Are you still not sure whether you should buy an e-bike or not? Are you still looking over the cost-effectiveness of these new bikes? Have you still not decided whether investing this hefty amount (how much does it cost to own an electric bike? find out in this post) in a bike would prove to be fruitful or not? In this article, we will talk about how fast do e-bikes lose value, which means – how fast to they depreciate.
How fast do e-bikes depreciate? How fast do e-bikes lose value? Normally, for well-known market brands, an e-bike depreciation rate is calculated as a straight line over a five to seven year period. This means that each year a new e-bike will lose around 1/5th to 1/7th of its original value.
Electric bikes, also known as e-bikes, are the modern, electric versions of traditional bikes. They are available in a lot of different shapes and sizes. There is the fat-tire version, a mountain bike version, moped-style e-bikes, etc. As you might already know that e-bikes need to be charged so, there are charging points for e-bikes at various places. This could be your home, your office, or various charging stations in the city you live in.
One important aspect of buying an electric bike is to know its depreciation rate. This will help to understand what this e-bike will be worth over the years. Let us walk you through the depreciation rate and value of various e-bikes, shall we?
Just to remind you that depreciation rate is the value of an asset lost over the years. The easiest method to calculate depreciation is the straight-line method. Normally, the original or purchase value of an e-bike is divided for seven years.
How fast do e-bikes depreciate?
How does the depreciation line for e-bikes go over the years? A retail e-bike usually starts losing its value (depreciate) the day you buy it. After that, it would be fair to say that an e-bike depreciates at about 15-20% per year. This all also depends on the condition of the bike and the brand you buy.
A Stromer ST2, for example, which is originally priced at 7000 dollars, will have a better market value over the years than say, Easy Motion e-bike, which originally costs 3000 dollars. For DIY kit building e-bikes, the depreciation peaks way higher.
A good analogy would be the depreciation of an iPhone vs one of the Chinese Android smartphone brands. An iPhone will hold its value for a long period of time and would resell well even used. A Chinese made Android phone will lose its value really fast and may cost nearly nothing two-three years after purchase.
How fast does e-bike components lose value?
A battery that is about 2-3 years old will most probably lose most or all of its value. A battery is a replaceable part of an e-bike and will need to be changed after a certain time in any case. But the rest of the parts usually maintain about half of their cost after a few years.
The battery and the motor make up about 65 percent of the cost of the e-bike, and after three years they might work up to 60 percent of their capacity and have no more than 20 percent of the original value.
For other forms of transport like cars, using the straight-line depreciation method is fairly accurate and can give a good estimate of how fast an asset depreciates. For an e-bike which is quite new, taking an estimate of depreciation can be a bit more complex. E-bikes are fairly new and are expensive as such. Not many people are willing to spend this luxurious amount on new bikes. So, the market for second-hand bikes is quite high.
E-bike depreciation example
For depreciation purposes, take an example Xduro RX electric mountain bike. This model used to cost 4900 dollars in 2014 to 15. Let’s say you ride this bike a lot for 2-3 years. You even go on long tours around different cities. You take this e-bike on mountain trails as well. You also don’t do much maintenance of this e-bike. It looks a bit worn out, with fallen patches of paint, some dents here and there, a few broken parts, but the battery still doing pretty fine.
Now, if you go on to sell this e-bike, what price and market value could you expect? A good estimate would be that you can expect about 2000-2500 dollars for your bike. And you may expect quite a number of customers waiting in line to get their hands on this bike.
This is because e-bikes are popular, but at the same time, they are expensive as well. Denting and painting can be re-done easily, and it would cost way less to get this bike going than purchasing a new one. The plus point was also that the battery was working fine in the Xduro RX example.
How to retain the best value in your e-bike
It is worth noting that and e-Bike, like any other asset, would depreciate fine if you take good care of it. Don’t obsess over it but don’t let it rust too. If you maintain it well, you will be able to sell it off fairly well but obviously at a much lower rate. An e-bike of good quality that has been taken care of well can last even up to 7-10 years.
Probably, a cheap bike won’t show much quality while an expensive one bought from a trusted supplier, will have good quality. However, even with a good quality bike, you may have to change the battery after a while (normally 700-1000 charge cycles). This battery replacement will generally cost you about 500-1000 dollars.
Let’s take another example. There has been an ad for ODK U500 e-bike with a gap of four years. With the battery worn-out and the bike a bit scruffy, the e-bike was placed at 650 dollars. Consider having to buy a new battery with tax. You would have a total of 1100-1500 dollars.
While the new bike of the same model costs about 2000 dollars, so, it would be safe to say that a 2000-dollar e-bike would depreciate and would retain the value of around 300 dollars after four years. The main reason for this depreciation is the battery which would have to be replaced.
It may also make sense to consider recycling e-bike batteries. Learn about a recycling example in France from this article.
Is electric bike economical? It depends on the bike type you buy, the amount of usage for the bike, and also the place at which you buy and use it. In some places, you might be relieved of taxes or other miscellaneous charges. E-bikes are certainly more economical than cars and motorcycles, for example. Why are e-bikes so expensive? Or are they? Read more in this post.
How will this e-bike be helpful in the bigger picture? For starters, an e-bike is way more eco-friendly than the bikes that use gas and other forms of fuel since it runs on electricity. Are electric bikes good for the environment? Find out in this post.
How much does an e-bike cost you? Let’s consider three years as life expectancy for a low-end bike. Take the purchase price to be at 1000 dollars. Let’s take the miles you do per week to be 150 then; it amounts to 23400 miles over the 3 years. Let’s set 120 dollars aside for parts and servicing and up to 35 dollars for electricity. Then you have a total of 1155 dollars as a 3-year cost. You can adjust the numbers according to your use. How much does it cost to own an e-bike? You can check a more detailed analysis in this post.