Looking Backwards to Drive Forwards: Discussing the Used EV Market
12 December 2023 at 15:50:33
Something old, something new, something borrowed, something green?
The used EV market has become quite the topic of conversation lately, especially with the 2030 decarbonisation deadline looming. But are used EVs the answer we are looking for to solve issues with the vehicle supply chain? And is price really as competitive as it seems?
According to a recent report by the Green Finance Institute, 73% of current EV drivers would buy one used. And it isn’t just the EV converts that are on board, over 10 million people not currently driving an EV would also consider a second-hand purchase.
And the data is there to prove it. In the past three months of 2023, the used BEV (Battery Electric Vehicle) market rose 81.8%, with a total of over 30,000 vehicles changing hands in the period between April and June.
But what is driving this growth? Primarily two things: price and accessibility.
The Cost of Going Electric
One of the biggest issues plaguing the EV market currently is the higher upfront cost of electric models. The average new car cost approximately £40,000 in January 2023 and EV costs are typically around £10,000 more. With the cost-of-living crisis still ongoing, squeezing the budget to buy a new car is impossible enough without adding 1/4 to the price to make it electric.
For some, it feels like the deadline for decarbonisation is coming quickly, but we are still waiting for prices to drop with the same urgency.
Something that Iain Stewart MP, Transport Committee Chair, summarised perfectly:
‘The Government has not fully thought through, or properly responded to, our scepticism about expecting ordinary motorists to bear the financial burden of transitioning to all-electric vehicles.’
The used EV market, therefore, has become an oasis for drivers looking to decarbonise their transport (in line with government incentives) while attempting to maintain a realistic budget. As second-hand prices for EV models fall to meet their ICE equivalents.
Data from AutoTrader stated that in May 2023 the number of used EVs under the £20,000 threshold stood at nearly 30% of the market. Over three times that recorded in August of last year. Something that is supported by recent Cap HPI data, that suggests an average drop in used EV values of £600 in July of this year.
Right Time, Right Place
But pricing doesn’t exist alone as a contributing factor to the growth of the UK’s used EV market.
Anyone that has attempted to buy a car over the past 12 months may know, the supply chain for purchasing new cars has been in rough shape. 3 year long wait lists, last minute delays and unpredictable timeframes are some of the things that you may be familiar with.
Although these factors have definitely begun to soften as the supply chain heals, a gulf has been created between available supply and demand. As a result, more people have been seeking out second-hand, readily available models.
Buying used is more than anything else, easy. Where demand meets supply (as it does now), used EVs have become the beacon of convenience. Which is why it is no surprise that the number of enquiries for 1-5 year old electric cars has increased by almost 100% in the past year.
However, to maintain a healthy supply of used electric cars, there is still some reliance on widespread fleet uptake. Which, although a powerful driver in the popularity of electric and hybrid vehicles, shows some degree of hesitation when fully committing. Especially when it comes to the adoption of LCEVs - a market that has continued to decline despite a 94.6% increase in demand.
What Does This Mean for the Future?
Increased traffic to the used EV marketplace is ultimately a reflection of multiple factors and both pricing and availability show potential as significant players.
However the pre-loved EV marketplace starts to shape up over the next few years, it is clear to see that it will play a significant role in the widespread uptake of zero emission vehicles that is needed to drive the country towards a sustainable future – in more ways than one.
Uptake of sustainable travel means more than just the fuel you use to keep your car going. Buying a used car encourages us to invest in a circular economy and escape the throw away culture that we are so used to. And when we pair this with a transport system that champions waste reduction, used EVs seem like a natural extension of the Government’s intention when first proposing the switch to non-fossil-fuel-dependent transport to begin with.
How this develops in the years to come is something that is yet to be seen, but the current prognosis is looking bright for the trading of green second-hand vehicles.
What do you think?