Used EV Market Triples in Size
A lot has changed since we started tracking the used electric vehicle market 18 months ago. Prices have had a meteoric rise - and readjustment, and there has been an injection of newer, longer range models into the market. More than that, the size of the market has more than tripled since then.
The number of electric cars in inventory is not just a measure of a growing market. It also can indicate that vehicles are sitting longer on dealer lots, as a result of higher interest rates.
Sky High Used EV Prices Come Back to Earth
A price correction is underway in the used electric vehicle market. After a steep rise in 2021 and a multi-month plateau in 2022, prices have steadily declined since August 2022, bringing them back in line with where they were in 2021. Rather than mistaking this drop for a market decline, understand that this is a return to Earth from the stratospheric used electric vehicle (EV) values seen in 2021 and the first two thirds of 2022.
The average used EV price was almost 30% higher in July 2022 than in April 2021. As of January 2023, the group of used vehicles that we track over time, called the Recurrent Price Index, has fallen 17% from its July 2022 peak.
As more evidence that this is merely a price adjustment, these prices are still 7% higher than when we started tracking them in March 2021. The higher price today is not just driven by price increases or inflation, though. It is largely due to the influx of higher priced and newer models on the used EV market.
The chart above shows percent changes in the Recurrent Price Index, the price tracker for the used EV market segment which we have followed since April 2021.
The models included in the 2023 Recurrent Price Index are:
- 2017 Chevrolet Bolt
- 2018 Nissan LEAF
- 2018 Toyota Prius Prime
- 2019 Tesla Model 3
- 2019 Chevrolet Volt
- 2020 Tesla Model Y
- 2020 Hyundai Kona EV
- 2021 Ford Mustang Mach-E
We keep this price index refreshed to reflect the most popular and representative models as EV adoption accelerates.
Two models that we are paying particular attention to this winter are Tesla’s Model 3 and Chevrolet’s Bolt. These two pioneering cars had been previously disqualified from the federal tax credit after hitting the 200,000-vehicle production cap written into previous legislation. However, the Inflation Reduction Act discarded this limit, so as of January, both of these vehicles are once again eligible for $7500 in tax credits when purchased new.
We expect this to have a ripple effect in the price of used Bolts and Model 3s in the next few months, and anticipate their prices falling faster than the overall market. Both the Model 3 and the Bolt EV have been top searches in Recurrent’s tax credit eligibility tool.
Surprisingly, we did not see very low prices for these cars in the January market data. We suspect that the lower priced Bolts and Model 3s have already been purchased, removing them from the market listings and skewing inventory prices towards higher priced versions.
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Pool of Used EVs Eligible for Tax Credit Increases 66%
The Inflation Reduction Act was signed into law in August 2022 and reinvested in tax credit incentives for new and used clean vehicles. One of the main restrictions for used vehicle tax credits was that the price of an eligible sale was capped at $25,000. Recurrent’s initial concern about the legislation was how few used EV listings would be eligible based on the sale price criteria alone. In October, an analysis of listings suggested that only 12% of cars would have been eligible. However, as 2023 started and the tax credit has gone into effect, we are seeing a greater percentage of dealer listings under $25,000 - up to 20% as of January 2023.
Since some final sale prices for used vehicles can be impacted by continuing price drops, trade-ins and negotiations, we’re tracking the total percentage of inventory below $30K as well, since it’s feasible that some of these listings have a final sale price just below $25K. When those listings are included, nearly 30% of used EV listings are potentially eligible for the used EV credit.
In 2023, we’re predicting that the sub-$30,0000 used EV market will surge, and a greater variety of makes and models will be found below $25,000. By 2024, this sub $25,000 sector should be filled with EVs offering 250+ miles of range, especially if the Bolt EV and entry-level Tesla prices fall as a result of restored EV tax credit eligibility for those two models.
Thinking about the future of the used EV market also gives us a moment to consider how much it has changed since we began tracking it. In July 2021, for example, almost 57 percent of used EV inventory was priced below $25,000 and 64 percent was below $30,000 A year later, thanks to inflation, high demand, and an influx of pricey, newer pre-owned models, those percentages dropped below 13 and 19 percent, respectively.
In case you missed it, Recurrent also created a tax credit eligibility tool for EV shoppers. You can try it by entering a VIN from your local car dealership. That page is an excellent resource for used EV tax credits and consumer eligibility.
Each quarter we publish a new report with the latest industry data. Browse this section to review previous reports and their findings. Each image links to the full report!
- Used EV prices are beginning to decline, albeit, slowly
- Only 12% of used EVs would qualify for a used car tax credit today
- Used plug-in hybrids will dominate tax credit eligibility early in the year
- Market data suggests that 2017 and older model year EVs are most likely to be eligible for used EV tax credits in 2023
Q3 2022 Report
According to our inventory data, derived from over 50,000 car dealers, roughly one third of the estimated 158,689 total EV sales in Q1 2022 were used cars – official Q2 numbers are still pending. In fact, after new Tesla sales, used EVs make up the second largest portion of EV purchases.
Some other quick stats before we dive into the theme of the quarter:
- The average price of used EVs in July 2022 was $40,714, well above the newly proposed $25,000 used EV tax credit limit.
- 17.9% of used EV sales in the past 90 days were under $25,000.
- The average minimum listing price for used EVs that Recurrent tracks (including lots of like-new 2022 "used" cars) is $29,400.
Read more about the Rise of the Used EV.
Q2 2022 Report
- Higher used EV prices are the new normal
- The rise of the "new" used car
- Chevy Bolt battery replacements prove that calendar age matters
- The Tesla Model 3 takeover is here
Q1 2022 Report
- It’s still a seller’s market for used EVs
- Used EV prices are continuing to rise
- Used EV prices still higher than used ICE prices
- New Tesla price hikes in 2021 are causing used Tesla prices to soar
- People are talking a lot about Tesla battery replacements
Q3 2021 Report
- Compares climbing used EV prices to all used cars
- Revisits the state of the used EV market six months after our first report
- Determines the percent of used EV values below an important $25,000 price point
- Monitors a significant contraction in used EV inventory by state
In July, both Recurrent sales data and national analyses suggested that used car prices were starting to level off. The past two months of price data is further evidence that the market has stabilized. For used EVs, we saw a 2.32% price increase in from July to August, and a 0.39% increase going into September. Meanwhile, the overall used car price index saw a decline of 1.5% from August to September, meaning that used EVs pricing outpaced the used combustion engine market. We will continue to track this trend after this year of anomalous pricing.
Despite the used car market leveling off, the ongoing semiconductor shortage is still affecting US automakers. Last week, GM announced that most US production would pause after Labor Day, and many other auto manufacturers foresee temporary layoffs and production slow downs. This suggests that although used EV prices may have stabilized, they will not go back down to pre-summer levels anytime soon. An EV can require ten times more semiconductors than an ICE car, so expect electric inventory to remain limited as buyers looking for new EVs compete with buyers in the used markets.
Our methodology to calculate the used EV price index is to use a representative sample of popular vehicles and compare national averages for retail prices. The models we included in our bundle are: 2017 BMW i3, Chevy Bolt, Tesla Model S; 2018 BMW 530e, Honda Clarity, 2018 Nissan LEAF; 2019 Audi e-tron, Tesla Model 3, VW e-Golf.
In March, Recurrent released its first used EV buying guide to highlight the growth of the market and report on trends that were not being covered by other automotive sources. Six months later, we have seen meteoric price increases, drastic inventory contractions, and a shift in what model years are most popular in inventory.
As of September 2021, over 48% of all used EVs in the US are under $25,000 and nearly 30% are under $20,000. The $20-$25K price range is the target for auto manufacturers looking to produce a mass market EV to win over everyday, budget-conscious drivers, as rumors of a Tesla Model 2 or Volkswagen ID.2 suggest. New EVs available for around $25K will inject the used market with a supply of reliable electric cars priced around $10-$15K in a few years, and attract new drivers to the electric market.
As reported in March, there had been an almost 50% increase in used EV inventory since summer 2020. However, since that report, the inventory number has dropped 21% despite a modest increase in the last 2 months. Supply has dropped at least 35% in top EV states since March. Both Oregon and Virginia lost over 63% of their inventory in six months. The only state that remained near constant was Tennessee, losing only a handful of total inventory since March. These numbers are consistent with the overall used car market, which saw unprecedented low inventory this summer.
Refreshing the used EV stock has been incredibly difficult with inventory shortages around the country, and dealerships are struggling to find cars to sell. This inventory shortage has several causes.
In part, it is due to the global semiconductor shortage, which is causing significant production delays in new cars. That has pushed shoppers to consider the used market. Since EVs require ten times the number of semiconductors as ICE cars, this is a strong effect in the used EV market.
Secondly, the market is still reeling from the pandemic: dealerships that initially scaled down their supply or offered deep discounts to move cars off their lots are now scrambling to replenish a fleeting inventory that is not being filled by rental car sellers or fleet vehicle turnover.
We can expect inventory to remain very tight through the end of 2021.
August 2021 Report
- Who sells the most used Teslas? The answer would depend on which model you’re interested in.
- How have the ongoing Chevy Bolt recalls impacted the market for used Bolts?
- How do lease rates for new EVs impact the availability of used EVs?
July 2021 Report
- Used electric car retail prices in June continued to climb, but at a slightly slower pace, which could indicate the beginning of a market equilibrium being reached.
- We looked at different brands to determine the most popular EV by state. Overall, Tesla continues to be the most popular used electric car brand, with 26% of the used market nationally.
- The Chevy Bolt and Tesla Model 3 are two of the most popular all-electric vehicles on the road today. We did a Bolt vs Model 3 comparison to learn how their individual battery is aging across makes, models, years and climates.
June 2021 Report
- Chevy Volt has found its way to the top of the used electric list by selling more than any other EV model. Combined with new Bolt sales in 2021, GM is having a very big year. Although there could be a surge in Model 3 inventory soon.
- Used EV prices are still climbing. We recorded another 9% increase in average prices over the last 30 days.
- Used Teslas sell faster than any other used EV. We reviewed the number of vehicle sales for various brands compared to the number in dealer inventory to arrive at a relative proxy of used car turnover. Tesla is way ahead.
May 2021 Report
- Used EV prices have been soaring by $1000’s over the last few months -- driven up by high demand and the same chip shortages that are hindering the new vehicle market.
- There’s incredible price volatility from state to state. We’re seeing $3000 - $6000 price differences for the same vehicles across state lines.
- The used Tesla ecosystem is such a big part of the overall used EV market that it makes sense to look at how that’s evolving. Tesla.com itself is a player, but it only represents 7% of the used Tesla inventory, a far cry from its complete control of new Tesla sales.
State by State Pricing Shows Huge Variability for Popular EV Models
Like many things, used EV prices vary from state to state. There isn’t a hard and fast rule about where EVs are more expensive, including the biggest EV states like California, but there is a very wide range in the prices for popular models state to state. It’s common to see a $5,000 spread between the least and most expensive states.
Drilling into the Used Tesla Market: Lots of Choices
Does the direct-to-consumer sales model hold for pre-owned Teslas? We found that only 7% of today’s used Tesla listings are on tesla.com.
April 2021 Report
- From last month, the overall trend in the used EV market is a decrease in inventory - in particular, GMs, Teslas, and Fiats are being bought up faster than their stock can be replenished. Dealerships across the country are noting inventory shortages on used vehicles in general -- as an indirect result of slower-than-expected new vehicle manufacturing.
- Despite these recent decreases, March inventory is still 37% higher than July 2020 signaling increased interest in used EVs.
- 2018 models have now surpassed 2017 models as the most popular used EVs on the market.
BMW Leads Used EV Market
Last month, we saw Teslas hold their place as the most common used EV on the market. However, the used stock of almost all EVs decreased through March - except for BMW. Perhaps it’s anticipation for the forthcoming i4, or delivery of new i3s, but there has been an increase in the availability of used 530e’s, 330e’s, and the X5 - xDrive40e. If you’ve been keeping your eye on one of these models, it may be a good time to check prices, as the average has dipped slightly in the past month. Used i3’s, on the other hand, continue to retain their value and even showed slight price increases, with 2018s being the best represented year in the market and 2017s at their heels.
Examining Cost per EPA Range Mile
One way to look at used EV prices is by comparing cost per range mile using EPA estimated range. One thing to keep in mind is that EPA range specifies how far your EV will go when the battery is new. EV batteries degrade based on age, how they have been driven, and how they have been stored. To really understand the value of an EV, it is critical to understand the battery in its current state, after several summers in the driveway or several hundred charging cycles.
March 2021 Report
Seasonality exists in used car sales and due to COVID-related economic changes, but this trend is real. Used car sales follow a predictable time delay, peaking at 3-4 years after being sold new. This pattern exists in electric vehicles as well: Six months ago, the most common model year for sale in used EVs was 2017 by far. Now, there are nearly as many 2018 model year used EVs for sale as 2017’s.
The Most Popular Used Electric Cars in March
- Used Tesla Model S, Model 3 and Model X are a large and growing part of the used electric market.
- BMW EVs are a surprisingly strong part of used EV inventories, but it’s not the i3’s that are growing in supply. Instead, there’s been a surge of the availability of BMW’s plug-in hybrids (5-Series 550e, 3-series 330e and the X5 xDrive40e) in the last 6 months.
- Despite the Nissan Leaf being one of the most recognizable EVs on the road for years, it’s only the 4th most popular used EV for sale today.
How do older EV batteries hold up?
EV owners and shoppers perceive that EV batteries last just seven years (Cox Automotive study), but the reality is generally better. A lot of factors play into the battery life of each EV over its life, including manufacturing variances, pack layouts and cooling systems, calendar age, use, temperature history, charging behavior. In our data analysis of 1000’s of EVs on the road, we’ve found that odometer reading alone isn’t particularly helpful in understanding each vehicle’s battery life.
Learn about or read more from Liz Najman