Used EV Sales Continue to Rise: Is the Predicted Rush On?
Unsurprisingly, new electric vehicle sales were down nearly 22 percent in May compared to last year, but used EVs were on the move, sales rising 24.7 percent on a year-over-year basis.
With gas prices high, and expected to remain so for several months even after the latest peace accord with Iran, used EVs have become popular because of their affordability both by avoiding the gas pump as well as their sticker price.
Tesla is the leaders with over 15,300 vehicles sold, which was down slightly compared to last month. Used Hyundai, Chevrolet, Ford, and BMW EVs followed Tesla. Sales weren’t just up over last year’s numbers, but over last month as well by 5.5 percent.
“Month-over-month gains were broad-based, with many brands proving popular, led by strong growth among Hyundai, BMW, Volkswagen, and Cadillac,” noted Stephanie Valdez Streaty, Cox’s director of industry insights. “The consistent year-over-year growth underscores continued expansion of the used EV business as off-lease returns and trade-ins build inventory depth across more brands and price points.”
While the average price of gas has been over $4 a gallon for much of the year, the new deal with Iran could see that price drop below that number in the new week or so. Oil prices dipped significantly in the days after the deal was announced. Gas prices haven’t dropped as much because the oil supply is still months away from reaching refineries.
The average price for a used EV last month rose 3.8 percent from April to $37,083. That jump was across the board. By comparison, new EV prices averaged $54,532.
Prices on used EVs are expected to rise, in part, because the supply is dropping. It fell 7.5 percent in May to a 31-day supply. That is well below new EV and internal combusition engine-powered vehicle supplies across the U.S. currently, Cox noted.
Days’ supply tightened broadly among high-volume brands, led by Volkswagen and Honda. Tesla, Toyota, and Hyundai availability also remained relatively lean, reinforcing strong turnover across the used EV segment, Cox wrote in its analysis. Despite this, there expected to be an influx of off-lease EVs coming into the market for the next several months, helping to off-set price increases.
[Images: Tesla, Chevrolet, AAA]
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Michael Strong has spent more than 25 years writing about the automotive industry. A Detroit-area native, he’s written about everything from local car shows to product reviews to financial news. Currently he writes and edits for a variety of national and local publications. He’s also a longtime member of the Automotive Press Association and the International Motor Press Association, and a graduate of Georgia Southern University. Hail Southern! Despite a love for ’70s land yachts and BMWs from the late ’80s and early ’90s, his personal vehicle is neither of those.
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All new cars depreciate rapidly but EV depreciation is not just from the anti-EV bias of the Administration but also due to the rapidly improving technology of EV batteries. The cost per kilowatt has dropped from over $1000/kWh 15 years ago to $100 today. The loss of subsidies created a short term shock for OEMs and buyers. It was predictable as it happened in other countries. EVs are in a similar market situation as cell phones. Each year better tech gives buyers more phone for their money which lowers the cost of used phones. Internal combustion technology has little room for improvement but batteries will be improving energy density, charging speed, and cost/kWh for years and years.
Another factor not mention is EV hesitancy among buyers. Instead of spending big $$$ on a new EV as the primary family car , step in a used one at a steep discount as the second car, dip your toes into the EV waters, see how it feels. It just might convince you to go full on EV for all the family cars.