Recent government inflation data shows that used car prices have come down to just about the pre-pandemic level. The report also revealed that the prices for used EVs are falling even faster compared to other cars. According to the research done by iSeeCars.com, used CV prices are falling and impacting the overall car market. In the June report, it was seen that used EV prices have fallen by nearly 30% every passing year with the price drop hovering at 8.8% to 16.8 % in March and then to 29.5% in June. "A year ago, used EV prices were on the upswing, rising faster than the average used car,” the firm's executive analyst Karl Brauer said in the report. "Electric vehicle prices are now falling at nearly 10 times the rate of the average used vehicle, reflecting a clear shift in EV supply and demand," he added. The overall used car market seems to be stabilizing with prices down 3.6%, as per the firm.
Price fall attributed to massive Tesla price cuts
Tesla's massive price cuts earlier this year added to the fall in the used EV market. "With Tesla cutting prices on new models, its used EV values have tumbled. And because Tesla makes up the bulk of the used EV market, the dramatic drop in Tesla values has impacted the entire category," said the firm.
However, Tesla is not the only thing pulling the used EV market downward. Other factors like rising interest rates and conscious shoppers are adding to it. According to the data, used cars with the most price increases were normal gas-powered cars left by major brands like Mercedes-Benz SL, Chevrolet Suburban, Fiat 500X crossover, and two Porsche sportscars. The data revealed that the Miami market saw the steepest used car price drops which is at 8.1% year over year in June 2023; New York saw a 6.9% drop; Jacksonville, Florida was at 6.8%.
EV market growth—an uphill battle
Close to 300,000 new, full battery-electric vehicles were sold in the country between April and June 2023. "When it comes to EV sales, the market is likely heading into its Trough of Disillusionment...where collaboration across many parties will be necessary to push through," Cox Automotive said in a release. However, despite the growth, the EV market will only be 3% of the new vehicle market in 2023. Concerns like upfront costs, charging infrastructure, and driving range are also adding to the slow growth of the market.
Is EV the future?
The world is evolving at the light's speed and what's in store for us is extremely hard to tell. However, there's no denial in the fact that the car industry is seeing radical transformation with most people agreeing that the next decade will be make or break for the EV industry.
A JP Morgan report estimated that the EV industry will rise close to 8.4 million vehicles which is a 7.7% in market share by 2025. The sector is estimated to rise from a 3% global market share to around 25 million vehicles comprising of 23% market share, as per the report. "This leaves pure-ICE vehicles with around 70% of the market share in 2025, with this falling to around 40% by 2030, predominantly in emerging markets," reveals the JP Morgan report.
In 2021, Congress decided to pass the Bipartisan Infrastructure Deal which pledges to replace the government's 650,000-vehicle motor pool with EVs, electrify 20% of the country's 500,000 school buses, and also invest $7.5 billion to build a network of 500,000 electric vehicle chargers across the country. The incorporation of EVs could greatly contribute to a sustainable future.
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