A race is on to certify battery health and performance in used electric vehicles. A clutch of startups is scrambling to help buyers figure out how much a secondhand EV is worth. That’s because, unlike traditional combustion-engine cars, a vehicle’s value depends mainly on its battery’s driving range and ability to hold a charge. Those factors can degrade over time, making it hard to determine an accurate used car price.
The challenge is significant because EVs are expected to enter the used car market in large numbers in coming years, driven by the end of federal tax credits and falling prices for new EVs. Accurately valuing those used vehicles is critical to mitigating risks and ensuring a healthy market, says a former Tesla engineer who runs battery-testing startup Battery Quick Check.
It’s also necessary because EVs have higher initial costs than comparable gasoline-powered vehicles, mainly due to the battery. While they are often cheaper to operate over the long haul thanks to lower fuel and maintenance costs, a high-end EV can still cost thousands more upfront than the average new vehicle. That gap should narrow as production volumes rise and battery costs fall, but in the meantime, it can make EVs appear less affordable than they are.
One solution is using a battery test, which can be tricky. Battery Quick Check, for example, can measure a used EV’s state of charge but not its actual capacity. According to experts, the best test is a full-range drive that includes sustained cruising at highway speeds, which tends to drain batteries more quickly than stop-and-go driving. Getting that kind of test done can be costly, though, and many car dealers want to avoid bothering with it because they generate up to half their profits from repairs and maintenance, which electric cars require significantly less than gas-powered vehicles.
The result is that a handful of companies are developing technology to predict a used EV’s battery life with a fair degree of accuracy based on the way it has been driven and how it has been stored. Seattle startup Recurrent, for instance, has signed up 20,000 EV owners who track their batteries’ performance and offer them free predictions of the remaining lifespan. Owners who take care of their batteries can expect to earn a premium of thousands of dollars on the resale market, Recurrent’s chief executive says.
Some of these services are already being used by car resale sites such as Edmunds and Black Book. Several manufacturers, including BMW, offer their battery-state-of-health tests this year at dealerships nationwide and in Europe. Carmakers are eager to do so because they know that if buyers can rely on the information, it will reduce the risk of expensive and embarrassing lemons entering the used market. A lemon-free used EV marketplace will support the growth of an early-stage market for this new type of vehicle.