Why Electric Vehicle Prices are Dropping in the Used Car Market

Hey folks! Have you heard the news? The prices of used electric vehicles (EVs) are dropping like crazy! According to New AutoMotive, the median price of used EVs has plummeted by a whopping £10,000 in the past six months. And guess what? Used hybrid vehicles have also seen a dramatic decline of £9,000. It’s like a sale on wheels!

So, what’s causing this price drop? Well, it turns out that the influx of company-owned electric cars into the second-hand market is the main culprit. With around 475,000 electric cars and 200,000 plug-in hybrids in fleets, most of which will be sold after 2-4 years, the supply of used EVs is increasing. And you know what happens when supply goes up? Prices go down!

The CEO of New AutoMotive, Ben Nelmes, explains that this trend is a result of the government’s strategy to encourage companies to adopt electric vehicles. Since 2020, when the tax rate on company-purchased EVs dropped to 0%, more and more corporate electric cars have hit the roads. Now, as these company-owned cars enter the used car market, motorists are reaping the rewards of the government’s plan.

But wait, there’s more! This price drop is just the beginning. As more second-hand electric vehicles flood the market, prices are expected to decline even further. This not only benefits consumers by making EVs more affordable, but it also accelerates the UK’s transition to electric transportation. It’s a win-win!

Now, let’s talk numbers. The latest data from Cap HPI reveals that EVs have been the best-performing fuel type in terms of value movements for the past two months. In October alone, the average price of EVs dropped by 2.4%, which is around £650. On the other hand, petrol cars saw a drop of 4.6%, diesel cars dropped by 4%, hybrids by 4.1%, and plug-in hybrids by 3.9%. Looks like EVs are leading the pack!

So, which EV models are holding their value? The Renault Zoe and Nissan Leaf are the stars of the show. These models have seen an increase of around 2% in value at three years old. It’s no surprise considering their attractive retail price points. Who doesn’t love a good deal?

But hold on a second. While the current drop in EV prices is great news for buyers, the Cox Automotive Insight Report 2023/24 raises some concerns. The report suggests that the current low prices of used cars may not be sustainable in the long term. However, there is hope on the horizon. As battery technology improves and EVs become more affordable and offer greater range, the values of EVs are expected to stabilize.

So, what does this mean for the future of the EV market? Well, it’s a bit uncertain. The wholesale market is seeing a growing number of EVs, and as battery technology advances, we can expect some fluctuations in EV values. But don’t worry, the leasing companies have got it covered. They are already planning for the future and taking steps to protect against depreciation.

In conclusion, the drop in prices of used electric vehicles is a result of the increasing supply of company-owned EVs entering the second-hand market. This trend is a direct outcome of the government’s strategy to promote electric vehicle adoption. As more second-hand EVs become available, prices are expected to continue declining, making electric transportation more accessible to everyone. So, if you’ve been thinking about getting an EV, now might be the perfect time to make the switch!