High supply and low demand for used EVs means plummeting prices
Used EV prices have fallen off a cliff, according to a new study.
Used vehicle prices in general dropped by less than 4 percent year-over-year for the third month in a row, said an iSeeCars.com survey, compared with used electric vehicle prices which have fallen by nearly 30 percent. And the drop “keeps accelerating, growing from 8.8 percent in January to 16.8 percent in March to 29.5 percent in June.”
Tesla’s Model 3 and Model X are leading the tumble in used car pricing, followed by the Nissan Leaf and Tesla Model S, the study reported.
“A year ago, used EV prices were on the upswing, rising faster than the average used car,” said iSeeCars Executive Analyst Karl Brauer. “Electric vehicle prices are now falling at nearly 10 times the rate of the average used vehicle, reflecting a clear shift in EV supply and demand.”
Competition with the used segment and other manufacturers is also dropping prices of new EV sales, as reflected by discounts required to keep the product moving, according to a Reuters story. “The U.S. EV market is growing, but not fast enough during the latest quarter to prevent unsold EVs from stacking up at some automakers’ dealerships or to allow Tesla to avoid new price cuts, according to analysts and industry data,” the story said.
Reuters cited data from Cox Automotive that suggested dealers for established automakers such as General Motors, Ford, Hyundai and Toyota have more than 90 days’ worth of unsold EVs at their stores at current sales rates, while the average for all vehicles is a 52-day supply.
Ford dealers, for example, had 86 days’ worth of F-150 Lightnings and 113 days’ worth of Mustang Mach-E electric crossovers on hand, Cox said, though Ford said the data overstates the supply. Ford cut the price of the Mach-E in May.
“Used electric vehicle prices are in a free-fall, dropping 15.7 percent since January and by an increasing amount every month so far in 2023,” said Brauer. “With Tesla cutting prices on new models, its used EV values have tumbled. And because Tesla makes up the bulk of the used EV market the dramatic drop in Tesla values has impacted the entire category.
“Used car prices are still well above pre-pandemic levels, but they’ve come off their highs from last year and should be relatively stable over the next 6 to 12 months,” said Brauer. “Shoppers in need of a used car can find deals now, particularly on used Teslas, which have lost substantial value over the past 12 months.”