Used Electric Vehicle Prices Plummet, Led By Tesla

(RTTNews) - Used Electric Vehicle prices are experiencing a significant decline, surpassing the overall drop in the used car market, according to auto research firm iSeeCars.com.

The firm's June 2023 report reveals that used EV prices have fallen by nearly 30 percent year over year, with the rate of decline accelerating from 8.8 percent in January to 16.8 percent in March, and further to 29.5 percent in June. The analysis is based on transactions involving over 1.8 million one- to five-year-old used cars between June 2022 and 2023.

Karl Brauer, iSeeCars' executive analyst, highlighted the shift in EV supply and demand, stating that used EV prices had been rising faster than the average used car a year ago. However, the trend has now reversed, with EV prices falling at a rate approximately ten times that of the overall used car market.

The primary reason behind the significant drop in used EV prices can be attributed to Tesla's substantial price cuts earlier this year, which put substantial downward pressure on the used EV market. Since Tesla EVs, particularly the Model 3 and Model Y, dominate the used EV market, the drastic decline in Tesla's values has had a widespread impact on the entire category, according to Brauer.

Other contributing factors to the declining prices in the second-hand EV market include stabilization of fuel prices this year, which has affected demand for EVs, as well as rising interest rates. Additionally, price-conscious consumers seeking better vehicle deals regardless of powertrain have also influenced the lower prices.

Examining the specific models with the most significant price drops, iSeeCars found that six hybrid and electric vehicles made the top 10 list, with Tesla occupying three of the top five positions. The Model 3 experienced a 30.5 percent drop, followed by the Model X with a 21.3 percent drop and the Model S with a 19.0 percent drop. On the other hand, traditional gas-powered cars saw the largest overall price increases, including the Mercedes-Benz SL convertibles, Fiat 500X crossover, Chevrolet Suburban, and two Porsche sports cars—the 911 convertible and 718 Cayman coupe.

Regarding specific metropolitan markets in the US, iSeeCars' data indicated that Miami witnessed the most substantial decline in used car prices at 8.1 percent year over year in June, followed by New York, at 6.9 percent and Jacksonville, Florida at 6.8 percent. Conversely, only Dallas, Salt Lake City, and San Antonio experienced appreciation in used car prices among the 50 metro areas covered by iSeeCars.

In summary, prospective buyers of used EVs, particularly those interested in purchasing a Tesla, may find this period an opportune time due to the declining prices. The report suggests considering out-of-state purchases, with Florida and New York specifically mentioned as potentially offering better deals.