Battery impact on used BEV evaluation
Currently, without signals or certificates for the actual battery quality (SoH), most recently launched C-segment BEV models will be trading at approx. €18,450 on average after three years, representing 47% of the average original list price.
Providing a Battery Health Report (BHR) with a proven battery quality of 98% SoH, with a strong signal of a battery’s remaining capacity, could significantly increase RVs for BEVs. A higher SoH directly correlates with the possible range of the electric car. The 5% higher SoH of a better-treated battery represents not only a 5% greater range but also lower future degeneration of the battery and thus the range, which would be appreciated by the future owner. Autovista Group estimates that 1% SoH improvement (achieved via the stated driving profiles) equals an RV improvement of approx. 0.5%. RVs of three-year old latest-generation C-segment BEVs would achieve a 2.4% uplift for better-treated batteries between the worst and the best treatment scenario. This represents a €450 increase in price for a typical vehicle (Figure 2). The financial impact of a higher-signalled battery quality is substantial. In the C-segment, a 2.4% higher used-car price results in a €4.5 million improvement for every 10,000 used BEV transactions.
Figure 2: Average C-segment BEV forecast RV, 36months / 45,000km, trade, Germany; latest generations Hyundai e-Ioniq, Nissan Leaf, Volkswagen e-Golf
Autovista Group BEV RV evaluation / methodological background
Autovista Group introduced an RV-setting framework particular to BEVs more than nine years ago. At the time, there were few actual used-car market transactions available to back-test the framework. Today, more transactions are taking place and the methodology is robust and substantiated in real-market observations. The methodology confirms the considerably high share of value of the battery within the BEV asset value. Autovista Group lets the battery depreciate on a curve separate to the vehicle-depreciation curve. One of the most substantial value contributors is the length of the extended battery warranty. Autovista Group accrues battery-replacement costs and deducts them from the residual value. For example, 10% of anticipated battery-replacement costs are deducted two years and 30% one year before the end of the warranty. Autovista Group also evaluates running-cost advantages of the BEV versus the internal combustion engine and applies them as a factor in the BEV RV assessment model. Important: The worse-treatment scenario is the underlying scenario for residual-value formation in the absence of a BHR.
TÜV Rheinland Valuation Method
TÜV Rheinland has many years of excellent expertise in the assessment and evaluation of vehicles, used vehicles and new vehicles in logistics.
Within the vehicle evaluation process, the vehicle is identified by its chassis number and vehicle-specific data such as first registration, owner history and mileage is recorded. The TÜV Rheinland experts (certified car master craftsman and engineers) then take a close look at the vehicle in order to record all factors that influence its value. These include, among others, the recording of any optional equipment, documentation of the maintenance and service work carried out and due, the functional testing of essential equipment, a test run and a visual inspection of the vehicle’s condition. The paint layer thicknesses are measured and the vehicle is examined for any repaired previous damage as well as any damage still present. The information provided by the workshop from the event memories is evaluated and any damage and defects that exceed normal wear and tear are recorded and taken into account to adjust value depending on age and mileage. The entire process is partially automated with the support of various innovative digital tools and applications.
TÜV Rheinland cooperates with TWAICE in the development of test procedures for the future-oriented determination of the residual value of the traction battery in BEVs and PHEVs. Approaches such as selective and permanent testing and evaluation of battery data are pursued here. This allows statements to be made about the remaining capacity as well as forecasts of the remaining operating time in the vehicle.
To determine used electric vehicles’ (BEV, PHEV) current market values, dealer purchase and sales values (HEK/HVK), TÜV Rheinland enriches its classical vehicle evaluation process, considering common used-car trade platforms and market reports, along with the evaluation of the battery data. The final valuation appraisal contains a detailed list of all recorded data and factors influencing the values as well as photographic documentation, which in future can also include a battery certificate.