Companies offer battery tests to help determine the price of a used electric car

For traditional cars with combustion engines, mileage and age can quickly tell potential buyers how much they should pay. But this formula does not work for electric vehicles. Their value depends primarily on their range and the battery’s ability to hold a charge. Until recently, there was no way to measure a battery’s condition, which held back sales of used electric vehicles. That is now beginning to change, as companies rush to expand battery tests that should help buyers determine what a used car is really worth. Some take only a few minutes, Reuters reported today.

One such company is British start-up Altelium, which has developed a battery health test for electric vehicles. More than 7000 dealers in the United States and over 5000 in Britain began offering certificates based on the test this year.

„If the used-car market does not function properly, neither will the new-car market, and the transition to electric power will not happen,“ said Altelium business development manager Alex Jons.

He also said that other countries, including China, had expressed interest in battery tests.

Batteries typically account for up to 40 percent of the price of a new electric vehicle. How the battery is treated is important. Charging an electric vehicle too often with a fast charger, constantly charging it when the battery is almost full, or leaving the battery fully charged for a long time can lead to rapid deterioration. Austrian company Aviloo, which has developed a test for dealers and private individuals, found that after 100.000 kilometers, the condition of an electric vehicle’s battery can vary by as much as 30 percent.

A customer looking for a used electric vehicle with 90 percent of the range of a new car may end up buying one with only 70 percent of that range because of the previous owner’s poor charging habits. This can reduce the car’s value by thousands of euros, said Aviloo CEO Marcus Berger. Volkswagen is among the company’s investors.

„With electric vehicles, mileage and age tell you nothing,“ Berger said.

„It is all about the battery,“ he added.

Car manufacturers provide information about electric vehicle range, but critics say it is often overly optimistic. Independent tests are therefore needed. A lack of information has also hurt the electric vehicle market.

According to data from Recurrent, used electric vehicle prices in the US fell 32 percent year on year in September, while prices for cars with combustion engines fell by only seven percent. In Britain, electric vehicle prices fell 23 percent in August, while prices for cars with combustion engines rose by at least four percent, AutoTrader noted. It cited consumer concerns about the lifespan of used electric vehicle batteries as the reason. Used electric vehicle prices have also been affected by the price war started by Tesla.

Data from AutoTrader and Deutsche Automobil Treuhand show that residual values for three-year-old electric vehicles in Britain and Germany are more than ten percentage points lower than those of equivalent fossil-fuel vehicles.

„Knowing the capacity of an (electric vehicle) battery will be decisive,“ said Stephanie Valdez Streaty, director of mobility research and development at Cox Automotive.

Cox Automotive owns the world’s largest used-car auction house.

Driverama, which buys hundreds of used electric cars in Germany each year to sell them in Central Europe, uses Aviloo’s system to reject electric vehicles with battery capacity below 80 percent or with battery defects, CEO Eldar Vagabov said.

The race to accurately value used electric vehicles is becoming urgent because of an expected influx of cars. More than 1.2 million new fully electric cars were sold in Europe in 2021, for example. Many will enter the used-car market in 2024, when their lease agreements expire. If used electric vehicle prices remain low, this could also bring down the prices of new cars.

Alongside start-ups, German certification agency TÜV Rheinland, which operates in more than 60 countries, is also offering tests. It has launched its Battery Quick Check service at car repair shops in Germany, developed together with start-up Twaice, and expects to introduce it in other markets next year.