Electric cars set to hold high resale value - in Europe, at least

Imagine this: a world where your petrol or diesel car has been banned. You can't drive it to the shops any more. It's basically a worthless one-and-a-half-tonne paperweight.

That's a future that is coming to cities in Europe, where municipalities are outlawing conventional vehicles in city centres to help make for a cleaner air environment. And it's coming soon: Oslo, Madrid, Copenhagen, Paris, Athens, Helsinki all are looking to ban diesel-powered cars within the next decade or so. Some are looking at petrol vehicles, too.

What it means for consumers is that their current or near-future vehicle purchase, should it be fitted with a non-electrified powertrain, could be less popular on the secondhand car market.

The upside? If you've already bought a hybrid, plug-in hybrid vehicle (PHEV) or battery electric vehicle (BEV), you could get more money for it when it's time to upgrade.

"If you think that cities will not authorise cars that aren't electrified, you see the interest in electric or electrified cars will increase," said Laurent Blanchard, future product specialist for Peugeot.

The future is coming soon, it may not be long before cars with conventional combustion engines are banned from cities.

"Because if you're living in a city, and you think 'okay, I cannot go with my petrol car inside the city, I can only go with an electric car', the residual value of the electric car will increase a lot, and the residual value of the petrol will decrease," he said.

Blanchard suggested that the company is working hard to ensure that there won't be too big of a bridge between a high-end diesel or petrol car and a plug-in hybrid model in terms of cost, with the total cost of ownership (TCO) matching up in some instances.

"This will make possible, probably, the same level of leasing rates. So instead of maybe 350 euros per month, I may pay 400 euros instead because the car will be more suitable.

"But we are in a transition, and there are many things that are not absolutely sure - but this is the way we want to enter into electrification."

Another transitional measure expected to be put in place by PSA Peugeot Citroen is an alternative ownership program that allows customers to subscribe and pay a fee that allows them to use an electric car during the week, while also allowing access to a petrol vehicle for longer trips.

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