The demand for used electric vehicles (EVs) in the UK is increasing, and second-hand EV prices are becoming more competitive, according to data from Auto Trader. The availability of EVs has doubled from May 2022 to May 2023, with the advertised price dropping by almost 19% year-on-year. Auto Trader’s data science team monitors close to 800,000 cars daily to identify patterns in the market.
While EVs have been available second-hand since 2011, the product offerings have significantly improved since then. The price, specifications, and range of modern EVs started to take shape around 2020, with an explosion of brands and models entering the market. This increased competition, particularly from Chinese brands like BYD, has led to price cuts and package optimizations from market leader Tesla. Other European brands have also offered purchasing incentives worth up to £10,000.
The drop in average EV prices has narrowed the upfront price gap between electric and traditional internal combustion engine (ICE) cars, making EVs more affordable in some cases. For example, a three-year-old electric Jaguar I-PACE is now £600 cheaper than its traditionally fueled counterpart, the F-PACE. Used Teslas have seen the most significant price reductions, with the average price of a three-year-old Model 3 now just £3,600 more expensive than a BMW 3 Series of the same age, compared to a £22,000 gap in August.
Auto Trader currently has around 15,000 second-hand EVs for sale, with 29% priced under £20,000. The number of searches for EVs has also increased from 4% to nearly 8% in one year. Richard Walker, Auto Trader’s Director of Data and Insight, predicts that there will be close to 1 million EVs on UK roads by the end of the year.
However, the average time it takes for used EVs to sell is still longer compared to petrol and diesel cars. In May, the average EV took 42 days to sell, down from a peak of 47 days in January. Petrol and diesel cars, on the other hand, took an average of just 27 days to sell. Used Teslas had the fastest selling time, with an average of 22 days.
Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), highlighted the stabilizing retail prices of used EVs and emphasized the importance of dealers in providing information and debunking misconceptions about EVs. As more affordable EVs enter the market and consumer interest grows, the need for an increase in public charge points and a decrease in the price per kWh of electricity is becoming more apparent.
In conclusion, the demand for used EVs is on the rise in the UK, leading to more competitive prices. The availability and variety of EV models have increased, narrowing the price gap between EVs and ICE cars. However, used EVs still take longer to sell compared to traditional cars, and improvements in charging infrastructure and electricity pricing are needed to support the growing demand for electric mobility.
Prices Continue to Adjust, Fueling the Growth of the Used EV Market
Electric vehicles (EVs) have been rapidly gaining popularity in recent years, driven by a collective need to tackle climate change and reduce dependency on fossil fuels. However, the initial high cost of EVs often deterred many potential buyers from making the switch. Nevertheless, an increasingly thriving used EV market has emerged, offering a more affordable and sustainable alternative for interested consumers. This growth is primarily fueled by the continually adjusting prices of EVs, making them more accessible to a larger demographic.
One of the primary factors contributing to the expansion of the used EV market is the declining prices of new electric vehicles. With advancements in technology and economies of scale, manufacturers have been able to produce EVs at a lower cost, which has subsequently led to reductions in their retail prices. As a result, we are witnessing a trickle-down effect on the used EV market, where older models become more affordable to prospective buyers.
Another significant factor driving the growth of the used EV market is the improvement in battery technology. Batteries are one of the most expensive components of an electric vehicle, and their degradation over time decreases the vehicle’s range and performance, reducing its value. However, recent advancements in battery technology, such as improved longevity and reduced capacity degradation, have significantly increased the lifespan and value of used EVs. As a result, consumers are more confident in purchasing used EVs, knowing they will still provide long-term value and a satisfactory driving experience.
In addition to technological advancements, various incentives and subsidies provided by governments and organizations worldwide have also played a crucial role in boosting the used EV market. Many countries offer financial incentives to individuals who choose to purchase an EV, either new or used. These incentives can include tax credits, grants, or exemptions from certain charges like congestion fees or tolls. Such incentives not only motivate consumers to consider an EV but also make used electric cars even more attractive due to their lower initial purchase price. Consequently, this has led to an increase in demand and a subsequent growth in the used EV market.
Furthermore, the growing infrastructure supporting EVs, such as charging stations and battery swapping systems, has alleviated range anxiety and increased consumer confidence in electric vehicles. As the charging infrastructure continues to expand, consumers are becoming less concerned about EVs’ limited range and are more willing to purchase used electric cars. This factor, combined with the aforementioned benefits, provides additional support for the growth of the used EV market.
The growth of the used EV market brings numerous benefits to both consumers and the environment. Buyers are now able to access a wider selection of affordable and sustainable transportation options, contributing to reduced greenhouse gas emissions and promoting sustainable mobility. Additionally, the increasing demand for used EVs stimulates market competition, leading to further improvements in technology, and ultimately accelerating the transition to a greener transportation system.
In conclusion, the growth of the used EV market can be attributed to the continually adjusting prices of new electric vehicles, advancements in battery technology, government incentives, and the expanding infrastructure supporting EVs. These factors have collectively made electric cars more affordable and desirable to consumers, resulting in increased demand and further development of the used EV market. As the world endeavors to combat climate change, the growth of the used EV market presents a significant step towards a more sustainable and cleaner future.