Used Electric Vehicle Prices Continue Slumping

Secondhand electric vehicle prices have maintained their downward trend several weeks after they first fell; they are now costing customers several thousand dollars less compared to similar vehicles with internal combustion engines. For drivers who were interested in switching to battery electric vehicles (BEVs) but were held back by prices, this represents the best time to finally ditch their fossil-fuel powered vehicles and replace them with BEVs.

A recent analysis published by iSeeCars has revealed that with the price difference between the BMW 3 Series and a secondhand Tesla Model 3 shrinking rapidly, the premium that has been associated with electric cars for the past decade has been all but erased. A small percentage of customers, particularly the early adopter market, were more than willing to pay this premium when electric vehicles first launched, but top EV makers such as Tesla are now struggling to attract customers who can shell out tens of thousands to own an electric car.

Consequently, the recent fall in used electric vehicle prices has significantly increased the potential for first time electric vehicle owners across several major markets. The fall in battery electric vehicle prices began in February when used EVs  became cheaper than used ICE cars for the first time since electric cars hit the mass market. As Tesla and other top electric vehicle makers cut new electric vehicle prices amid an intense price discount war, used electric vehicle prices declined dramatically.

Compared to last June when the average used electric vehicle cost 25% more than secondhand gas-powered cars, used EVs were 8% cheaper than comparable fossil fuel-powered cars by May 2024. While used petrol and diesel car prices have fallen by around 3%–7% over the last 12 months, used EV prices have declined by a whopping 30%–39%.  The gap between used electric vehicle and gas-powered vehicle prices has also extended to luxury brands, with secondhand BMW prices surpassing prices for comparable battery electric vehicles from Tesla by a “significant amount.”

iSeeCars executive analyst Karl Brauer noted in a recent iSeeCars report that secondhand vehicle shoppers have made it clear that they aren’t willing to pay premium prices for battery EVs anymore. The use of electricity is now a “detractor” rather than an attraction for many consumers, Brauer said, making battery electric cars less valuable and desirable to secondhand vehicle customers.

Despite the continuing fall in used-EV prices, a growing number of electric vehicle drivers are selling their used electric cars due to the growing market. The secondhand EV market currently has more electric cars than the new EV market, meaning significantly more drivers can now purchase an EV without having to break the bank.

As more innovation is implemented within the EV space, the new models from enterprises such as Workhorse Group Inc. (NASDAQ: WKHS) are bound to become more affordable, further driving down the prices in the used electric vehicle market.

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