Much like my heart rate during last night’s Super Bowl, used electric vehicle prices are all over the place, and it doesn’t look like that will change anytime soon. Analysts tell Automotive News that used EV prices will continue to fluctuate, and it’s up to automakers to launch affordable EVs before the current ones hit the used market.
Used EVs have always been a bit more expensive than their internal combustion-powered counterparts across pretty much all vehicle segments. The average cost of a premium used EV was $43,706 in 2023 – over $3,200 more expensive than a comparable gas vehicle, according to AutoNews. However, used EV prices fell 30 percent on average last year, and a lot of that was apparently due to price adjustments for new EVs. Analysts suggest that as new EV prices and government incentives become available, the price of used EVs will continue to drop really quickly.
Bear in mind, used EVs only make up a tiny percentage of the overall used car market. Franchise dealerships sold just 180,000 used EVs in 2023 – accounting for less than one percent of the total used-vehicle retail market, Cox Automotive told AutoNews.
Here’s some more information on why used EV prices have been so volatile, from Automotive News:
New EV prices, which fluctuated significantly last year, quickly impact used EV prices. Tesla drove the trend, slashing prices to bring models more in line with comparable ICE vehicles. Sudden price cuts can be costly for dealers trading in the used EV market, said Rob Smith, president of Fitzgerald Auto Malls in Rockville, Md., which sells new vehicles from more than a dozen brands.
”We would take a trade that was a Tesla, for example, because they might trade it on a Genesis or some of our other high-end cars,” Smith said. “The market would change overnight because that company would just change the price. So, it makes it really difficult to offer those for sale.”
Bowman Chevrolet decided to embrace that risk, but it is doing so strategically. The Clarkston, Mich., dealership is a high-volume retailer of Chevy and had as many as six used EVs on the lot early this year.
Higher-priced used EVs come with higher risk, said Joe Jackson, general sales manager, but the store has improved its valuation of used Chevy Bolt EVs, which sell at a lower price point compared with other electric options.
”Bolts are pretty similar to ICE cars for us because we do see them more often and we are more familiar with them,” he said.
But in other cases, pricing used EVs is more challenging, he said. “We are looking at tiny markets. We are appraising this Rivian, and there are only five for sale in the Midwest that are like it.”
Something else at play here is the fact the industry isn’t really sure how to measure an EV’s battery health, and depending on the vehicle, a new EV battery can cost between $4,000 and $20,000 according to AutoNews.
So, what have we learned here? Well, used car dealers still aren’t really sure how to price the EVs they have, and that issue is being compounded by the fact automakers aren’t really too sure either. Nobody knows anything.