It’s a big leap, going from internal combustion engines to electric vehicles (EVs), from the petrol station to the charging station. It’s also a leap, into the dark, when it comes to resale values (RV) for EVs.
A guess would be that RV for EVs won’t be great, given that the technology is moving fast and what’s on sale today in the EV market might be outdated relatively quickly, compared to the mature technology that is ICE. But Mercedes-Benz Malaysia (MBM) sees it completely differently.
MBM already has Agility financing packages for the earlier-launched EQA and just-launched EQS, and to come up with the payment structure for Agility, they first have to have estimated residual values of the EVs three and five years down the line. Unlike ICE cars, there’s no trend to follow here.
What RV is MBM projecting for its EVs? Paultan.org posed this question to Mercedes-Benz Malaysia’s head of sales and marketing, Michael Jopp, and president and CEO Sagree Sardien, at last week’s EQS/EQB/EQC launch, and they shared an interesting point of view that we didn’t expect. According to MBM, RV for EVs will be higher even than that of ICE vehicles.
“We take a similar approach as we do the ICEs. In terms of prediction, what we globally see is the RV for EVs are sometimes significantly higher compared to combustion engine vehicles, and this is also going to be our approach for Malaysia. The Agility offers will be more attractive compared to similar ICE so we’re actually predicting higher residual values,” Jopp said.
Some might point out the relatively poor RV of electrified vehicles (hybrids and PHEVs) compared to their pure-ICE counterparts, but Jopp doesn’t think that the trend will apply to EVs.
“First of all, it’s the matter of the vehicle, the technology. Most importantly it’s the function of supply and demand. At this moment we foresee that demand will be significantly higher than supply for EVs, which is global and most likely sustainable over a longer period. Which in return, or as a consequence, will lead to higher RV,” he said.
Sardien described MBM’s strong EV RV projection as the carmaker standing behind its products. “RV is always a prediction and a forecast. But as a brand, we have to stand behind our EVs, and that’s why we’re quite confident in the RV that we put. We’re bold enough to say, look, we want a higher RV because we’re convinced that we have great tech, great vehicle, we have a demand for our asset.
“And the right mix of supply and demand as mentioned by Michael will certainly give us optimum RV. Of course, it will be a test of the market like it is everywhere else, but already early indications for our European markets already prove that RV is relatively stable if not better (than ICE),” she added.
There you have it, the reasons behind why Mercedes-Benz thinks that RV for EVs will be good. They could well be right, but Malaysia is a rather unique market – time will tell. Note that EVs in Malaysia are currently tax-free, so unlike in most other markets, EVs are priced similarly or even lower than comparable ICE models. For instance, the EQS is slightly cheaper than the S-Class PHEV here.