EVs are losing 42% of their value in 2 years: One banker explains what's going wrong

Electric cars may be the future, but their resale value is stuck in reverse. According to investment banker Sarthak Ahuja, used EVs are depreciating twice as fast as their petrol-diesel counterparts—and the battery is to blame.

In a LinkedIn post aimed at prospective buyers, Ahuja warns that EVs lose around 42% of their value within two years, compared to just 20% for traditional fuel vehicles. “You get a much poorer resale value and the depreciation on the car is much higher as an EV,” he wrote.

The culprit? Battery uncertainty. EV batteries make up 30–40% of a vehicle's total cost, but buyers in the used market have no standard way to assess their health. “There is no true battery health meter... every manufacturer uses their own software,” Ahuja noted, calling out the lack of industry-wide diagnostics.

He likens the issue to early smartphone resale hesitations, when buyers avoided second-hand devices because battery life was too unpredictable. With EV tech advancing quickly, newer models often offer better range, making older ones feel obsolete even faster.

To protect resale value, Ahuja suggests buyers ask three key questions:

• What’s the battery warranty? Some companies, like BYD, now offer 8-year warranties. Tata may go up to 15 years—but typically only for first owners.
• Can the battery be swapped or rented? MG, for instance, reportedly offers battery rental based on per-kilometer pricing. Buyers should check if Battery as a Service (BaaS) is an option.
• Buying used? Get a battery health certificate. A “State of Health” (SoH) certificate from the carmaker should show less than 2% battery degradation per year, Ahuja recommends.

“Maybe get certified pre-owned to be safe,” he adds.

As EV sales rise, so do questions about long-term value—making battery policy a critical factor in the buying decision.