The used car market is seeing significant growth in sales of plug-in hybrid (PHEV) and battery electric vehicles (BEV), but this growth is accompanied by a notable decrease in their resale values.
Market Growth:
- UK used car market grew 4.3% in Q3 2024, marking the seventh consecutive quarter of growth.
- Record 53,423 used BEVs sold, a 57.0% increase, reaching 2.7% market share.
- PHEV sales up 29.0%, hybrid sales up 35.8%.
Value Depreciation:
- Some EVs losing up to 50% of their value in the first year.
- Used EV prices have fallen below gas-powered cars for the first time.
- Average used EV price dropped from $41,000 to $28,800 in a year.
Specific Examples:
- Audi e-Tron GT: 49% depreciation in 12 months
- Ford Mustang Mach-E: 52% depreciation in 12 months
- Polestar 2: 52% depreciation in 12 months
- Mercedes EQE: Estimated to drop from £89,290 to £49,500 in first year
Factors Contributing to Depreciation:
- Rapid technological improvements in newer models
- First-generation technology becoming outdated quickly
- Concerns about EV range and charging infrastructure
- Discounts on new EVs affecting used market prices
Market Context:
- Petrol and diesel vehicles still dominate, accounting for 91.7% of used car sales.
- Overall used car market up 6.0% in the first nine months of 2024.
While the growth in used EV and PHEV sales is encouraging for the transition to electric mobility, the rapid depreciation presents challenges for both consumers and the industry. This trend underscores the need for continued support and incentives to maintain the momentum of EV adoption in both new and used markets.
