The typical value of used electrical autos has dramatically declined over the previous 12 months, reaching its lowest level in Might 2024 as a result of a mixture of a number of market forces.
Traditionally, the typical used EV has been far costlier than the typical used fuel automotive, however that development has swapped solely previously few months. Used EVs are actually turning into cheaper than fuel automobiles. The gulf is predicted to widen additional within the coming months.
Automotive analysis agency iSeeCars analyzed over 2.2 million one- to five-year-old used automobiles bought between Might 2023 and Might 2024. It discovered that the typical used EV value is down 29.5% year-over-year. Costs of used gas-powered automobiles have additionally dropped, however solely by a median of 6.1%.
In Might 2024, the typical late-model used EV price $28,767, 8.3% beneath the typical late-model fuel automotive at $31,424. These costs spotlight a significant shift from a 12 months in the past, when the typical used EV price $40,783 and the typical used fuel automotive price $33,469.
A number of components may very well be driving down the costs of used EVs. In the beginning of 2024, new IRS guidelines went into impact, making federal tax credit obtainable to patrons on the level of sale. As a substitute of ready until the tax season begins, patrons are actually capable of acquire tax credit score advantages proper after they stroll into dealerships for a brand new or a used EV, reducing the acquisition costs considerably.
Different components might embody elevated competitors, falling lithium costs and improved manufacturing.
“There’s no denying the crash in used EV values over the previous 12 months,” stated Karl Brauer, govt analyst at iSeeCars. “We’ve watched EV costs fall between 30-40% since June of final 12 months, whereas the typical fuel automotive’s value has dropped by simply 3-7% in that very same timeframe,” he added.
So which used EV fashions precisely are cheaper now? For starters, one- to five-year-old Tesla Mannequin 3s have been priced at a median of about $37,000 a 12 months in the past. At this time in case you’re fortunate you may snatch a used Mannequin 3 up for beneath $29,000. (Costs can range majorly relying on the age and situation of the EVs and after factoring in state and native subsidies.)
For the sake of comparability, the typical gas-powered used BMW 3 Sequence is priced at $33,245. A 12 months in the past a used Mannequin 3 price $2,635 greater than a used 3 Sequence. At this time, it’s $4,806 cheaper than the Beemer.
The gulf between premium mid-size electrical SUVs and premium mid-size fuel automobiles is getting smaller, too. A 12 months in the past, a used Tesla Mannequin Y went for $39,502 on common. That was $4,570 greater than the typical value of a used gas-powered BMW X3.
At this time, the worth distinction is barely $175. A used Mannequin Y got here in at a median value of $34,734 in Might 2024, whereas a used X3 prices about $34,559.
The highest ten automobiles within the used automotive market which have witnessed large value drops year-over-year embody the Jaguar I-Tempo, Chevrolet Bolt EV, Hyundai Kona Electrical, Kia Niro EV and Nissan Leaf.
Value parity with fuel automobiles is not an unattainable goal. Whereas used EVs price a lot much less to buy and run in comparison with used fuel automobiles, we’re seeing an identical development amongst new EVs. There’s additionally a rising crop of long-range EVs with costs nicely beneath the typical transaction value of a brand new automotive. With used and new long-range EVs cheaper than ever, we could also be getting near fixing the EV affordability downside.