Used EV Prices Plummet Amidst Growing Popularity
Used electric vehicles (EVs) are experiencing a significant drop in retail prices, despite remaining popular and holding record levels of sales in the UK used car market. According to the latest Indicata Market Watch report, the average retail price of a used EV has fallen to just 55.29% of its original new retail price, a sharp decline from around 60% at the beginning of the year. This trend is attributed to an anticipated surge in new EV supply in the latter half of the year, driven by manufacturers needing to meet Zero Emission Vehicle (ZEV) mandate targets.
Key Takeaways
- Used EVs are at record sales levels, representing 6.39% of all used car sales in June.
- In the under-four-years-old segment, EVs now account for over 13% of total sales.
- The average retail price of used EVs has fallen to 55.29% of their original new price.
- Manufacturers are expected to push more EVs to market to meet ZEV mandate requirements, potentially increasing supply and further pressuring values.
- Despite price concerns, EVs remain fast-selling, with models like the Jaguar I-PACE, Tesla Model 3, and MG HS/EHS showing low Market Days’ Supply (MDS).
ZEV Mandate Pressures Values
The UK’s ZEV mandate requires 28% of new car sales to be zero-emission in 2025. However, with new EV sales only reaching 21.6% by mid-year, manufacturers face financial penalties. This shortfall is expected to lead to a substantial increase in the number of new EVs entering the market in the second half of the year. This influx, coupled with limited export options for surplus vehicles, is likely to exacerbate the downward pressure on used EV values.
EVs Remain Fast Sellers
Despite the pricing challenges, EVs continue to be among the quickest-selling vehicles in the UK. In the market for cars under four years old, the Jaguar I-PACE leads with a Market Days’ Supply (MDS) of just 22.4 days. The Tesla Model 3 and MG HS/EHS follow closely with an MDS of 25.7 days. The overall UK-wide MDS for EVs has improved significantly to 46 days, indicating a healthier balance between supply and demand for the segment as a whole.
Dealer Caution Amidst Price Declines
Dean Merritt, Indicata UK head of sales, commented on the situation, stating, "Used EV sales are still climbing, but it’s clear dealers are having to be more competitive on price to maintain that growth. What’s worrying is that supply is set to increase further, and values could come under even more pressure." He added that rising volumes of nearly-new EVs and limited demand growth make prices vulnerable. Dealers are showing caution about stocking too many EVs, with a nervousness surrounding resale values and stock turnover. Effective pricing and inventory management will be crucial for dealerships in the coming months.
Top Selling Used Models
While EVs face price pressures, traditional internal combustion engine vehicles continue to dominate overall volume sales in the under-four-years-old segment. The Vauxhall Corsa is currently the leading model, followed by the Ford Puma. The Kia Sportage also features prominently, mirroring its strong performance in the new car market with robust sales in the used car sector.
