Rapid tech advances are bad news for EV owners
The battery technology that underpins electric vehicles is advancing at such a rapid rate that, as exciting as the latest EV models may appear to be (to buy and own), their owners are likely to take a big financial hit when the time comes to trade them in.
We’ve all been there. Come Black Friday, you’ve camped outside the computer shop to ensure you’re first in the queue to snap up that monster PC with enough scenario-summing processing punch to calculate Verstappen’s race-winning strategy for the 2027 Monaco Grand Prix (hint: even with mixed track conditions and running on 30-lap old tyres, he can start from the pitlane and still win the race).
Then you shell out your hard-earned cash for the privilege of packing enough CPU speed to render AI self-learning as elementary as the Rosetta Stone; you’re surfing the bleeding edge while high-fiving Silicon Valley’s atom-splitters (Elon Musk has just sent you a friend request – for the sixtieth time).
The only reason why you aren’t lightyears ahead of the tech curve is because You Are The Curve. Except you’re not and, if you ever were, the moment would have lasted a few days, if not hours.
Because Moore’s law says so
Why not? Because (Gordon) Moore’s law says so. It’s a now-standard IT industry phrase that defines the relentless and unending advancement of technology; specifically, it pertains to the numbers in integrated circuits doubling every 2 years, based on quantum improvements in R&D and production processes.
To us: consumers of electronic goods, that relates to everything, including memory capacity, processing power and smartphone advancements: today’s iPhone 15 is tomorrow’s Nokia 3310 (remember that?)
It’s no different with electric vehicles (EVs). Ceaseless advancements in electric car- and EV powertrain development – particularly battery- and weighting-saving tech – ensure that with each successive model, the range and performance of these vehicles improve hand over fist over their predecessors.
Most recently, Porsche’s pre-production next-gen Taycan lapped the 20.832 km-long Nürburgring Nordschleife 26 seconds quicker than its 1st-gen forebear. That’s more than a second per kilometre.
Benchmarked against internal combustion engine (ICE) technology, which has admittedly been shifted to the automotive industry’s back-burner, such inter-generational strides are simply staggering.
To demonstrate the diminished returns of progression on the ICE side at Weissach, the current 992.1-gen GT3 RS laps the same track at 6:44.848 compared with the now-replaced 991.2 car’s 6:56.4.
Almost all of that improvement can be attributed to aerodynamic gains (see above). And, make no mistake, 12 seconds is a veritable lifetime when you’re holding a stopwatch – but ultimately, it still only equates to one-third of the Taycan’s intergalactic hyperspace breakthrough at the same track.
Throughout 3 generations of Formula E – every true petrolhead’s favourite punch bag – the electric open-wheeled race cars have become increasingly faster and more efficient. In 2014, the inaugural versions debuted with 190 kW and battery capacity so limited that they required mid-race car swops.
Lessons from Formula E (ugh!)
Four years later, their successors have gained an additional 90 kW and can last an entire race. Today, the 3rd-gen cars race to 320 kph, have 350 kW and a 600 kW rapid-charging ability to top up the battery during pit stops. “The evolution is as undeniable as it is unstoppable,” booms the voice from above.
I’m sorry if I bored you there with the Formula E prattle (can you say “Attack Mode” and “Fan Boost” with a straight face?) and, admittedly, nit-picking over Nürburgring lap times is of little value to most people, what cannot be denied is that back in the real world – even if you bought an EV 2 or 3 years ago, thanks to the Moore’s law of engineering improvements in battery density, your car today is all but obsolete.
And were you to sell it, the giant strides being made in Chinese battery laboratories alone will see to it that you feel the pinch. After all, who wants a 3-year-old EV with a 250-km range and a degraded battery (the latter of which is nearly impossible to easily and affordably replace) when current EVs are pushing almost triple that, and are set to continue redefining what’s possible every 2 years from now?
Simply put: lithium-ion batteries are yesterday’s news. Sodium-ion batteries may still be a fledgling technology – but they’re made from abundant materials/more environmentally friendly (sodium can be harvested from seawater as a by-product of desalination), lighter, 30% cheaper and last twice as long.
Meanwhile, Toyota, which has resisted immense pressure to pivot its business on all-electric models (when many other legacy carmakers are far, perhaps too far, along that path), plans to make solid-state batteries central to its future EV line-up; expect TMC to launch the tech before the end of this decade.
The writing is on the wall: for now or the foreseeable future, at the risk of instant obsolescence, you do not want to buy an EV.
Driving an EV makes sense if you can lease it
Certainly, leasing one makes a lot more sense. Hire purchase makes sense because if you know that you will give the EV back after a pre-agreed period (of years and kilometres driven), you’ll be spared the shock of depreciation. EVs depreciate steeply for a variety of reasons, including their high cost of entry (usually, the pricier a car is, the faster it loses value), combined with very low demand for used examples.
As things stand, EVs are bought by a select few and most of those who want one, desire a vehicle that offers the best possible performance, efficiency (range), recharging versatility and a battery pack that has suffered zero degradation due to age and operating conditions. So, the EV game is a new-car game!
If you lease a new EV, however (I understand that Volkswagen Group Africa intends to offer the upcoming ID.4 electric crossover exclusively via a lease deal), when you return and exchange it after, say, 3 years – its newer version will probably travel 250 km more per charge while costing very little extra per month.
Financing an EV (with a balloon payment) is unwise
Amidst an avalanche of perpetual augmentation and vertical development curves, conventional finance agreements and extended ownership are incongruent with EV custodianship, which is at best temporary.
The former makes a lot more sense for ICE cars, which in the past were more engaging to drive, had more personality (only suffering from worse infotainment systems than today), but sported far more linear inter-model improvements when it came to performance or economy, making it harder to justify their regular replacement.
And that is probably one of the biggest reasons why you still have one of those (an ICE vehicle) in your garage today. And should continue to do so for a considerable period to come.
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