Residual value of combustion cars is collapsing in China

Residual value of combustion cars is collapsing in China

In the world's largest car market, petrol and diesel cars are worth next to nothing the moment they leave the dealership. As the Chinese government accelerates electrification with massive subsidies and restrictions on combustion vehicles, demand for used thermal cars has collapsed. The result is an unprecedented plunge in residual values.

The contrast with the Spanish market

While combustion cars in China are losing value at a dizzying pace, the reality in Spain is very different. A 15-year-old small car with more than 200,000 kilometres sells for 5,000 euros; a 10-year-old one for 10,000. Cars that once went straight to the scrapyard now fetch prices that surprise even the experts. High-end models such as the Mercedes S500 or the BMW 530d hold on to their value, and their owners wonder why they should ever sell them.

Electrification vs. the used car market

At the same time, used electric cars face an even bigger problem. In China they are barely repaired: when the battery fails, the car is simply written off. In Europe, antiestéticar of replacement costs drives buyers away. Some analysts predict that, far from being worth anything, people will eventually have to pay to get rid of an old electric car.

With these figures, the future of the used car market seems to be heading towards a paradox: thermal cars are worth less and less in the country that sells the most cars, while in Spain they cling to prices that defy economic logic. The most striking figure: a large-engined Range Rover that burns 20 litres per 100 km still trades above any small electric car. No one knows when that mirage will break.