New cars are ‘overtaking themselves’ left and right. For example, it only took a year for the Volvo EX90 and its Polestar sibling to receive a significant update. The battery packs have recently become larger, the motors more powerful, and charging can be done faster. This increasingly rapid renewal seems to be a trend in the automotive world, but what do these updates mean for early adopters?
The Volvo and Polestar are certainly not the only ones receiving updates relatively shortly after their introduction. Stellantis did something similar with the Opel Corsa Electric and Peugeot e-208. A year and a half after the facelifted version hit the road, the electric Corsa received new batteries. As a result, the Opel can travel further on a single charge. The energy consumption is also slightly lower due to the new battery pack. The e-208 underwent a similar change: the range increased by 24 kilometers according to the WLTP cycle. This upgrade was also implemented in other Stellantis vehicles with the same powertrain.
It’s no different at Volkswagen, for example with the ID3. The Wolfsburg model was facelifted in March 2023. Less than a year later, it was time for a renewed version. The ID3 Pro S has become 30 hp stronger since the most recent refresh, but there were also changes applicable to all ID3s. For instance, the hardware and software of the infotainment system were adjusted, and Volkswagen changed some sliders and buttons.
Hyundai also announced updates for the Ioniq 5 less than a year after its introduction. The battery pack became larger, optional digital mirrors were added, and the shock absorbers were modified.
Chinese Cars
“The rapid upgrading of cars is something we see everywhere, but particularly Chinese manufacturers have mastered it. Just look at the speed at which Volvo and Polestar products are sometimes thoroughly renewed in less than two years. These Geely brands are far from the only ones mastering this trick. Xpeng installed what they claim is a new 800v platform under the G6 and G9 shortly after their debut, and SAIC’s MG launched a completely new generation of the 4 Electric after just a few years. EVs are naturally easier to equip with a new, more powerful and efficient electric motor and new battery than Combustion cars are to receive a completely new engine.”
“What probably also plays a role is that Chinese manufacturers face fierce competition from other Chinese manufacturers in their home market. It’s the survival of the fittest. Those who have the most current car have the greatest chance of survival. In Europe, Chinese carmakers hope to rapidly gain market share, so here too, introducing a new powertrain that makes the previous version obsolete can’t hurt. Residual value is at least temporarily somewhat lower on the priority list.”
Residual Values
These rapid renewals are due to the high pace at which technological developments follow each other, according to Maarten Baljet. “There is still rapid technological progress in electric cars. Better cars are coming to market, or the technology can be offered more cheaply.” According to Baljet, it’s understandable that manufacturers quickly update their cars. “If you don’t update the car, you’ll be overtaken by the competition. It’s better to renew and come with the latest technology than to wait.”
Cars from before an update may face more depreciation, but this won’t be the same for every car. “As a consumer, you preferably want the better car, making it more difficult for sellers to sell the older version. For example, with the Volkswagen ID4, you see a clear price difference between versions before and after the technical updates from 2023.”
However, Baljet sees that for residual value, it’s mainly important that a car has a large range and can charge quickly. “In that regard, the first EX90 and Polestar 3 are quite capable, so the additional depreciation won’t be dramatic.”
According to Baljet, it’s ‘worth considering’ for car buyers to postpone purchase until the first update. However, it’s not possible for everyone to wait. It’s also always uncertain whether an update is even on the horizon.