Resale Value Of EVs To Be At 10-15%; To Pick Up From 2030 Stronger battery warranties beyond five years, introduction of certified resale programs by OEMs to ensure quality assurance and government incentives for buying pre-owned EVs, can help boost resale value of EVs
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The Indian four-wheeler electric vehicle (EV) market is still evolving. While overall confidence in EV ownership is rising, resale trends are yet to match those of ICE (Internal Combustion Engine) vehicles. Personal e4Ws are yet to complete their full first ownership cycle of around five years. Currently, the e4Ws witness a higher depreciation than traditional vehicles, due to concerns about battery life, software updates, the lack of standardized valuation methods and replacement costs.
"There are multiple reasons why mainstream buyers are still not coming forward to buy an EV and resale value is one of them," said Shailesh Chandra, MD, Tata Motors Passenger Vehicles Limited.
In the business to business (B2B) segment, the initial set of vehicles purchased by fleet aggregators are expected to reach the end of their first life in the next one-two years. "If the aggregators choose to sell the car at the end of the first battery cycle, the value expected will be in the range of 25-30 percent of the original purchase price, but we don't see that happening. Instead, we expect the aggregators to replace the battery pack to extend the vehicle's life by an additional three-four years, reaching a total lifespan of seven-eight years," explained Rohan Rao, partner - Industrials and Automotive, KPMG India.
Mostly, a battery replacement in 2027 is expected, and sale of used EVs will pick-up only around 2030. "However, we do not ascribe a significant value to the cars at the time of resale – 10 to 15 percent of original price," Rao added.
The e4W market is still in its infancy, accounting for only 2-2.5 percent of annual domestic 4W sales, with a total vehicle parc since FY23 standing at approximately 250,000 units compared to 11-12 million ICE 4Ws in the same period.
"There is rising adoption as more Indians explore EVs—primarily as a second car. While overall confidence in EV ownership is rising, resale trends are yet to match those of ICE vehicles. Resale value remains uncertain due to concerns around battery longevity, software obsolescence, and inconsistent valuation metrics. Having said that, the resale market is improving with extended battery warranties—most OEMs now offer at least five years—boosting confidence," said Amit Lakhotia, Founder and CEO of Park+
Additionally, as more EVs hit the used car market and technology improves, resale values are expected to stabilize.
"After a year or two, the life of an electric car doesn't end, it is going to survive much longer. As people understand this, I think the resale value of EVs is going to be stronger," said Jyoti Malhotra, MD, Volvo Cars India.
Current challenges
Unlike traditional ICE 4W, there is no standardized valuation method for e4W. Factors such as battery health, charging cycles, and technological advancements can impact the resale value of e4Ws, making it challenging for buyers and sellers to determine a fair price. The performance and lifespan of the battery are critical factors. "Potential buyers may be wary of purchasing used e4Ws due to uncertainties about battery health and the high replacement cost," added Rao of KPMG, India.
A recent report by Park+ Research Labs highlighted- 24 percent of EV owners struggle with inaccessible charging infrastructure, 23 percent face range anxiety, and 71 percent feel the lack of EV communities impacts their ownership experience. However, 74 percent of EV owners plan to stick with EVs, but resale uncertainty is one of their top concerns. Technological advancements like solid-state batteries, modular replacements, and OTA software updates will help stabilize resale values. Certified battery health reports, similar to mileage tracking in ICE cars, will be crucial in standardizing valuations.
Can innovation boost confidence?
Can technology changes in e-cars help in a positive impact on the resale value? PMSM stands for permanent magnet synchronous motor, a type of brushless motor known for high efficiency and torque, and is used in applications like electric vehicles and industrial robots. PMSM is the most prominent motor technology for e4Ws. OEMs are working on other magnet-free technologies; however, the commercial application of these technologies is still in its infancy.
The current LFP (Lithium Iron Phosphate) battery technology used by most e4W OEMs is most suitable for Indian weather conditions. "Battery technology may see an increase in energy density or alternative battery chemistries, such as sodium-ion, which will help lower battery pack weight, reduce charging times, and alleviate range anxiety," shared Rao.
"Improved longevity and efficiency will boost resale confidence. Modular battery replacements with easily swappable or upgradable battery units will reduce long-term depreciation. Over-the-air (OTA) updates and regular software improvements will keep older EVs competitive with newer models. Furthermore, certified battery health reports, similar to mileage tracking in ICE vehicles, will standardize resale pricing," explained Lakhotia of Park+.
What's next?
Going forward, stronger battery warranties beyond five years will reassure second-hand buyers. Introduction of certified resale programs by OEMs to ensure quality assurance and government incentives for buying pre-owned EVs, similar to those for new EVs, would push growth.
"Batteries in most new EVs have a manufacturer's warranty of eight years/ 100,000 kms which is a reasonable number to address battery life related concerns of EV buyers. OEM certified pre-owned e4W will increase confidence in the reliability of pre-owned e4W. Extended warranties or service packages can add value to used e4Ws and make them more appealing in the resale market," Rao concluded.
