 "carmakers, electric vehicle")
As India’s electric vehicle (EV) market moves from early adoption to a more mature phase, carmakers are sharpening their focus on a question that increasingly troubles buyers: what happens to the EV’s value a few years down the line. With the number of older EVs on Indian roads beginning to rise, manufacturers are rolling out assured buyback guarantees, resale marketplaces, and battery health assurance programmes to reduce anxiety around depreciation and battery degradation.
On Monday, JSW MG Motor India extended its assured buyback programme for EVs from three years to up to five years, an industry-first move in the mass market segment. The company said the initiative guarantees a resale value of 40-60 per cent, depending on the tenure chosen, and is available not just to private buyers but also to commercial fleet operators using the MG ZS EV.
“As a customer-centric brand, MG has always introduced initiatives like B-a-a-S (battery-as-a-service) and lifetime warranty on EV batteries that make EV ownership a delightful mobility experience,” said Anurag Mehrotra, managing director (MD), JSW MG Motor India. Resale value, he added, remained a key concern for prospective EV buyers, and the extended assured buyback was aimed at offering peace of mind and building trust in electric mobility.
The programme, facilitated by Lockton India Insurance and offered in partnership with Zuno General Insurance, is not linked to any loan or finance scheme. Customers can choose to retain, surrender or upgrade their vehicles at the end of the selected tenure, reducing depreciation risk and making it easier to switch to a newer model.
Such initiatives are gaining prominence as battery EVs now account for about 4.6 per cent of India’s passenger vehicle (PV) sales. Between January and November, registrations of electric PVs rose 78 per cent year-on-year (Y-o-Y) to 160,740 units. JSW MG Motor, the second-largest EV seller after Tata Motors, has a market share of around 30 per cent, with sales more than doubling to over 47,000 units during the period.
Tata Motors, which dominates the EV space, has also been working on strengthening the resale ecosystem. A Tata Motors Passenger Vehicles spokesperson told Business Standard: “Tata Motors conducted a pilot project to create a dedicated online marketplace for pre-owned EVs, reinforcing its commitment to strengthening the EV ecosystem and improving customer accessibility. To ensure peace of mind for second owners, it has also introduced comprehensive battery health checks and refurbishment services.”
Maruti Suzuki, which is preparing to enter the EV market with its first electric SUV, has similarly flagged resale assurance as a priority. Senior executives have indicated that the company plans to offer an assured buyback and B-a-a-S framework for its EVs, aimed at protecting customers from uncertainty around battery life and future valuation.
Industry executives point out that EV buyers face greater uncertainty because the battery alone accounts for nearly 40 per cent of an EV’s cost, and its long-term degradation directly impacts resale value. With only a limited number of EVs currently circulating in the second-hand market, an organised resale ecosystem is still nascent. Assured buyback programmes of five years or more, analysts say, could help establish price benchmarks early and smoothen the transition to a larger, more confident EV market in India.
Dealer sources said that typically EV prices reduce in line with their internal combustion engine (ICE) counterparts. This is around 25 per cent in the first year, and thereafter, it depends on usage (km travelled and battery life).
Original equipment manufacturers (OEMs) feel the used EV market is likely to closely mirror the new EV market with a lag of three-four years.
“The used EV market is likely to closely mirror the new EV market with a lag of three-four years, as early adopters upgrade to longer-range and more advanced EVs. Major volumes of EVs are from 2021-22. And so, we will see the initial lot of upgraders in 12-24 months,” an industry insider said.
Dealers say they are already handling customers who wish to exchange their older EVs for new ones.
“Several people who are value or cost conscious are now opening up to buying used EVs, as warranties on the batteries are for 8-10 years. These batteries can last for far more than that depending on charging cycles. Up to 2,000-3,000 charging cycles are possible. Even if one charges once a week, it works out to 52 charges a year. Or a three-four-year-old EV would have probably been charged hardly 200 times,” said one dealer. “The cells can be replaced, if needed, and the EV is good to go,” he added.
For a smoother transition
- Car OEMs going beyond initial purchase, institutionalising battery health and resale benchmarks
- JSW MG Motor India extended its assured buyback programme from three years to up to five years
- Tata Motors conducted a pilot project to create dedicated online marketplace for pre-owned EVs
- Maruti Suzuki plans to offer assured buyback and B-a-a-S framework
- Industry executives said EV buyers face uncertainty because battery alone accounts for nearly 40% of an EV’s cost
