After recently hearing from some Nissan LEAF owners who were disappointed in trade-in offers they had received for their cars, I decided to look into Kelley Blue Book’s valuations of used LEAFs. What I found was more or less in line with the offers I had heard about:

2011 LEAF (Very Good Condition)
MSRP $27,700 after rebate

..............................Trade-in Value
3,000 mi............... $19,100 (71% of MSRP)
10,000 mi............. $18,650 (67%)
20,000 mi............. $15,100 (54%)
60,000 mi............. $18,200 (64%)
80,000 mi............. $13,200 (47%)
100,000 mi........... $11,350 (40%)

*figures rounded to nearest $50.

How do these values hold up to those of other vehicles? To get a rough idea, I selected two similarly priced sedans from the 2011 model year:

2011 Prius 4 (Very Good Condition)
MSRP $28,250

..............................Trade-in Value
3,000 mi............... $23,450 (83% of MSRP)
10,000 mi............. $22,550 (79%)
20,000 mi............. $21,700 (77%)
60,000 mi............. $18,200 (64%)
80,000 mi............. $15,900 (56%)
100,000 mi........... $13,700 (48%)

2011 Audi A3 (Very Good Condition)
MSRP $28,750

..............................Trade-in Value
3,000 mi............... $22,250 (77% of MSRP)
10,000 mi............. $21,750 (75%)
20,000 mi............. $20,950 (72%)
60,000 mi............. $17,600 (61%)
80,000 mi............. $17,100 (59%)
100,000 mi........... $13,300 (46%)

My less-than-scientific analysis seemed to confirm the anecdotal accounts I had received over the last few weeks—as did a USA Today article that happened to go live as I was doing my research. The article reported that Kelley Blue Book projects the 2012 LEAF to retain 20 percent of its value after 5 years, contrasting it with the 2012 Nissan Sentra, which is projected to retain slightly more than 30 percent of its value over the same period.

Just how damning are these numbers for the LEAF? At face value one might conclude that Kelley Blue Book’s projections put a significant drag on the economic argument for driving electric. But as KBB’s director of residual value consulting, Eric Ibara, reminded USA Today in the article, these numbers don’t tell the whole story. "If you only look at residual percentages, it's on the low side," said Ibara. "But if you look at dollars," how much people actually spend to keep an electric car compared with a conventional one, "it's not."

What Ibara was alluding to is that projected fuel and maintenance savings for the LEAF and other EVs are likely to bridge the gap in resale value for most owners. But what creates that gap to begin with?

To find out, I asked Alan Baum, a Michigan-based automotive analyst who head Baum and Associates. Baum blamed low residual values for the 2011 and 2012 LEAF on the forthcoming 2013 model of the car, which is said to be both cheaper and more efficient than previous models.

“The new version of the LEAF has improved capability, making these prior versions less attractive,” he said. “I think resale values will improve as volumes increase and the segment is better understood.”

Still A Guessing Game

No matter how fine the work companies like KBB have put into predicting the LEAF’s resale value, there aren’t actually any LEAFs out there on the used auto market with 100,000 miles on them just yet. It remains to be seen just how popular early versions of the LEAF will prove to be down the road. Several questions remain unanswered for current LEAF drivers who will one day look to trade or sell their cars with higher mileages on them.

What effect will normal battery deterioration have on values? How much more is a 5-year old LEAF still capable of 65 miles of range worth in comparison to one that is down to 55 miles? How will the LEAF battery pack fare beyond the 100,000-mile mark, and will there be added demand for cheaper, used EVs with significantly limited range from drivers who don’t actually need or want to pay for a car with battery pack capable of 80 miles of range?

Back when hybrids were new to the market, a myth began to circulate that they would lose most of their value once their batteries were worn down—forcing their owners to shell out big bucks for replacement nickel-metal packs. As we can see from the Prius 4’s value retention numbers, those warnings turned out to be a whole lot of hogwash. A few years from now we’ll have a better idea of just how resilient EVs prove to those fears.