Chevy Bolt and Porsche Taycan top EVs in ALG’s 2022 Canadian residual value awards
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Feb 15, 2022
Josh Kozelj

ALG split EVs into two categories for this year’s awards as the market grows and leasing companies and consumers are paying greater attention to used EV selling prices

2022 Chevrolet Bolt earns ALG’s Canadian residual value award for the mass market EV segment. Photo: Chevrolet

ALG split EVs into two categories for this year’s awards as the market grows and leasing companies and consumers are paying greater attention to used EV selling prices

As the electric vehicle market matures, and the pool of zero-emission vehicles on the road grows, those vehicles’ residual values — what they’re worth after several years of use — also gains significance.

Residual values determine used car prices, play a big role in the cost of leasing, and influence new car buying decisions.

That’s why the annual residual value awards from ALG, a division of J.D. Power, always bear watching.

Eric Lyman
Eric Lyman, Vice President of ALG. Photo: Eric Lyman

Winning vehicles are those that ALG projects will hold the largest percentage of the manufacturer’s suggested retail price (MSRP) in their segment. This year, for its 2022 Canadian awards, ALG chose the Chevrolet Bolt and Porsche Taycan in the mass market and premium electric segments, respectively.

“We’re still in the early nascent days of EVs in the market,” says Eric Lyman, vice president of ALG, in a video call with Electric Autonomy Canada

Separate categories a sign of growth

ALG made its selections from a field of 16 EVs built by 13 manufacturers (full list at bottom). Residual value projections are for three years in the premium category and four years for mass market. Among the factors ALG takes into consideration when ranking EVs are upfront cost, distance range, and overall vehicle execution.

“The drivers of EV [residual value] are a little bit different than what we see in the mass market,” says Lyman.

Front corner view of Porsche Taycan
2022 Porsche Taycan EV earns ALG’s Canadian residual value award for the premium electric segment. Photo: Porsche Taycan

The separate rankings for premium and mass market EVs are new this year, a reflection of growth in the space. 

For the Porsche Taycan, which led the premium category, Lyman says a combination of product execution — such as implementing instantaneous torque — and the company’s strong reputation as a sports car manufacturer vaulted it to the top. 

Additionally, Lyman’s research on Porsche vehicles in the U.S. revealed the Taycan’s performance is similar to that of the 911. 

“You get this interesting combination of all the Porsche legacy, plus the forward-looking innovation of the brand and the next era of driving technology,” he says. 

Bolt’s range outweighs recall 

The selection of the Chevrolet Bolt as mass market leader comes three years after that model won ALG’s residual value award for EVs in the “mainstream cars” section.

In determining residual value for mass market EVs, Lyman says ALG leans heavily on their driving range. They estimate that EV range of about 480 kilometres (300 miles) is the equivalent of a gas-powered vehicle with a full tank of gas and suggest it should be the barometer for EV manufacturers to hit in the future. 

“The Bolt was one of the first mass market vehicles that was able to get close to that range,” Lyman says. 

In companion research done by J.D. Power, Lyman adds, the three factors keeping people from buying EVs are infrastructure, cost, and range. While a consumer’s financial status could impact their ability to charge at home and purchase an EV, range was the one factor unsolvable by money. 

“You couldn’t buy more range or buy more charging stations in the real world. So, [the] Bolt’s ability to solve that problem catapulted them from our perspective,” Lyman says. 

The Bolt’s selection also comes despite a massive recall to replace defective lithium-ion battery modules due to fire risk. The recall began over a year ago for 2017 to 2019 models, but by late 2021 had been extended to all Bolt EVs and EUVs through to the 2022 model year. Production of the Bolt has been halted until at least the end of February.

Lyman says his team’s research on recalls shows that consumer sentiment is influenced more by the automaker’s response in the event of a recall than the recall itself. But he adds that since the Bolt is a vehicle with emerging technology, there might be pause for consumers looking to purchase the vehicle. 

“All that has gone into our calculation, forecast and methodology,” says Lyman, “and the Bolt still comes out on top.” 

Where’s the used EV market going? 

Lyman believes EVs are holding their residual value more now than in years past. In the industry, the degree to which a car holds its value is called a “retention rate.” Lyman says he’s seeing it grow in EVs, with current used EV buyers willing to pay more. 

He says this trend really started with the release of the first Bolt and second-generation Nissan Leaf in 2017. Here, again, he connects greater vehicle range with increased retention. 

Still, he says, we’re unlikely to see EVs matching ICE vehicles for retention rates until there is significant price parity between the two when they are new.

“Because the upfront price of EVs is still higher than gasoline vehicles, we’re seeing that as a percent, retention rate of original MSRP, it isn’t there,” Lyman says. 

“Even today, if you look at a Bolt, or a Taycan versus a 911 and a Honda Civic, the percent retention of its original MSRP is going to be lower, but that’s because of the higher upfront cost.”

There are wildcards that might help close the gap, however, such as rising gas prices and used EV sales incentives. Both have the potential to increase what a buyer might be willing to pay for a used EV, says Lyman.

Editor’s Note (Feb. 23): In response to reader inquiries, here is the full list of vehicle entries in the 2022 awards. Mass market: Chevrolet Bolt, Chevrolet Bolt EUV, Ford Mustang Mach-E, Hyundai Kona EV, Kia Soul EV, Mazda MX-30, Mini Cooper SE EV, Nissan LEAF, Volkswagen ID.4. Premium: Audi e-tron, Audi e-tron GT, Jaguar iPace, Polestar 2, Porsche Taycan, Volvo C40 EV, Volvo XC40 EV.

According to ALG, it requires new standalone automakers to achieve sales in Canada of 20,000 units annually for three years before they can be included in its “generic” forecast and eligible for these awards. This means a company like Tesla, with a sales trend that will enable it to hit the three-year target in calendar 2022, would be added to the forecast in 2023.

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