In a remarkable turn of events, the price of used electric vehicles (EVs) has plummeted below that of their gas-powered counterparts, marking a stark reversal from previous years. According to a recent study conducted by iSeeCars, which analysed data from over 2.2 million used cars sold between May 2023 and 2024, the average price of a used EV has dropped by 29.5 percent year-over-year. In contrast, the average price of used gas cars decreased by a more modest 6.1 percent during the same period.
As of May 2024, the average price tag for a used electric vehicle stands at USD 28,767, marking an 8.3 percent reduction compared to the average gas car price of USD 31,424. This represents a significant shift from just a year ago, when the average used EV commanded USD 40,783, compared to USD 33,469 for gas cars.
“This dramatic decline in used electric vehicle values over the past year is undeniable,” stated Karl Brauer, executive analyst at iSeeCars. “Since June of last year, we’ve witnessed price drops ranging between 30 and 40 percent for EVs, while gas car prices have only seen a marginal decrease of 3 to 7 percent over the same period.”
The study highlights a notable trend: despite a stabilization observed towards the end of 2023, EV values experienced a renewed downward trajectory starting in February 2024, continuing for the subsequent four months. Meanwhile, the average price of used gas cars fluctuated by approximately USD 400 during this period.
“It’s evident that consumers shopping for used cars are no longer willing to pay a premium for electric vehicles. In fact, many now perceive electric powertrains as a disadvantage, thereby diminishing their appeal and market value relative to traditional models,” explained Brauer.
In contrast to the volatility seen in the EV market, demand for used gas cars surged amidst production shortages in the new car market triggered by the pandemic. Although this demand is gradually stabilizing, the average price of used gas cars remains robust at around USD 31,000, well above pre-pandemic levels.
“Over the past year, the pricing dynamics for traditional internal combustion engine vehicles have shown a much more modest fluctuation, with price changes typically ranging between 3 and 6 percent most months,” noted Brauer. “This is starkly different from the sharp 30 to 40 percent declines observed in used EV pricing.”
Uncertain Future for EV Values
The downward trajectory of used electric vehicle prices shows no signs of abating, raising concerns about when prices might hit bottom. “While the current drop in used EV prices is striking, what’s more concerning is the lack of stabilization in sight,” remarked Brauer. “At some point, we anticipate these prices will reach a floor, but we’re not there yet.”
A case in point illustrating the stark shift in used vehicle values is the comparison between Tesla Model 3 and BMW 3 Series prices. Over the past year, the Model 3 transitioned from commanding a premium over the 3 Series to being priced significantly below it by May 2024.
Similar trends were observed among competitive models such as the Tesla Model Y and BMW X3, underscoring the broader market trend where EVs are rapidly losing value compared to their gas-powered counterparts.
As electric vehicles continue to flood both the new and used car markets, the over-supply condition appears poised to persist. “Without a significant catalyst to boost EV demand, such as breakthroughs in battery technology or substantial incentives, the outlook for used EV prices remains bearish,” concluded Brauer.
In summary, the iSeeCars study provides a compelling narrative of the evolving dynamics in the automotive market, where electric vehicles, once heralded as the future, now face a challenging present as their market values undergo a rapid decline. This transformation underscores a broader shift in consumer preferences and market perceptions that could have lasting implications for the automotive industry.