The recent decline in used electric vehicle (EV) values has kickstarted demand among buyers and led to an increase in sales.
Used EV prices fell by 15.3 percentage points between October 1, 2022, and January 31, 2023.
Stock starved car retailers have been avoiding used EVs as values continued to decline four times faster than their diesel-powered equivalents.
Despite struggling to source a sufficient volume of cars to fill their dealership forecourts, Cap HPI director of valuations Derren Martin told AM that retailers’ appetite for EVs had stalled as the UK encounters “consumer pushback” amid rising energy prices and media coverage of queues at public charge points.
The massive price fall helped reduce Market Days’ Supply (MDS – Indicata’s measure of marketability, the lower the better) levels by approximately one third to 117 days in early February. However, that meant used EVs were still taking twice as long to sell as used hybrids and even longer than used ICE cars.
Used EV stock levels reached a high level on 1 January 2023 with an MDS of 161 days, up from just 40 days in August 2022 when market demand was very strong.
Despite all the interest in EVs they still only accounted for just 5.0% of UK used sales in January compared with 46.0% for petrols, the most popular fuel type, 37.3% for diesel and 11.7% for hybrid.
“Just as three to four-year old EVs were coming back into the market the level of younger cars being recycled by OEMs and their dealers increased. Simultaneously, the cost of living was rising quickly, and consumers couldn’t justify paying two to three times as much for a used EV as an ICE car,” explained Jon Mitchell (pictured), Indicata UK’s group sales director.
“The result was a rapid fall in demand and prices as part of a major market correction. We expect a few more future adjustments as EVs establish themselves with consumers and dealers as they become an integral part of the used car mix,” he added.
In a market review with AM, on February 14, Martin said that there was an end in sight to the decline in EV values seen in recent months.