As we know EV vehicle market is growing very rapidly but at the same time,the resale value of the used EVs have impacts very badly.According to the analysis, resale value of pre-owned electric cars (EVs) and plug-in hybrids (PHEVs) prices are falling faster in Australia.
The news was unveiled by Cox Automative Australia, which observed that price index for used PHEVs and EVs are falling faster nearby 25% under four years of age. This is indeed a much faster rate of decline in comparison to overall used market that is fallen about 3.5% YoY (year on year).
For instance: if we compare the last two years data, the price index of used EVs and PHEVs fell from 128.4 in June 2022 to 96.2 one year later. Whereas, the starting point or the index base line was 100 points in December 2019. This was happened just before the COVID where the used car market went out of control.
The analysis depicts that used or demo EV and PHEV sales prices were 28.4% greater in June 2022 as compared to December 2019. Whereas, it goes 3.8% lower than December 2019 prices by June 2023.
The price of used EV models was driven high by scarcity when EVs were difficult to get. This is a dynamic shifting a stage new market share is at a record of 7.4% the current year. It represents a four fold in YoY.
There are other factors also that might impact used EVs and PHEV prices which includes early adopters sentiment that leads favourably towards new products, a spate of cheaper options arriving from China deflating the market. It also includes the Tesla’s habitual price process changes on new arrivals as compared to previous ones they had in July.
Additionally, there is still some doubts from consumers side and retailers side regarding the life of used EV batteries, with perceptions around reliability and range retention over time.
The current status of people’s interests in EV market, trading in their Tesla model 3 for a latest design model-Y, which transformed the supply situation. Not only this,this has also changed that government policies encouraging towards EVs and PHEVs sales like rebates and fringe-benefits tax (FBT) cuts for business buyers, are few examples of regional market factors.
Moroever, in US the average paid for an EV was declined by 20% YoY. This happened because of Tesla, a market leader in EVs paying a volume game and trimming back its prices.
The factors including the huge supply of EVs and cheaper new prices will definitely have a worst impact on used EV prices down the line.
After realising the facts, countries like Netherland, France, Germany are now offering rebates or incentives to boost the used EV market, where penetration of new EVs are particularly high.
Resale value is a major factor which is considered by people purchasing new EVs, so if the used EVs known as ‘Valley of Death’ could hinder uptake.
How about the longer turn? Though, it is expected for the near future, the proliferation of over-the-air updates for any new EVs should result in used EVs holding their value better, if the charging structure expands, fuel prices rise or if the people’s point of view change for used EV battery health.
Alas,with time EVs will become more affordable for people willing to buy one with miles on the odometer.