- Lower demand for new EVs, battery degradation and price war among brands may have made second-hand EVs far more affordable than ever before.
Electric vehicles (EVs) are poised to take over global roads in a matter of a few years. And while the rate of rise in sales of EVs has stuttered in recent months, it is widely believed that battery-powered mobility options entirely replacing vehicles powered by combustion engines is inevitable. But what about the fate of pre-owned EVs?
The second-hand vehicles’ market in many parts of the world saw a meteoric increase in traction since Covid times, mostly due to the need of personal mobility options that are comparatively more affordable than brand new products. But there is a sense of concern when it comes to EVs because battery degradation is a very real issue. Interestingly though, a study by iSeeCars – an online automotive search engine portal in the US, has found that even at present, pre-owned EVs are cheaper to purchase than pre-owned vehicles powered by petrol or diesel.
According to the study, the price difference between pre-owned EVs and pre-owned conventional vehicles increased to around 8.5 per cent in the US in the month of May. The average price for a second-hand EV in May was found to be around $28,700 while that of a pre-owned petrol or diesel model was at $31,500. The study further notes that this price difference in favour of EVs is even more significant when compared to June of last year when the price difference favoured pre-owned petrol/diesel models by around 25 per cent. This means purchasing a second-hand petrol/diesel car in the US was – on an average – 25 per cent cheaper than buying a second-hand EV.
Why are second-hand EV prices dropping?
The study conducted by iSeeCars assessed prices of around 2.2 million vehicles that were anywhere between one and five years old. It observed that while average prices of pre-owned petrol/diesel models have remained steady over the course of past several months, prices of second-hand EVs have tumbled. There are several factors at play here.
Slowing demand for new EVs is a very real concern for manufacturers and dealers. Then there is a price war between several major EV manufacturers which has brought down prices of new EVs, impacting sticker prices of pre-owned models as well. And perhaps the most important factor could be that EVs generally have a poor resale value which means sellers are more willing to lower prices of the EVs on sale.
First Published Date: 12 Jun 2024, 20:02 PM IST