Used EVs-Pricing is DOWN

Investment Analysis Clubs Macro Economic Trends and Risks
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2 conflicting themes regarding low prices for a used EV.
I believe link #2 tells the story more accurately–Triple the inventory results in lower pricing. Supply and demand.

Not that the first link is a pack of lies. I am sure some people are leery of the condition of a used EV battery pack. And the new 2024 tax credit law reduces the number of EVs eligible for a tax credit. Plus the lower pricing of a new EV drives down pricing on used EVs. All true but the macro effect of triple the inventory methinks is the key reason.

https://www.bloomberg.com/news/features/2023-12-22/bmw-tesla-and-other-electric-used-cars-are-proving-tough-to-sell
The shift away from cars with dirty combustion engines is running into a new hurdle: Drivers don’t want to buy used electric vehicles, and that’s undermining the market for new ones, too.

In the $1.2 trillion secondhand market, prices for battery-powered cars are falling faster than for their combustion-engine cousins. Buyers are shunning them due to a lack of subsidies, a desire to wait for better technology and continued shortfalls in charging infrastructures. A fierce price war sparked by Tesla Inc. and competitive Chinese models are further depressing values of new and used cars alike, threatening earnings at rivals like Volkswagen AG and Stellantis NV.

In the $1.2 trillion secondhand market, prices for battery-powered cars are falling faster than for their combustion-engine cousins. Buyers are shunning them due to a lack of subsidies, a desire to wait for better technology and continued shortfalls in charging infrastructures. A fierce price war sparked by Tesla Inc. and competitive Chinese models are further depressing values of new and used cars alike, threatening earnings at rivals like Volkswagen AG and Stellantis NV.

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I think it’s simpler than that. Tesla crashed the market when they slashed prices earlier in the year. That made the gap between “new” and “used” so much narrower that people had the chance to buy “new” near the price of “former used.” So used prices cratered too.

There are likely other factors, but I’d say that’s the big one.

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That was a factor in my decision to buy a new 2024 RAV4 Hybrid instead of saving only a couple of thousand for a used 2023 model. It’s also the last car I’ll own (probably), so I’m going to go out in style!!

JimA

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