Used EVs lose nearly half their value in 18 months: INDICATA.

The latest Market Watch report from INDICATA UK brings great news for those looking to buy a used electric vehicle (EV) as prices have significantly dropped. According to the report, the average three-year-old used electric car is now 43.8% cheaper than it was just eighteen months ago.

This decrease in price is due to a 2.0% fall in June alone, contributing to the overall trend of achieving price parity between electric vehicles and internal combustion engine (ICE) cars in various sectors. Despite the fact that used car prices in the UK only fell by 0.1% in June, there is a clear indication that prices are stabilising after a significant 16.5% drop since January 2023.

Furthermore, the demand for used EVs is on the rise, following the decrease in prices and better alignment with supply. Market Days’ Supply (MDS) dropped to 50 days at the beginning of July, slightly behind hybrids at 47.5 days and diesel and petrol at 45 and 41 days, respectively. The UK boasted the lowest MDS in Europe in June, mainly due to increased demand and dealers being cautious about stocking zero-emission vehicles on their forecourts.

Manufacturer-backed tactical registrations played a crucial role in the June market, with the sale of used cars under 12 months old increasing by 15.9% month-on-month. This tactic is being used by original equipment manufacturers (OEMs) to meet their 2024 target of 22% Zero Emission Vehicle (ZEV) mandate, pushing more nearly new EVs into the market.

As for market share, EVs accounted for 9.3% of used cars up to four years old in June, followed by diesel (10.8%) and hybrids (30.6%), with petrol remaining the dominant fuel type at 49.1%.

Dean Merritt, INDICATA UK’s head of sales, highlighted the challenges faced by leasing companies with used EVs at the end of customer contracts. Some companies are turning to secondary leasing for younger, lower mileage used EVs to alleviate the residual value losses and prevent an overflow of ex-fleet cars in the market.

Despite these challenges, consumer demand for used EVs continues to grow as prices become more affordable and the vehicles gain traction in the used car market. However, Merritt noted that this transition is taking longer than anticipated, but the positive trend is encouraging for the future of electric vehicles.