Electric vehicles (EVs) have been touted as the next generation of transportation, but for early adopters, they’ve become a financial black hole.

According to a new study by online marketplace iSeeCars.com, the average resale value of a used EV that’s less than five years old plunged by 31.8% over the last 12 months.

In dollar terms, that’s a staggering $14,418.

While it’s true that all cars depreciate in value as soon as they’re driven off the lot, the price of comparable gas-powered vehicles declined by just 3.6%.

Despite being the undisputed champion of electric car sales in the U.S., used Teslas depreciate in value the quickest, falling 28.9% year-over-year.

That’s more than double the decline of the second-place Alfa Romeo.

The iSeeCars study analyzed 1.8 million one-to-five-year-old used cars sold in February 2023 and February 2024.

“The value a new car loses in the first few years is the single most expensive aspect of owning a new vehicle,” said Karl Brauer, executive analyst at iSeeCars. “As more new car shoppers become aware of the massive drop in EV values, they will be less interested in buying one.”

EV drivers spend more money on their cars and end up selling them at a much steeper discount—a one-two punch that makes little sense for ordinary Americans.

The problem with EVs

Despite their potential, electric cars simply aren’t practical for many drivers.

As Bloomberg notes, high prices, expensive financing rates, and so-called “range anxiety” are the main reasons why Americans are struggling to afford these vehicles.

This also partly explains why annual EV sales growth slowed from 60% in 2022 to just 47% in 2023. According to UBS Group, growth is expected to slow to a mere 11% this year.

“It all pivoted really quickly,” according to Mickey Anderson, a car dealer who witnessed a steep drop in EV demand at various locations. In his experience, buyers who are shopping for a daily commute vehicle find EVs “more expensive and less useful.”

“We have to have a more reliable charging network,” Anderson explained. “People have to have confidence that they can get their kids to the doctor’s appointment, that they can get to work on time and that they can use this vehicle for vacations.”

Consumers have also read about the horror stories of long wait times at electric charging stations or people not being able to charge their car at all due to unreliable infrastructure.

“Range is one thing that we know a lot of consumers care about,” according to Consumer Reports’ Alex Knizek. “Charging anxiety becomes a prominent thing—a charger might be broken or maybe charging at a lower rate than advertised.”

In spite of the somewhat erratic journey toward EV adoption, the government isn’t giving up on EVs just yet.

Building an EV charging network

Earlier this year, the White House issued a statement promising “new actions” to lower the cost of electric vehicles and build a national network of charging stations.

These actions include providing EV charging credits for two-thirds of Americans and new Department of Transportation investments in charging technology and infrastructure.

According to the White House, more than $25 billion has been invested in national EV charging infrastructure to date.

While these are positive steps, critics say timelines for implementation have left early EV adopters hanging out to dry.

As The Washington Post reported, President Biden has vowed to build 500,000 EV charging stations by 2030. But so far, only seven stations are operational.

“I think a lot of people who are watching this are getting concerned about the timeline,” said Alexander Laska, deputy director for transportation and innovation at Third Way, a Washington, D.C.-based think tank.

The Department of Energy claims that part of the reason for the slow rollout is that new chargers are being held to a much higher standard than older technology.

“We are building a national EV charging network from scratch, and we want to get it right,” a spokesperson for the Federal Highway Administration told The Washington Post.

“After developing program guidance and partnering with states to guide implementation plans, we are hitting our stride as states move quickly to bring [National Electric Vehicle Infrastructure] stations online.”