According to recent United Kingdom data, the value of used electric automobiles has decreased by one-third on average over the last six months, as opposed to 0.5% for gasoline cars. What could be the reason behind this drop?
Research conducted by Car Dealer’s magazine revealed that in the last six months, 29 of the top 30 used vehicles with remarkable depreciation are electric. Furthermore, the magnitude of the average decline is particularly astonishing. The auction prices of electric vehicles have plummeted by a staggering 33.6% since last December, while those of diesel and gasoline vehicles only decreased by 1.3% and 0.5%, respectively.
Since high-end electric automobiles are so expensive, this might result in a huge loss. For instance, both Tesla’s Model X and Porsche Taycan decreased by more than £20,000 ($24,932) each.
Electric car resale values are falling as a result of a combination of variables. To start with, EVs have further to drop compared to their counterparts that use fossil fuel, because the premiums for electric vehicles are frequently about £10,000 ($12,466) higher than those for gasoline or diesel vehicles, and thus the pace of fall may appear to be higher.
The second issue has to do with demand and supply. In the last two-year period, electric vehicle demand has significantly outpaced supply, creating lengthy queues for individuals looking to transition from gasoline or diesel to more ecologically friendly models.
The situation has now changed. Today, there are plenty of new vehicles available for drivers to use, primarily due to EV factories ramping up. Although shoppers might have opted for a used car in the past due to a lack of new vehicle purchase, they are no longer required to make that choice.
Needless to say, battery technology is advancing constantly, leading purchasers to wonder if buying an electric model that is old isn’t a waste of money given that new models can travel farther on just one charge.
The discontinuation of several UK government subsidy programs, such as the Plug-In Car Grant, might have led to many shoppers losing interest in electric vehicles. The high-profile price drops from Tesla Inc. (NASDAQ: TSLA) have also had a negative impact on the secondhand market since a drop in price of new Teslas inevitably means that the price of used EVs has to drop relative to new ones.
Given all of the aforementioned factors, it is possible to see why the electric vehicle resale value has decreased so drastically over the last six months.
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