The Used Electric Vehicle Market Surpasses New Sales, Excluding Tesla Model Y
The used electric vehicle (EV) market has reached a level of maturity where it is now outperforming new sales for all models, with the exception of the Tesla Model Y. This surge in demand for used EVs is evident in the latest market report from battery health and data startup, Recurrent.
In the first half of 2023, the United States witnessed the sale of 140,000 used EVs, surpassing even the total number of new Tesla Model 3s sold within the same timeframe. For context, during this period, it is estimated that approximately 200,520 new Model Ys were sold.
Other notable new EV sales during the initial six months of 2023 include the Chevrolet Bolt with 33,659 units sold, followed by the Rivian R1T with 16,452 units and the Volkswagen ID.4 with 16,448 units. Consequently, Tesla continues to dominate both the new and used EV markets in the United States.
According to Recurrent’s analysis, “Used EV sales now surpass the sales of all other new EV models, except for the Tesla Model Y and 3.” Furthermore, “the used EV market offers greater affordability than it has in the past 2.5 years, with a preference for newer, longer-range models.”
This is excellent news for consumers seeking to purchase used EVs, as prices have reached their lowest point since the beginning of 2021, and availability appears to be on the rise. The average price for a used EV in the United States is currently $27,800, marking a 32 percent year-over-year decrease. Tesla’s influence on this trend is evident, as the average price of a used Tesla Model 3 has decreased by over $9,000 since 2021.
Multiple factors have contributed to the growth of used EV sales, one of which is the threefold increase in used EV inventories over the past three years. Starting with 11,000 vehicles in April 2021, the inventory has now surpassed 33,000. Moreover, the share of pure EVs within this inventory has risen from 55 to 73 percent, with the remainder being plug-in hybrids.
Additionally, approximately 30 percent of used EVs qualify for the $4,000 federal clean vehicle credit, and obtaining this credit is about to become more convenient. Starting from January 1, 2024, customers will have the option to transfer EV credits to a car dealer, reducing the vehicle’s purchase price instead of waiting until they file their tax returns the following year.
If you are concerned that most used EVs are outdated with degraded batteries, you’ll be relieved to know this is generally not the case. Nearly 30 percent of the vehicles in the inventory are less than two years old, and 45 percent are three years old or newer. Although EV batteries do experience degradation over time, some owners have reported negligible degradation rates even after driving over 100,000 miles.
These developments paint a positive future for the used EV market in the United States. The industry is on track to become more affordable and accessible to a wider segment of the population in the coming months and years.
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