Sinking Used EV Prices, Rising Supply Sparking Sales, Hope For Priced-Out Consumers

One of the biggest barriers to buying an electric vehicle for cash-strapped consumers is price, but that’s breaking down and boosted sales are following.

The bargains are not on new units, but rather on used EVs as supply of pre-owned electric vehicles increases, according to research from several different sources.

Last quarter, the average retail listing price for a used EV was around $43,400, a decrease of approximately 4% from Q1 2022— well below the average new EV price, which is closer to $59,000, according to Cox Automotive in a report released Friday.

That’s similar to numbers from at least three online vehicle research and buying sites.

“We’ve seen pricing on used EVs has dropped fairly substantially from 2022 to 2023,” said Jane Ulitskaya, editor at Cars.com. “So as of February the average price for a used EV fell from $53,000 to $48,000. That’s as of February. At the same time, the price of a new electric car has actually jumped quite a bit from about $56,000 to $66,000. That’s among Cars.com dealers from February of 22 to February of 23.”

Research at CoPilot notes the drop in used EV prices goes against the current trend of rising prices for conventional vehicles, estimating used EV prices are now averaging $46,668, marking a steady decrease since July 2022 and falling another 2%, or $813 in March.

Specifically, used Teslas are listed at an average price of $49,432– down 29% since the summer, according to CoPilot. The site observes the drop in used Tesla prices “as competition saturates the market, including from Nissan and VW’s EV models.”

In a report released this week CarGurus.com’s Director of Industry Insights and Analytics Kevin Roberts wrote “Although used prices are on the rise, consumers are able to find pricing relief on select models, with EVs ranking among the top 6 models with the largest price declines. Models from Tesla, Rivian, and BMW have decreased as much as 33% since July 2022.”

Why are used EVs are swimming against the tide of otherwise rising used vehicle prices? The research points to vastly expanding demand in tune with an increase in sales of new battery electric cars and trucks.

While new EV sales now account for an historic high of 7% of the new vehicle market in the U.S. Cox Automotive estimates sales of used EVs were up 32% during the first quarter of 2023 from Q1 2022 and 120% over Q1 2021.

Then there’s the reaction to the action taken by the EV market with Cox noting, “The lower average listing price at retail is likely the result of aggressive price cuts at Tesla, the EV market share leader. As the market leader pushes down prices for new EVs, used-vehicle prices follow suit.”

Rising new EV sales have sparked more trade-ins and that’s making more used units available on wholesale used markets according to Manheim, which operates the largest wholesale vehicle marketplace in the U.S.

Last quarter wholesale EV transactions in Mannheim were almost 9,800 units and represents about 1% of all units sold in Mannheim during that period, representing growth of 40% against Q1 2022 and 82% growth versus Q1 2021, the company said.

The combination of greater supply and lower prices is giving consumers who want to switch to an electric vehicle but can’t swing the price of a new one, new hope.

“New EVs are priced substantially higher, so I think people are looking for an alternative to that higher price tag of a new EV and so they’re turning towards us seeing what’s out there,” observed Cars.com’s Jane Ulitskaya. “Another one is the change in the EV tax credit guidelines, which now make used electric vehicles also eligible for a credit.”

It’s just another wrinkle in an auto market that’s been in state of radical change since the onset of the Covid-19 pandemic in March, 2020, where the worst of times can run parallel to the best of times.

As the research at CoPilot notes, “used car prices are up $844 in the last month alone– now averaging $31,492. It’s now one of the worst times in history to buy a used car.”

Except if that used car is powered by a battery and not petroleum.