Would you buy a used Tesla from Elon Musk?

My father was a loan officer who specialized in auto loans. In that position, he had to be a good judge of character. I seem to remember one day he was talking about a fellow he knew and said something like the following: "He's stayed out of jail, but I wouldn't buy a used car from him."

More and more used-car buyers are going to face something like the headline's question as used electric vehicles (EVs), predominantly but not exclusively Teslas, hit the used-car market. A recent article by Jamie L. LaReau of the Detroit Free Press, and republished by papers in the USA Today network, describes the challenges consumers face in buying a used EV.

As you probably know, the single most expensive component in an EV is the battery. A complete replacement of the entire battery can cost about half the price of the car (e.g. US$15,000 for a $30,000 used car). The difficulty in buying a used EV is to figure out the condition of the battery—what its current range is and how long it will be before it has to be replaced. Currently, there is no good way to do this.

LaReau recommends taking the prospective purchase for a long test drive, preferably a couple of days, and running it on the kind of commuting route you expect to use it for. If the battery runs precariously low in such a situation, the car may not be for you. Some types of EVs allow the owner to replace individual faulty cells in the battery, thus avoiding an expensive replacement of the entire battery. I would imagine that the diagnostics for such a replacement might not be straightforward, and only dealers for that particular model could do such a check. Other types of EVs make their batteries as a unitary packaged structure that has to be replaced all at once. So when the battery's performance falls below what is required, there's really no other option but to replace the whole thing.

Dave Sargent, whose title is Vice President of Connected Vehicles at the consumer-analytics organization J. D. Power, is quoted as saying that mileage as reported by the odometer is not a good guide to battery condition. More important is the way the car was driven—highway versus city streets—what the average temperature of its surroundings were (Phoenix or Bangor is bad, Atlanta is good) and how it was charged. Fast charging, for example, is harder on batteries than the slower overnight charging that most consumers are able to do in their garages. Also, if the battery was frequently allowed to discharge lower than 20% capacity, that tends to age it faster than otherwise.

In principle, all this data could be (and maybe is) stored somewhere, either on the car's computer or the manufacturer's remotely gathered database on the vehicle. If somebody hasn't done this already, it shouldn't be hard to write software that can take such data and make an educated guess as to the overall condition of the battery at the time of sale. At this time, however, such software doesn't seem to be generally available.

Some dealers will test the battery for a fee of about $150, but that only tells you what condition it is in now, not what it's going to do in the future. A Federal government mandate to guarantee the battery in a new EV for eight years or 100,000 miles is worth something, but it is not clear if that warranty is always transferable to a used-car buyer. On the lender CapitalOne's website, an article warns that some manufacturers won't replace a battery under the federal warranty until it is totally non-functional. So even if the car would just get out of your driveway and then die, you'd be stuck with it until it wouldn't even do that. And sometimes the warranty won't transfer to subsequent owners.

All in all, anyone buying a used EV is taking a chance that the battery will not do what they want in a time sooner than they'd like. Of course, used cars in general are a somewhat risky purchase, but as a purchaser of used cars most of my life (I'm driving the first new car I ever bought, and that was only three years ago), there are ways to tell if you're getting a lemon or not, and state-mandated "lemon laws" allow consumers to return vehicles that were sold under clearly fraudulent conditions.

But the lack of expertise on the ground who can make a reliable prediction as to when an EV's battery will degrade below an acceptable level of performance is a novelty that most buyers would rather not deal with.

On the other hand, the reasons why people buy electric cars are not your usual reasons. Currently, none of the EVs available, used or new, sell for prices that would attract what you might call the typical buyer. LaReau cites statistics that say the current average price of a new EV is about $58,000 and for a used EV, you'll pay an average of $41,000. So we are talking high-end if not luxury vehicles, and buyers for whom price is not the main consideration.

I think one of the main motivations for people who buy EVs is a politico-aesthetic one: they think they are helping to avert global warming. Whether buying and using an EV really does this, considering all the manufacturing steps, the mining of lithium and other metals under less-than-ideal circumstances, and the source of electric power used to charge the thing, is a question for another time. Whether or not one really does affect global warming with an EV purchase, lots of people feel like they do, and that's what counts in marketing.

As with any used-car purchase, the old Latin motto caveat emptor ("let the buyer beware") applies in spades to buying a used EV. If the car's battery performance turns out to be a disappointment, maybe the purchaser can just look upon it as one more sacrifice made in the cause of fighting global warming. But your typical car buyer is likely to be unmoved by such sentiments, and so things will have to become a lot more transparent before used EVs become just as easy to sell as conventional gas guzzlers.

This article has been republished from the author's blog, Engineering Ethics, with permission.

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