Scout will likely be some sort of armour plating to prevent damage to the pack by rocks and road debris so that will likely be steel and treated by Scout in order to prevent corrosion since it'll be exposed to everything. The frames are almost always hot-dip treated, and the doors and body panels and stuff are often made of aluminum or other materials like plastic to save weight and they don't tend to rust either.

I can go into the whole backstory of why cars don't really rust anymore if you want but essentially there's no longer a need to rustproof most new cars.

Don't misunderstand though, modern cars can and do show rust but if you see rust on a car nowadays you'll notice it's usually very localized and it doesn't spread. In the 70's and earlier rust would eat a car, it would consume a hole right through the frame if you let it. Today rust just makes unsightly spots but won't actually consume entire parts because of how galvanization works. Rust only happens when the zinc coating has been compromised by a rock chip or a scratch or something so that the area without the protective zinc will rust but the areas around it won't let it spread. Now the zinc does get consumed over time by oxidation as well (protecting the steel in the process) but that takes significantly longer than any car will likely be on the road.

So basically you can rust proof if you want to but it's not really necessary anymore and mostly there to separate people from their money.

 

[cyure]

Short answer is no.

In all likelihood Scout will apply an anti-rust coating at the factory as has been standard automotive practice for a couple of decades now. The steel components usually get hot-dip zinc galvanized while I think the aluminum components are usually just painted? Either way EV automakers generally recommend against aftermarket anti-rust coatings since a lot of them require drilling holes in places and that's usually not a good idea in an EV. I would suggest that most aftermarket rustproofing is more of a scam than a useful thing to do. The bottom of the Scout will likely be some sort of armour plating to prevent damage to the pack by rocks and road debris so that will likely be steel and treated by Scout in order to prevent corrosion since it'll be exposed to everything. The frames are almost always hot-dip treated, and the doors and body panels and stuff are often made of aluminum or other materials like plastic to save weight and they don't tend to rust either.

I can go into the whole backstory of why cars don't really rust anymore if you want but essentially there's no longer a need to rustproof most new cars.

Don't misunderstand though, modern cars can and do show rust but if you see rust on a car nowadays you'll notice it's usually very localized and it doesn't spread. In the 70's and earlier rust would eat a car, it would consume a hole right through the frame if you let it. Today rust just makes unsightly spots but won't actually consume entire parts because of how galvanization works. Rust only happens when the zinc coating has been compromised by a rock chip or a scratch or something so that the area without the protective zinc will rust but the areas around it won't let it spread. Now the zinc does get consumed over time by oxidation as well (protecting the steel in the process) but that takes significantly longer than any car will likely be on the road.

So basically you can rust proof if you want to but it's not really necessary anymore and mostly there to separate people from their money.

Thank you for that. The main reason I did it is there’s those frame pieces on a Wrangler that are lower than the door and that started to rust. It was just ugly. I would see it when I walked up to my Jeep and I hated it. So I had it coated and the coating is black and my Jeep is black. Problem solved! Good to know it’s not necessary to do that on my Scout.

 

[Cranky Canuck]

Thank you for that. The main reason I did it is there’s those frame pieces on a Wrangler that are lower than the door and that started to rust. It was just ugly. I would see it when I walked up to my Jeep and I hated it. So I had it coated and the coating is black and my Jeep is black. Problem solved! Good to know it’s not necessary to do that on my Scout.

Well I mean if there's bits that get damaged from rock hits and stuff those will start to rust so you'll still maybe want to coat them like you did on your Jeep but hopefully the Scout will be designed so that won't be necessary.

 

[THil08]

Okay question. I had the parts on my Wrangler that I could coated with that black anti-rust coating. An EV is like a sled correct underneath that holds the batteries etc. Would it be necessary to have that coated? Would it be possible for Scout to put an antitrust coating on it. When I looked at the Ineos Grenadier they said it had a 12 year rust warranty because it is coated with some sort of anti-rust compound of theirs. Ineos is a chemical company after all. Now that we live in Illinois I have to worry about that stuff. I miss California.

Don’t worry about were i got these from. Lets just say the same website that does it too us. If the user is on here thanks for these images.