Most of the news coverage in the electric vehicle industry has focused on new models, such as those from Tesla, and recent developments in subsidies and rebates. However, there’s been very little coverage of the used electric vehicle market or used EVs.
Assessing the Size of the Used EV Market
To understand the dynamics of the used electric vehicle market, it’s essential to determine its size and the number of people buying used electric vehicles. Auto Remarketing, an industry trade publication, provides valuable insights into this aspect.
Insights from Experian’s Survey on Used EV Financing
Experian, a major credit bureau, conducted a survey on used electric vehicle financing. In 2021, 60,000 pre-owned electric vehicles were financed. The numbers for 2022, although not complete, indicated a slower pace, tracking around 42,000 for the year to date.
Factors Contributing to Low Transaction Volumes
The study highlights a possible reason behind the slow growth in the used EV market. The history of electric vehicles reveals that production in large volumes only began in the late 2000s, resulting in a limited number of used electric vehicles available for purchase.
The Impact of Long-Term Vehicle Ownership
Many electric vehicle owners tend to keep their vehicles for an extended period, primarily because electric vehicles often serve as secondary or tertiary vehicles. The slower rotation of these vehicles contributes to the lower volume of used electric vehicles on the market.
Looking Ahead: Determining Factors for the Used EV Market
The next few years will be crucial in determining the trajectory of the used EV market. Questions arise about whether people are inclined to buy used EVs, trade them in for new ones, or opt for new electric vehicles altogether.
Considerations for Purchasing Used EVs
As the market for used electric vehicles develops, potential buyers need to weigh their options. Factors such as battery condition, model currency, and potential cost savings come into play. Unlike traditional vehicles, the mileage on electric vehicles may not be as critical a factor.
The longevity of electric vehicles
Electric vehicles, with their simpler electric motor systems, may offer more longevity compared to traditional internal combustion engine vehicles. The wear and tear on internal combustion engines can lead to quicker deterioration compared to the electric motors in EVs.
Anticipating the Impact on Sales
With used EVs entering the market, it remains to be seen how the volume and sales rates will be affected in the next couple of years. The increasing availability of used electric vehicles could potentially influence the overall sales landscape in 2024 or 2025.