In our first article, we identified a fundamental problem in modern zero-emission transport: for electric vehicles, age and mileage have ceased to be reliable measures of value. If these traditional indicators no longer work, what underpins today’s used-EV market? Unfortunately, to a large extent, guesswork.
And where guesswork rules, the market begins to destroy itself. To understand why a lack of knowledge about traction-battery health paralyses used-electric-car trading, we need to turn to a theory recognised with the Nobel Prize in Economics.
What is the “market for lemons”?
In 1970, the American economist George Akerlof published a groundbreaking paper entitled “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism”. Akerlof was the first to demonstrate mathematically the destructive economic impact of what is known as information asymmetry.
Information asymmetry occurs when one party to a transaction, usually the seller, knows significantly more about the item than the other party, the buyer. Akerlof used the example of the used-car market, dividing cars into two extreme types:
The destructive mechanism works as follows: Imagine a market with 100 cars. Half are well-maintained “peaches” worth PLN 100 000, and half are “lemons” worth PLN 50 000. They all look identical from the outside. Because the buyer cannot tell them apart and fears a loss, they will not risk paying the full PLN 100 000. Instead, they calculate the risk and offer an average price they consider safe: PLN 75 000.
What happens on the sellers’ side? The owner of a “lemon” is happy to sell a defective car for PLN 75 000. But the owner of a “peach”, knowing how good their car is, will not sell it at a loss. They therefore withdraw the vehicle from the market.
As a result, only “lemons” remain on the market. Buyers soon notice, their trust falls to zero and the prices offered fall further. The market collapses completely. In economics, this phenomenon is called adverse selection.
Why are electric vehicles the perfect environment for “lemons”?
Although Akerlof’s theory is more than half a century old, it has never been more relevant than today, in the era of the energy transition. The electric vehicle (EV) is the most extreme case of information asymmetry in automotive history.
The traction battery accounts for 40% to as much as 50% of a new vehicle’s total value. At the same time, it remains a complete “black box” for the average buyer, dealer or valuer.
Imagine two identical fleet cars from 2023, both with 90 000 km on the clock:
Vehicle A: Driven smoothly in the city, charged mainly with alternating current (AC) within a 20–80% SoC window, with careful thermal management. Cell degradation is minimal.
Vehicle B: A heavily used car, repeatedly discharged almost to zero and connected to ultra-fast DC chargers every day in freezing conditions. Cell degradation is substantial.
To the buyer — whether a private individual or a professional fleet-management company — these vehicles look like twins. Without access to raw BMS (Battery Management System) data, the car with a severely degraded battery becomes a market “lemon” that brutally depresses the valuation of the well-maintained vehicle. This enormous uncertainty leaves the entire B2B sector — banks, insurers and leasing companies — struggling to determine Residual Value (RV). Higher risk for the bank always means one thing: a higher lease payment for the end customer.
How does the BHV engine reverse this trend?
At Voltified Energy, we know that the only remedy for information asymmetry is hard, indisputable evidence. That is why we are building the Voltified Fleet Intelligence platform, powered by our proprietary BHV (Battery Health Value).
Our goal is not to create another fault-code reader. We are designing a system that connects the complex world of battery engineering with finance.
Through close integration with independent technical diagnostics — audits assessing among other things cell voltages, internal resistance and charging cycles — our BHV algorithm aggregates these parameters and converts them in real time into a reliable, market-based financial indicator.
What do we gain by eliminating information asymmetry? Instead of guessing, market participants can rely on a certified asset value:
For financial institutions and fleets (B2B2B): Hard evidence of value enables precise credit-risk assessment and TCO (Total Cost of Ownership) optimisation. Fleet management becomes fully predictable.
For sellers (closing the valuation gap): The owner of a well-maintained car proves its condition. They receive a BHV certificate that becomes an indisputable argument for a higher selling price.
For buyers (B2C protection): Eliminating the risk of buying a completely degraded battery. An informed, safe purchase removes the psychological barrier and builds trust in EV technology.
For the circular economy: Cars with batteries no longer suitable for transport cease to be worthless “lemons”. Through BHV analytics, their cells become a valuable resource, gaining a second life in stationary energy-storage systems.
Summary
The “market for lemons” in electric mobility is a systemic fault that severely slows the transport transition. As long as a vehicle’s most expensive component remains a mystery, used-car trading will resemble a lottery, and leasing costs will be artificially inflated by the risk premium.
The Voltified Energy project aims to switch on the proverbial light. We believe objective valuation powered by our BHV engine will restore economic logic to the automotive industry. We want transactions to be based once again on mathematics and trust, rather than fear.
