The report, published by DoneDeal, offered an analysis of asking prices for second-hand cars on the company's website. It claimed that an electric car bought today would have lost well over half its value within three years (58% of the cost). However, it has now emerged that DoneDeal did not factor in the roughly €10,000 discount for these cars, based on an SEAI grant and a vehicle registration rebate offered by the Government.
DoneDeal calculated the drop in residual values based on a full list price instead of the price actually paid for the car after the discount. It also accepts that its sample of cars from 2016 was too small - given the relatively small number of electric cars sold that year - to give an accurate picture of second-hand values.
One example, Volkswagen Golf E listed at €45,995 is actually sold for €35,995, as the dealer hands over the car for the lower price and then recoups €10,000 from the State. Therefore its rate of depreciation should be calculated on the actual purchase price, instead of a price nearly 20% higher - in which case the depreciation would appear to be much higher.
But the analysis suggested the drop in value of the car was from the listed price of €45,000, meaning electric cars had a more dramatic drop than petrol cars, for example. The DoneDeal report said petrol cars would only lose 33% of their value.
"The VW Golf E does not sell for €45,000. It sells for €35,000, after rebates, and no one has ever paid the full list price," said a Volkswagen spokesman.
Another industry source described the recall of the research as "embarrassing" and said what people wanted now was reliable information about which car to choose as diesel becomes less popular.
It is, however, fair to say that older EV’s do not have the highest re-sale values because technology has moved on and some cars that did 100 to 120 kilometres on one charge will now do twice that and range is improving all the time.
However, the main issue car distributors have with the DoneDeal report is its projected value of EV’s bought now and being sold or traded-in in three years time.
Stephen Gleeson, managing director of Hyundai in Ireland, criticised elements of the report: "They included in the calculations of EV residual values three vehicles from 2016; Nissan Leaf (351 sales), BMW i3 (14 sales), Renault Zoe (13 sales).
"The only EV that has a base sufficiently big to measure is the Leaf which, even with admitted error of forgetting to include the Government grants of €10,000, would now show EV’s as having the best residual values on the market."
The DoneDeal report also suggested that diesel values had fallen 43% in three years but Mr Gleeson says the analysis was based on diesel cars in the €30-35,000 price bracket, which were compared with petrol cars in the €17,000 region. He points out that more expensive cars always depreciate more quickly.
Nissan Ireland says it is seeing the opposite to what DoneDeal’s research suggested - that one of of the strengths of EVs now lies in their residual value and they are commanding excellent second-hand prices.
The company said: "For example Nissan LEAF’s average depreciation rates, depending on model, and condition of the car, range between 25% and 30%. Today a Nissan Leaf 30KW SE purchased in 2016 for €25,000 (after grant) is being advertised for sale on dealer websites at €18,000 and it is getting that price – a depreciation of around 28%.
"The average depreciation rate of a new car is 30% - so the Nissan Leaf is outperforming the average depreciation rate."
Renault said a 2016 Zoe Expression, currently listed at €10,900 on DoneDeal by Donagh Hickey Motors, had an original RRP of €17,490 after grants and VRT relief, representing 38% depreciation. The ad, listed only two days ago, has "already generated significant interest".
The company said: "It's important to note that values for the 2017 model, when Renault increased Zoe’s range to over 300km, are even stronger. A 2017 Zoe Dynamique Nav sold recently for €23,950 - this is 87% of the original RRP (after grants and VRT relief). This two-year old Zoe has held its value far better than most petrol or diesel vehicles."
Patrick Magee, Country Operations Director for Renault Ireland added: "The report could have a serious impact on EV sales today. This type of analysis is unhelpful for the progression of EV's in this country. The Irish EV market is up 170% compared to last year, with Zoe sales growing even faster.
"With regards to the residual value of EVs, we are happy that the three-year-old depreciation is mid 30%, but even happier that residuals are improving as a two-year-old is at 87% of the original RRP."