Here’s a number that should make every new-EV buyer wince, and every used-car shopper lean in. EV depreciation in Australia is now running at about 25 per cent in the first year alone. A petrol car loses 11.5 per cent over the same twelve months. A hybrid? Just 1.7 per cent, according to AADA and AutoGrab market data. That’s not a rounding error. That’s the used-EV market repricing itself in real time. If you’re shopping second-hand rather than selling, it’s the best news you’ll read all week.
So let’s do what nobody selling you a car will: lay out the actual numbers, explain why used EVs are falling faster than petrol cars, and show you how to pocket someone else’s depreciation without buying a lemon.
How bad is EV depreciation in Australia, really?
Bad, if you bought new. The Australian Automotive Dealer Association’s Automotive Insights Report, built on AutoGrab listings data, found a 2024-model EV retained just 78.2 per cent of its value on the second-hand market, versus 94.3 per cent for a petrol or diesel car of the same age.
Put dollars on that and it stings. On a $58,900 Tesla Model Y RWD, that first-year gap works out to roughly $12,840 gone in twelve months. And it doesn’t stop at year one: the average EV retains around 60 per cent of its value after three years, while hybrids of the same vintage hold over 90 per cent.
Every dollar of that is a wealth transfer from the first owner to the second. Your job is to be the second owner.
Model by model: what the market actually says
Averages hide the fun stuff, so here’s the model-level data. Research from AutoGrab, reported by EV Central, tracked average used listing prices from January 2023 to December 2024:
- Tesla Model 3: down from $65,990 to $46,705: a 30 per cent fall, or more than $19,000 off in under two years.
- BYD Atto 3: down 29 per cent, from $51,990 to $36,990.
- MG ZS EV: average listings fell from $48,071 to $34,300.
Translation: cars that were $50,000-plus propositions two years ago are now sitting in the mid-$30,000s, often with modest kilometres and years of factory battery warranty left. A ~$40k budget now buys what used to be a $65k car. If the Model 3 numbers have your attention, our used Tesla Model 3 buyer’s guide covers which years to target and what to check before you sign.
Why used EVs are depreciating faster than petrol cars
Four forces are doing the damage, and only one of them says anything bad about the cars themselves.
1. New prices keep getting cut
A used car’s value is anchored to the new one. When manufacturers slash new prices (and they have, hard), every existing car gets marked down overnight. New EVs in Australia now match or undercut equivalent petrol models: a BYD Dolphin at $29,990 undercuts a $38,120 Toyota Corolla ZR Hybrid. When a brand-new EV costs less than your two-year-old one did, your resale value doesn’t politely adjust. It falls off a cliff.
2. Tech churn makes older models look dated
Every six months brings new models with more range, faster charging and a lower price, much of it from Chinese brands in a price war with each other. That relentless churn drags older stock down: a 2022 EV competes against a 2026 EV the way a 2022 phone competes against a new one. Petrol cars never faced this, because a 2022 Corolla and a 2026 Corolla are basically the same car.
3. Battery fear: mostly unfounded, fully priced in
Plenty of buyers still assume a used EV battery is a ticking $20,000 time bomb, so they discount accordingly. The data says otherwise (more on that below), but the fear is baked into prices whether it’s rational or not. Irrational fear plus real data is the textbook definition of a buyer’s edge.
4. A supply wave from fleets and novated leases
The federal government made eligible EVs exempt from fringe benefits tax from 1 July 2022, which lit a rocket under novated leasing (a car lease your employer pays out of your pre-tax salary; the FBT exemption made EVs dramatically cheaper this way). Those leases typically run three to five years, and the first big batch is now coming back. Auction house Pickles is predicting a wave of ex-novated-lease EVs will boost second-hand supply over the coming years, off the back of EVs recently hitting a record 24 per cent of monthly new-vehicle sales. More supply, same pool of confident buyers: prices soften further.
The battery fear is mispriced, with one exception
Here’s the thing the market hasn’t caught up with. Pickles has been independently testing the batteries of the used EVs it auctions, and across more than 1,000 vehicles (averaging about 2.5 years old and 30,000km) the average State of Health score was 96 per cent. (State of Health, or SoH, is the battery’s current capacity as a percentage of when it was new.)
Actual battery failures are rarer still. US firm Recurrent tracked more than 30,000 EVs and found only about 0.3 per cent of EVs built from 2022 onwards have needed a battery replacement outside of manufacturer recalls.
The exception (and it’s a big one) is the older Nissan Leaf. Both earlier Leaf generations used a passively air-cooled battery with no liquid cooling, which degrades faster in Australian heat than the liquid-cooled packs in nearly every other EV. Get it wrong and the bill is real: one Australian dealer has documented a Leaf battery replacement at around $14,000 fitted, with the pack alone listed at $9,990. A cheap old Leaf with a cooked battery isn’t a bargain. It’s a deposit on a five-figure invoice.
How to exploit EV depreciation without buying a lemon
Depreciation is only your friend if the car you buy at the bottom of the curve is actually healthy. The checklist:
- Buy at two to three years old. The first owner has eaten the steepest part of the curve (roughly 25 per cent in year one alone on the AADA numbers) while the car still has most of its battery warranty ahead of it.
- Demand a battery State of Health report. Pickles now publishes SoH certificates on its tested EVs, and our guide to checking a used EV’s battery health shows how to test any car yourself. No SoH evidence? No deal, or a much lower price.
- Check the battery warranty transfers, and how much is left. Confirm the terms with the manufacturer for the exact model year before you sign anything.
- Target ex-fleet and ex-novated-lease stock. These cars are typically young, serviced on schedule, and arriving in volume, which is exactly what keeps prices honest.
- Budget for the insurance catch. CHOICE found EVs cost an average of $2,545 a year to insure versus $1,702 for petrol: about $843 more, with Tesla the dearest brand to cover. Get a quote before you buy, not after.
- Treat old Leafs as a special case. Verified SoH and a price that reflects the risk, or walk away.
Why the fall is a gift if you are buying
EV depreciation in Australia is real, steep and, for a used buyer, a genuine gift. The cars aren’t falling in value because they’re breaking; the tested fleet is averaging 96 per cent battery health. They’re falling because new prices got cut, the tech keeps moving, supply is surging and fear is still doing the pricing. That combination hands you a near-new EV for tens of thousands less than the first owner paid. To see what fair asking prices look like model by model, start with our guide to used EV prices in Australia.
Our take: a two-to-three-year-old Tesla Model 3, BYD Atto 3 or MG ZS EV with a verified battery health report is one of the best value-per-dollar buys in the Australian car market right now. Don’t buy new expecting petrol-car resale: you won’t get it. And don’t expect a bargain on a used hybrid either: they’re holding their value so well that the discount simply isn’t there. Buy the car everyone else is scared of, with the test report that proves they’re wrong.
Do EVs depreciate faster than petrol cars in Australia?
Yes. AADA and AutoGrab data shows a one-year-old EV loses about 25 per cent of its value, versus 11.5 per cent for petrol cars and under 2 per cent for hybrids.
Why are used EVs so cheap in Australia?
Four reasons: manufacturers keep cutting new-EV prices, rapid model churn makes older EVs look dated, many buyers still (mostly wrongly) fear battery failure, and a growing wave of ex-fleet and ex-novated-lease cars is lifting used supply.
Will used EV prices keep falling?
Nobody can promise, but the pressure isn’t over: Pickles expects ex-lease supply to keep building over the next couple of years, and new-price cuts haven’t stopped. Our view: there’s no need to panic-buy, but a well-priced car with a strong SoH report today beats waiting six months for a hypothetical extra $1,500 off.
Depreciation is the cost that hurts on the way out. The one that offsets it is what the car costs day to day, so it is worth reading how EV running costs actually compare with petrol. And if you have access to salary packaging, a novated lease on a used EV changes the maths considerably.
