Secondhand electric vehicle (EV) prices have continued their decline, showing a sustained downward trend weeks after the initial drop. Now, these vehicles are significantly more affordable, costing customers several thousand dollars less compared to equivalent internal combustion engine (ICE) cars. This presents an opportune moment for those who have considered transitioning to battery electric vehicles (BEVs) but were previously deterred by high costs, to switch from their fossil-fuel-powered vehicles to BEVs.
A recent iSeeCars analysis highlights that the price gap between a BMW 3 Series and a used Tesla Model 3 is narrowing rapidly, virtually eliminating the premium historically associated with electric cars. Initially, a small segment of early adopters willingly paid this premium, but now leading EV manufacturers like Tesla face challenges attracting buyers who can afford the high cost of an electric car.
As a result, the recent drop in used EV prices has greatly expanded the potential for first-time electric vehicle owners across various major markets. This price reduction began in February when used EVs became cheaper than used ICE cars for the first time since electric vehicles entered the mass market. As companies like Tesla and other top electric vehicle makers reduce the prices of new electric cars in response to a fierce price discount war, used EV prices have plummeted.
Compared to June of last year, when the average used electric vehicle was 25% more expensive than its gas-powered counterpart, by May 2024, used EVs were 8% cheaper than comparable fossil fuel-powered cars. Over the past year, used petrol and diesel car prices have fallen by about 3% to 7%, while used EV prices have dropped dramatically by 30% to 39%. This price gap extends to luxury brands as well, with secondhand BMWs now costing significantly more than comparable battery electric vehicles from Tesla.
Karl Brauer, an executive analyst at iSeeCars, noted in a recent report that secondhand vehicle buyers are no longer willing to pay a premium for battery electric vehicles. He remarked that for many consumers, the use of electricity is now a “detractor” rather than a selling point, making battery electric cars less appealing and less valuable in the secondhand market.
Despite the continued decline in used EV prices, the growing market is prompting more electric vehicle owners to sell their used cars. The secondhand EV market now has more available electric cars than the new EV market, enabling a greater number of drivers to purchase an EV without a substantial financial burden.
With ongoing advancements in the EV sector, new models from companies like Workhorse Group Inc. (NASDAQ: WKHS) are expected to become more affordable, further driving down prices in the used electric vehicle market.
Source: IBN
