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Why are used electric vehicle prices dropping?

By Jake Beardslee · February 12, 2024

Declining Used EV Prices

Used electric vehicle prices have been falling sharply in recent months according to KTLA technology reporter Rich DeMuro. In 2023, the top 10 best-selling EVs in the US saw an average price drop of 28% from the previous year. DeMuro notes that just a year ago, some used EVs were selling for close to or even above new prices.  Steve Jurvetson/Wikimedia

Good News for Buyers, Bad Signs for the Industry

On the surface, lower used EV prices seem beneficial for consumers looking to purchase their first electric vehicle. However, experts warn that the steep decline points to underlying problems in the industry that cannot be easily solved.  MDGovpics/Wikimedia

Increased Competition, Shifting Incentives

Tesla is no longer the lone major EV player, with more options now available than ever before. Additionally, government subsidies favor new EV purchases over used ones.  Mliu92/Wikimedia

Battery Life Concerns

A key issue dampening used EV values is uncertainty around battery longevity. Without standardized testing and data on long-term battery performance, consumers worry that a used EV's battery may be degraded in unclear ways.  Mariordo/Wikimedia

Inevitable Range Reduction

According to experts, while battery chemistry advances can extend lifespan, it is certain that battery capacity and thus electric vehicle range will diminish over time through natural degradation. Accounting for this loss of range is important when considering a used EV.  Chad Davis from Minneapolis, United States/Wikimedia

Rental Giant Hits Pause on EVs

In January, Hertz announced plans to sell over 20,000 Teslas from its rental fleet and pause further EV acquisitions, citing expenses and weak secondary market demand. The move highlighted struggles in the burgeoning used EV sector.  Dwight Burdette/Wikimedia

Continued Growth Despite Challenges

While short-term hurdles exist, electric vehicle adoption in the US continues growing annually and California‚Äôs timeline to require all new vehicle sales be EVs or plug-in hybrids by 2035 will further propel the transition.  Jamie Hamel Smith/Wikimedia