Name: Why Used EV Prices Are Falling
Uploaded: 2024-03-03T05:43:32.000Z
Duration: 15 min 11 s
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Buyers can get some great deals, but some say it is yet another sign that

Low resale value could also be a major deterrent to EV purchases

Others say it is just a blip and fears of an EV slowdown are

overblown. Studies show that used EV prices fell somewhere around

30% in September and October 2023, from the same period in

2022. Used vehicle prices overall saw declines in the mid single

The mainstream appeal of these cars is still not there.

They're still too expensive and they've got too many limitations in terms of how

you use them. People are broke, interest rates are high.

The demand for EVs is not the issue, it's the affordability.

Some research indicates what many EV supporters insist: EVs are

cheaper to own than gasoline burning cars.

You don't have to shell out for gas, and maintenance costs are lower, but a

car's residual or resale value is a big factor in determining the total cost of

owning it. The volatility in the used EV market shows how much isn't yet known

about EVs, including how to predict what one will be worth in a few years

. A single change to policy, battery technology, even a single manufacturer's

These price drops come at a time when many other data points suggest EV demand

is stalling. New EVs are collecting dust on dealer lots.

Tesla, which controls nearly two thirds of the EV market, has been aggressively

cutting prices and its third quarter deliveries fell short of investor

Let me give you this general thought that I hear from everybody in this

CNBC looked at data and talked to insiders to determine whether used EV

prices are a sign of a larger slowdown in the EV market, or a bad investment

One study showed that all used vehicles up to three years old lost

4.8% in value from September 2022 to September 2023,

Another show that from October 22nd to October 23rd, the

average price for 1 to 5 year old used EVs dropped

33.7%. Meanwhile, used car prices only fell

A third showed they had fallen about 32% from September 22nd to

That study said the average EV price as of October 18th was

$27,863, roughly the same as what it was in early

2021. Some research indicates EVs have the worst depreciation

rates of any vehicle type, including, by a narrow margin, big value

Hybrids are doing extremely well in holding their value and EVs are doing

Because when you buy a hybrid, what do you get?

You get much higher fuel efficiency and a higher fuel price.

That's a powerful, desirable combination.

The trouble is not limited to the used market.

In January 2023, new car dealers had about 52 days worth of

EVs and internal combustion cars, but internal combustion

inventory held pretty steady between 52 days and 58 days throughout the year,

while EV inventory soared to 111 days in early July,

These numbers have fueled concerns that demand for EVs is waning, but not

There has been a fierce debate over what's actually happening.

There's been this wave of what I would call pretty misleading headlines over

the last few weeks, like you would think that EVs were dead and buried if

you paid attention just to what the news headlines were.

Scott Case is CEO of Recurrent, which creates vehicle history reports

specifically designed to measure EV battery life.

It also publishes the Recurrent Price Index, which tracks used EV sales.

That index is among those showing prices have fallen dramatically.

If you wanted to say what's the single biggest cause of used EV price

Tesla controls about 60% of the new EV car market, and in

2023, the company started a price war that drove a lot of

customers who would buy used EVs toward new ones, especially Teslas.

It also forced a lot of other manufacturers to lower their prices as

well, and the timing corresponds pretty tightly with the Tesla price drops.

Many of the 2022 models were current tracks depreciated 20 to 40%

Nobody's going to pay the same for a used car as they would for the new

alternative. So you saw an immediate drop in used Tesla

prices, which then was followed by a like a time delayed

drop in the used prices for Tesla competitors.

In other words, plummeting EV values don't reflect some kind of inherent

problem with EVs, just the fact that consumers who might otherwise buy used

In addition, 2023 is the three year anniversary of the Tesla Model Y,

which in the third quarter of the year was the best selling EV in the US.

Three-year-old cars are a kind of benchmark in the used market.

Leased vehicles are often held for a period of three years, and a large share

of the cars on the used market are vehicles coming off lease.

Recurrent has found that on average, new EV owners hold on to their cars

That means a lot of 2020 Model Y's are entering the used market.

2018, 2019 was just an incredible step up in new EV

And so that's what we're now seeing, kind of come on to the used market at

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Why Used EV Prices Are Falling

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