Quantifying Plug-in Electric Vehicle Mileage and Resale Value

## Quantifying Plug-in Electric Vehicle Mileage and Resale Value

**.white[John Paul Helveston]**, George Washington University 
Lujin Zhao, George Washington University 
Laura Roberson, George Washington University 
Eliese Ottinger, George Washington University 
Saurav Pantha, George Washington University

June 20, 2024

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# .center[Two Studies, One Dataset]

### Measuring Electric Vehicle **Mileage** in the United States

Zhao, L., Ottinger, E., Yip, A., & Helveston, J.P. (2023) “[Quantifying electric vehicle mileage in the United States](https://www.cell.com/joule/abstract/S2542-4351(23)00404-X)” _Joule_. 7, 1–15.

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### Measuring Electric Vehicle **Resale Value** in the United States

Roberson, Laura A., Pantha, S., & Helveston, J.P. (2024) “[Battery-Powered Bargains? Assessing Electric Vehicle Resale Value in the United States](https://iopscience.iop.org/article/10.1088/1748-9326/ad3fce)” _Environmental Research Letters_.

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### .center[**Data**: ~13M used vehicle listings from 60k dealerships (2016 - 2022)]

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## Quantifying Electric Vehicle Mileage in the United States

Lujin Zhao (Ph.D. Student) 
Eliese Ottinger (Undergraduate RA) 
John Paul Helveston, Ph.D.

The George Washington University

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# .center[We really need to understand PEV usage]

### - PEV emissions reduction benefit **depends on vehicle usage** .font80[[Jenn (2020)](https://www.nature.com/articles/s41560-020-0632-7)]

### - Modelers typically assume **BEV miles = CV miles**

### - Revenue from proposed mileage tax **depends on vehicle usage** .font80[[Metcalf et al. (2022)](https://doi.org/10.1086/722672); [Zhao and Mattauch (2022)](https://doi.org/10.1016/j.jeem.2022.102747); [Davis and Sallee (2020)](https://doi.org/10.1086/706793)]

### - PEV adoption depends on **how well PEVs substitute for CVs** .font80[[Xing et al. (2021)](https://doi.org/10.1016/j.jeem.2021.102432)]

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### .center[Conflicting prior results on BEV mileage]

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### .center[.blue[Conflicting prior results on BEV mileage]]

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### .center[.red[Inconsistent data quality in prior studies]]

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## BEVs are driven significantly less than other powertrains

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### Teslas driven more than non-Tesla BEVs (but not as much as CVs)

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## BEVs are driven significantly less than other powertrains

`$mileage = \beta_0 + \beta_1age+\beta_2{age*powertrain}+\beta_3{age}*cents\_p\_mile+\epsilon_i$`

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### .red[BEVs driven 4,500 miles less than CVs on average]

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### BEVs driven 4,500 miles less than CVs on average

### .red[Non-Tesla BEVs: -5,400 miles]

### .blue[Tesla: -2,800 miles]

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**Non-linear range effect**:

+10 mi range:

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**Non-linear range effect**:

+10 mi range:

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## Key takeaways

### - BEVs are driven significantly less than other powertrains: .red[Non-Tesla BEVs: -5,400 miles]; .blue[Tesla: -2,800 miles]

### - Far less variability in BEV mileage than CV mileage (BEVs only substituting for lower-mileage CV usage)

### - BEV mileage less sensitive to operating cost than CV mileage

### - Range increases mileage for low-range BEVs more than high-range BEVs

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### Battery-Powered Bargains? Measuring Electric Vehicle Resale Value in the United States

Laura Roberson (Ph.D. Student) 
John Paul Helveston, Ph.D.

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## The vehicle resale market is critically important

## 70% of sales are used vehicles

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## Used vehicles are more affordable (pre-covid)

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# .center[We really need to understand PEV resale value]

### - Depreciation is a key component in "Total Cost of Ownership" (TCO) models, e.g. [ANL's TCO Study](https://publications.anl.gov/anlpubs/2021/05/167399.pdf)

### - "Resale anxiety" a potential obstacle to electric vehicle adoption [Brückmann et al. (2021)](https://doi.org/10.1088/1748-9326/ac3531)

### - BEV buyers nervous about depreciation tend to lease rather than buy [Dua et al. (2019)](https://www.sciencedirect.com/science/article/pii/S235248471930068X)

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## Prior research suggests PEVs depreciate faster than CVs

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# Value Retention Rate: `$r = \frac{Listing Price}{MSRP}$`

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## BEVs & PHEVs are depreciating worse than CVs and HEVs

### (Except .blue[Tesla])

Data: All listings between 2016 - 2019 (inclusive)

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# Modeling retention rate as exponential decay

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## Newer PEVs are holding value better than older PEVs

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## Longer-range BEVs hold value better, w/diminishing returns at 200+ miles

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## Used EVs gain additional benefit from new vehicle subsidies with no additional cost to gov’t

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## COVID-19 had substantial impact on used vehicle pricing

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## Key takeaways

### - BEVs have depreciated faster than CVs, but this is changing!

### - Newer model BEVs with higher ranges are holding their value more similarly to CVs.

### - Subsidies for new BEVs pass ~3% lower prices in used market

### - Post COVID19 pandemic used prices are up ~40%

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# Thanks!

### Slides:

### https://slides.jhelvy.com/2024-issst-conf/

@jhelvy@fediscience.org <svg aria-hidden="true" role="img" viewBox="0 0 448 512" style="height:1em;width:0.88em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:white;overflow:visible;position:relative;"><path d="M433 179.11c0-97.2-63.71-125.7-63.71-125.7-62.52-28.7-228.56-28.4-290.48 0 0 0-63.72 28.5-63.72 125.7 0 115.7-6.6 259.4 105.63 289.1 40.51 10.7 75.32 13 103.33 11.4 50.81-2.8 79.32-18.1 79.32-18.1l-1.7-36.9s-36.31 11.4-77.12 10.1c-40.41-1.4-83-4.4-89.63-54a102.54 102.54 0 0 1-.9-13.9c85.63 20.9 158.65 9.1 178.75 6.7 56.12-6.7 105-41.3 111.23-72.9 9.8-49.8 9-121.5 9-121.5zm-75.12 125.2h-46.63v-114.2c0-49.7-64-51.6-64 6.9v62.5h-46.33V197c0-58.5-64-56.6-64-6.9v114.2H90.19c0-122.1-5.2-147.9 18.41-175 25.9-28.9 79.82-30.8 103.83 6.1l11.6 19.5 11.6-19.5c24.11-37.1 78.12-34.8 103.83-6.1 23.71 27.3 18.4 53 18.4 175z"/></svg> 
@JohnHelveston <svg aria-hidden="true" role="img" viewBox="0 0 512 512" style="height:1em;width:1em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:white;overflow:visible;position:relative;"><path d="M459.37 151.716c.325 4.548.325 9.097.325 13.645 0 138.72-105.583 298.558-298.558 298.558-59.452 0-114.68-17.219-161.137-47.106 8.447.974 16.568 1.299 25.34 1.299 49.055 0 94.213-16.568 130.274-44.832-46.132-.975-84.792-31.188-98.112-72.772 6.498.974 12.995 1.624 19.818 1.624 9.421 0 18.843-1.3 27.614-3.573-48.081-9.747-84.143-51.98-84.143-102.985v-1.299c13.969 7.797 30.214 12.67 47.431 13.319-28.264-18.843-46.781-51.005-46.781-87.391 0-19.492 5.197-37.36 14.294-52.954 51.655 63.675 129.3 105.258 216.365 109.807-1.624-7.797-2.599-15.918-2.599-24.04 0-57.828 46.782-104.934 104.934-104.934 30.213 0 57.502 12.67 76.67 33.137 23.715-4.548 46.456-13.32 66.599-25.34-7.798 24.366-24.366 44.833-46.132 57.827 21.117-2.273 41.584-8.122 60.426-16.243-14.292 20.791-32.161 39.308-52.628 54.253z"/></svg> 
@jhelvy <svg aria-hidden="true" role="img" viewBox="0 0 496 512" style="height:1em;width:0.97em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:white;overflow:visible;position:relative;"><path d="M165.9 397.4c0 2-2.3 3.6-5.2 3.6-3.3.3-5.6-1.3-5.6-3.6 0-2 2.3-3.6 5.2-3.6 3-.3 5.6 1.3 5.6 3.6zm-31.1-4.5c-.7 2 1.3 4.3 4.3 4.9 2.6 1 5.6 0 6.2-2s-1.3-4.3-4.3-5.2c-2.6-.7-5.5.3-6.2 2.3zm44.2-1.7c-2.9.7-4.9 2.6-4.6 4.9.3 2 2.9 3.3 5.9 2.6 2.9-.7 4.9-2.6 4.6-4.6-.3-1.9-3-3.2-5.9-2.9zM244.8 8C106.1 8 0 113.3 0 252c0 110.9 69.8 205.8 169.5 239.2 12.8 2.3 17.3-5.6 17.3-12.1 0-6.2-.3-40.4-.3-61.4 0 0-70 15-84.7-29.8 0 0-11.4-29.1-27.8-36.6 0 0-22.9-15.7 1.6-15.4 0 0 24.9 2 38.6 25.8 21.9 38.6 58.6 27.5 72.9 20.9 2.3-16 8.8-27.1 16-33.7-55.9-6.2-112.3-14.3-112.3-110.5 0-27.5 7.6-41.3 23.6-58.9-2.6-6.5-11.1-33.3 2.6-67.9 20.9-6.5 69 27 69 27 20-5.6 41.5-8.5 62.8-8.5s42.8 2.9 62.8 8.5c0 0 48.1-33.6 69-27 13.7 34.7 5.2 61.4 2.6 67.9 16 17.7 25.8 31.5 25.8 58.9 0 96.5-58.9 104.2-114.8 110.5 9.2 7.9 17 22.9 17 46.4 0 33.7-.3 75.4-.3 83.6 0 6.5 4.6 14.4 17.3 12.1C428.2 457.8 496 362.9 496 252 496 113.3 383.5 8 244.8 8zM97.2 352.9c-1.3 1-1 3.3.7 5.2 1.6 1.6 3.9 2.3 5.2 1 1.3-1 1-3.3-.7-5.2-1.6-1.6-3.9-2.3-5.2-1zm-10.8-8.1c-.7 1.3.3 2.9 2.3 3.9 1.6 1 3.6.7 4.3-.7.7-1.3-.3-2.9-2.3-3.9-2-.6-3.6-.3-4.3.7zm32.4 35.6c-1.6 1.3-1 4.3 1.3 6.2 2.3 2.3 5.2 2.6 6.5 1 1.3-1.3.7-4.3-1.3-6.2-2.2-2.3-5.2-2.6-6.5-1zm-11.4-14.7c-1.6 1-1.6 3.6 0 5.9 1.6 2.3 4.3 3.3 5.6 2.3 1.6-1.3 1.6-3.9 0-6.2-1.4-2.3-4-3.3-5.6-2z"/></svg> 
jhelvy.com <svg aria-hidden="true" role="img" viewBox="0 0 640 512" style="height:1em;width:1.25em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:white;overflow:visible;position:relative;"><path d="M579.8 267.7c56.5-56.5 56.5-148 0-204.5c-50-50-128.8-56.5-186.3-15.4l-1.6 1.1c-14.4 10.3-17.7 30.3-7.4 44.6s30.3 17.7 44.6 7.4l1.6-1.1c32.1-22.9 76-19.3 103.8 8.6c31.5 31.5 31.5 82.5 0 114L422.3 334.8c-31.5 31.5-82.5 31.5-114 0c-27.9-27.9-31.5-71.8-8.6-103.8l1.1-1.6c10.3-14.4 6.9-34.4-7.4-44.6s-34.4-6.9-44.6 7.4l-1.1 1.6C206.5 251.2 213 330 263 380c56.5 56.5 148 56.5 204.5 0L579.8 267.7zM60.2 244.3c-56.5 56.5-56.5 148 0 204.5c50 50 128.8 56.5 186.3 15.4l1.6-1.1c14.4-10.3 17.7-30.3 7.4-44.6s-30.3-17.7-44.6-7.4l-1.6 1.1c-32.1 22.9-76 19.3-103.8-8.6C74 372 74 321 105.5 289.5L217.7 177.2c31.5-31.5 82.5-31.5 114 0c27.9 27.9 31.5 71.8 8.6 103.9l-1.1 1.6c-10.3 14.4-6.9 34.4 7.4 44.6s34.4 6.9 44.6-7.4l1.1-1.6C433.5 260.8 427 182 377 132c-56.5-56.5-148-56.5-204.5 0L60.2 244.3z"/></svg> 
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# Extra slides

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???

BEVs: ~7k mi/yr

All others: ~11k - 12k mi/yr

Far less variability in BEV mileage than CV mileage

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### .center[BEV mileage less sensitive to operating cost than CV mileage]

1 cent increase in operating cost:

BEV: -69 mi/yr 
CV: -136 mi/yr

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### .center[BEV mileage less sensitive to operating cost than CV mileage]

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1 cent increase in operating cost:

BEV: -69 mi/yr 
CV: -136 mi/yr

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# Why low BEV mileage?

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# Why low BEV mileage?

### **Intra-household substitution?**

Maybe current adopters have multiple cars?

Perhaps, but NHTS data suggests **secondary cars are only driven 1,000 - 2,000 miles less per year**.

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# Why low BEV mileage?

### **Maybe newer models are driven more?**

Some (limited) evidence this may be the case

(MY 2019: only 10,484 listings, max age of 3.2 years old)

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# Why low BEV mileage?

### **Selection bias?**

Maybe current adopters just have lower driving needs?

No way for us to measure this, but it seems very plausible

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## `$\frac{Price}{MSRP}$`

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## `$\frac{Price}{MSRP - Subsidy}$`

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### PEV subsidies for new cars (should) impact used car pricing

### New Market

(MSRP - Subsidy = Price) 
$30,000 - $7,500 = **$22,500**

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### Used Market

(Assuming adequate supply) 
Max Price = **$22,500**

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## Two year `$r$` by model shows huge gains in newer BEVs