While new electric vehicle sales are slowing, used sales are ramping up | CNN Business (2024)

While new electric vehicle sales are slowing, used sales are ramping up | CNN Business (1)

An electric car charges at a station in Oakland, California in 2020.


Sales of new electric vehicles have started to slow, but the opposite is happening with used EVs.

A combination of factors has led to increases in both the number of used electric vehicles available to purchase and the number of people looking to buy them. The reasons include tax breaks, price drops and a glut of cheap Tesla models caused by Tesla’s own price cuts on its new cars and SUVs.

The auto site Cars.com, which carries dealer listings for used and new vehicles, said searches for used EVs on its site have increased 45% since last year. On TrueCar, another site that helps car shoppers find new and used vehicles, interest in EVs was up 39% in the first quarter of this year compared to last year. The used car sales website Carvana saw its used EV sales more than double since last year.

One reason is that federal tax credits on used EVs, not just new ones, are finally available, and they’re hitting at just the right time. The $4,000 federal tax credit for pre-owned EVs can be used by the dealership as a price reduction at the time of the sale, rather than the customer having to wait until they file their taxes to get the money. Not all dealerships are willing to do the paperwork, though. Also, there are limitations on the vehicles that qualify as well as limits on the income of the buyer.

One Georgia car dealership executive, who asked to remain anonymous because he wasn’t authorized to discuss sales strategies with the press, said his dealership has seen a huge increase in sales of used EVs since he started advertising that his dealership could apply tax credits at the time of sale, immediately lowering the price by $4,000.

“What it’s doing, in my opinion, is it’s allowing middle income shoppers that really are interested in EVs, but had always thought they were out of their price range to come into the market, become EV owners, and also achieve a car payment that is sustainable,” the dealer said.

Price cuts and supply gluts

A surge in the number of used EVs available has also enabled an economically paradoxical situation: even as demand for used EVs is rising, prices are still falling. According to Cars.com, even as searches for used EVs on the site rose 45% since last year, the supply increased 42% and the average price of a used EV on the site has dropped 20%.

Truecar reported a similar situation. While increases in used EV sales are huge, they still make up a small portion of overall used vehicle sales. Carvana, for instance, reported that used electric vehicles made up 4.3% of its sales in the first quarter of this year, but that was a big jump from 1.8% last year.

The All-Electric Ford Mach-E is displayed during the 2023 Los Angeles Auto Show at the Los Angeles Convention Center on November 24, 2023 in Los Angeles, California. Josh Lefkowitz/Getty Images Related article How EVs became such a massive disappointment

“You have people who’ve been sitting on the sidelines who want an easy, risk-free way to adopt new technology,” said Matt Jones, a spokesperson for TrueCar. “And the risk is way reduced when you’re buying something that costs $20,000 versus $80,000.”

Manheim, a company owned by Cox Automotive that sells used cars wholesale to auto dealers, has had to upgrade its operations across the country to deal with the influx of used EVs. The company, which operates a number of large auction sites that each process thousands of used cars, sold 60% more EVs last year than in 2022 and expects the number to triple in 2024.

“We’ve had to add chargers, but it’s not just chargers. It’s chargers and then everything in our shops… were built for [internal combustion] vehicles,” said Grace Huang, President of Cox Automotive Inventory Solutions. “And so we’ve had to add lifts that can handle more weight because the batteries are very heavy.”

A big part of the drop in used EV prices can be attributed to Tesla, which — over the past year or so — has been aggressively cutting prices of its popular Model 3 sedan and Model Y SUV. It’s a simple matter of economics that when an automaker cuts the prices of its new products, the prices of similar used products – in this case, EVs – drop too.

The price of a given used 2021 Tesla Model 3 sedan dropped, on average, about 29% during calendar year 2023, according to data fromEdmunds.com. That was more than the average model year 2021 used vehicle which would have lost about 19.5% in value over that same period.

EVs have always had faster depreciation, or loss in value, than gas cars, though, which works in favor of buying used EVs, said Jones.

A good time to buy a used EV?

Used EVs still cost more, on average, than used gas-powered vehicles, but they cost a lot less than new EVs. While prices for new EVs average around $63,000, prices for used ones average around $36,000, according to Cars.com.

And the price gap between electric and gas powered used cars is shrinking rapidly, according to Carvana. Where there was a $13,000 difference, on average, between gas powered used vehicles and used EVs in the early part of 2023, the difference has shrunk to just $7,000 by the first quarter of 2024.

The appeal of what’s available has also increased. EVs have improved over time, so models now hitting the used market now are a lot better than the very early EVs that would have been available as used cars years ago, said Rebecca Lindland, an industry analyst with Cars.com.

“This is a significant change so that people who may have looked at an EV five years ago, It’s worth a revisit because of the improvements in technology, specifically in range and charging,” she said.

Batteries in used EVs are also holding up well, according to Recurrent, a company that tracks EV battery health. The vast majority of used EVs can be expected to go very nearly as far on a charge as they could when they were new.

Getty Images video Related video Is getting a fully electric vehicle even worth it?

The fastest-selling used EVs on Cars.com right now are the Chevrolet Bolt models, Rivian trucks and SUVs and the Hyundai Ioniq 5, according to Cars.com.

Courtney Vaughn just bought a used Hyundai Kona EV on Carvana that will cost her $16,000 after the $4,000 tax credit, she said. She lives in New York but is having the car delivered in California so it will be waiting for her there when she moves there for a new job.

“I’m really excited and there’s only, like, 66,000 miles on it,” she said.

Concerns about gas prices and having to deal with California’s smog tests interested her in buying an EV, she said.

Besides the federal tax credit, Lindland also recommends people check for local and even municipal tax incentives for new or used electric cars and home EV chargers. Incentives can vary a lot from place to place.

“Really look at your immediate neighborhood,” she said. “This is a zip code level search.”

A good local car dealer should be able to help you find out about all the incentives that are available, she said. She also recommended looking at the US Department of Energy’s Alternative Fuel’s Data Center, which has a guide listing federal and local EV incentives.

While new electric vehicle sales are slowing, used sales are ramping up | CNN Business (2024)


While new electric vehicle sales are slowing, used sales are ramping up | CNN Business? ›

Sales of new electric vehicles have started to slow, but the opposite is happening with used EVs. A combination of factors has led to increases in both the number of used electric vehicles available to purchase and the number of people looking to buy them.

Why are EV sales slowing? ›

Several automakers have said that concerns about driving range and charging infrastructure are increasing. These issues may lead consumers to have second thoughts about buying an EV.

Are electric car sales going up or down? ›

But while sales of electric cars are still growing, it's a slower pace of growth than the previous year: 2022 sales increased 38% from 2021. During the final three months of 2023, Californians purchased 103,127 electric cars, an 8% increase over the same period in 2022.

What are the factors affecting electric vehicle sales? ›

vehicles better. The most common factors are EV price, environmental concern, availability of charging station, time is taken to charge, sustainability, experience, perception towards the electric vehicle, and social influence.

How are electric vehicles changing the automotive industry? ›

Power efficiency and performance — lower fuel costs

Powering electric cars is cheaper compared to the fuel costs of combustion engine vehicles. Additionally, the maintenance costs of electric transportation vehicles are significantly lower, constituting 40% of the service costs of combustion engine vehicles.

Is Tesla losing the EV market? ›

In 2023, Tesla's share of the U.S. EV market dropped to 55%. And in China, it's rapidly losing ground.

Why not to buy an EV yet? ›

There are plenty of reasons not to buy an electric vehicle in 2024: Auto loan rates are high. Despite a recent wave of discounting, many EVs remain pricier than gas-burning cars. And an incomplete network of sometimes glitchy chargers has stoked drivers' “range anxiety” about running out of juice.

Why are electric cars not the future? ›

While bigger batteries allow drivers to travel farther between charges, they also make the cars heavier, more dangerous, more expensive, and worse for the planet. The "range anxiety" that has resulted in massive batteries is another reason EVs don't work as a replacement for gas cars.

Is the EV market in trouble? ›

If you follow the electric vehicle market anywhere in the world today, it's pretty much bad news these days. That's especially true in America, where slowing production in layoffs at majors like Tesla, Ford and GM are the inevitable result of dramatically softening sales.

Will EV sales bounce back? ›

And for all the talk of an EV slowdown, many longer-term forecasts haven't budged. In April, the International Energy Agency estimated that US sales of fully electric vehicles will soar to 2.5 million in 2025, from 1.1 million last year.

What is the biggest problem with electric vehicles? ›

Battery issues, climate control, and in-car electronics are among the biggest problems in electric vehicles.

How much does it cost to replace the battery in an EV? ›

How much does an EV battery cost to replace? EV battery replacements range from $6,500 to $20,000 based on the pack, size and manufacturer. If a battery is within its manufacturer warranty, typically 8 years and 100,000 miles, then you should get a replacement battery at no extra cost.

How to increase sales of electric vehicles? ›

Build awareness via paid ads and social media: Using social media and paid ads is an effective way to build awareness of electric vehicles at your dealership. You can make posts educating the public about EVs, show off your EV inventory, and more, to raise awareness. 6.

What will happen to auto mechanics with electric cars? ›

Because electric vehicles require far less maintenance and repair than traditional combustion engines, the state predicts that nearly 32,000 auto mechanic jobs will be lost in California by 2040.

Why are electric cars being pushed? ›

The Rise of Electric Vehicles. Affordable Models: More efficient manufacturing, falling battery costs and intense competition are lowering sticker prices for battery-powered vehicles to within striking distance of gasoline cars.

Why are electric cars losing money? ›

EV depreciation is also impacted by a volatile market. Reports of less-than-ideal residual values for EVs can impact market confidence, producing a negative feedback loop that further pushes average values down. For many potential EV buyers, there's also the question of how long the battery will last.

Why are EV stocks declining? ›

Why EV Demand Is Slowing Down. EV demand growth is slowing as early-adopters — who purchased EVs despite manufacturing quality problems — have done their buying. This leaves the market open to rivals who can overcome the significant challenges of satisfying the needs of more pragmatic buyers.

Why are electric vehicle prices dropping? ›

As the industry moves beyond enthusiastic early adopters, it now faces car buyers who are concerned about charging infrastructure and high upfront costs. So car dealerships are discounting electric cars on their lots. Average EV prices dropped $2,000 last month.


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