Most reporting on the electric vehicle (EV) market focuses on new cars, the primary source of EV growth. That discussion, however, is becoming more nuanced as used EVs represent a more substantial portion of overall EV adoption in the US.
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.
The rise of used EVs
Bloomberg recently reported that the US has hit a tipping point in EV sales by reaching 5% of new car sales. With unstable and high gas prices, plus talks about inflation and recession, Recurrent is seeing record levels of interest in used EVs, making our theme for this quarter the clear and quantifiable maturation of the used EV market.
Carbuyer interest in used EVs is relatively new. In the summer of 2021, Recurrent surveys found that just over 50% of EV shoppers would be interested in purchasing a used electric car while, a year later in the summer of 2022, an updated survey put that number closer to 80%.
As the demand for used electric cars grows, here are the key trends for the rest of the year. While occasionally interconnected, each is also a fascinating story by itself.
Unavailability of new EVs is driving used EV demand (and prices)
This summer a Consumer Reports study found that 14% of American drivers say they would “definitely” buy or lease a battery-electric vehicle today – more than three times the 4% who said the same in 2020. The question now is not if they want an EV, but rather how to find one.
The inaccessibility of semiconductors and battery parts has had significant economic ramifications for the auto industry. While many car companies are trying to shorten the supply line by bringing some of the manufacturing process closer to home, it will be a few years until new facilities can fully meet the needs.
In the meantime, long waitlists for popular EV models leave many new car shoppers looking at the second hand market. These shoppers are willing to pay for a new EV, so their price point tends to be higher than other used car shoppers. This trend in particular drives up demand for used cars in “like new” condition – and shoots up prices across the board. You can see in our used EV pricing chart below, the highest increase is for a 2022 Ford Mustang Mach-E.
Recurrent calculates price trends using a fixed bundle of used EVs so we can compare the same models each month. Our bundle price includes these vehicles and model years.
- 2017: BMW i3, Chevrolet Bolt, and Tesla Model S;
- 2018: Nissan LEAF, BMW 530e, and Honda Clarity;
- 2019: Audi e-tron, Tesla Model 3, and Volkswagen e-golf
A new indicator of wild growth in the used EV market is that price increases for used EVs are now beating the consumer price index increases for all cars. While the Bureau of Labor Statistics tracked a 16.1% price increase in all used cars from May 2021 to May 2022, the price increase in the Recurrent bundle rose 18%. From June 2021 to June 2022, all used cars rose 7.1%, compared to 9.7% for used EVs.
We don’t know if these price increases are primarily due to outsized demand for EVs or indicate that EVs hold their value better than traditional gas cars – it all depends on how long this trend persists. However, with perks such as over-the-air updates and far less mechanical wear, we may see that EVs depreciate less than their combustion cousins.
Low depreciation is certainly a short term side effect of demand and price inflation. Cars are actually increasing in value after being owned for six months or a year. This has led to car flipping, and a glut of “like new” used cars that are available to meet the demand of impatient new EV shoppers.
Price hikes in new cars give rise to “car flipping”
For the reasons above, there is new pressure on the used car market to supply EVs – the newer, the better. Normally, you would expect the used market to be predominantly models that are 3-4 years old, meaning that 2018 and 2019 models should be the bulk of what’s for sale.
Starting late last year, 2021 model year owners found that they could resell their relatively new EV for much more than they paid, “flipping” their car in the same way people flip houses. People who are savvy at predicting market trends bought up new vehicles then resold them with barely any miles. The first new-car buyers get the tax incentives and financing deals, but the second-hand shoppers get the car today, ahead of the long waitlists. This practice became so popular this past winter that in some months, there were more 2021 models in the used market than 2019’s, and a growing percentage of 2022 model years in used inventory.
Tesla is an interesting example because the price of a new model has increased so much last year that it created built-in inflation in used prices. Add extremely long waiting periods for new vehicles, and the value of used cars skyrocketed. For example, the MSRP for a base trim Tesla Model 3 in April 2021 was $39,000. If you were lucky enough to have bought one back then, you would have seen the value of your car appreciate between $10,000 and $16,000 in one year, with a $19,000 increase as of July 2022.
Another car that has seen incredible price increases is the 2022 Ford Mustang Mach-E. The second hand price is now over $70,000, up 28% from January 2022. The top tier MSRP for a new 2022 GT trim was less than this – $66,000 – and was eligible for the $7,500 federal tax credit. That means someone who bought a new Mach-E in late 2021 could have resold it for a profit of $10,000 to $20,000 in a matter of months.
For further evidence that car flippers are having a great year, look at actual selling prices for the Rivian R1T Launch Edition below. As a reminder, the MSRP for the Launch Edition was between $73,000 and $95,000, depending on when you reserved it and its add-ons.
However, it seems like car manufacturers are getting wise to this practice and are cracking down. Ford has a one-year “no resale” clause on its F-150 Lightning, supposedly prompted by their dealerships. Similarly, Tesla reserves the right to cancel any order that the carmaker believes will be resold. Both companies have also ended their lease buyout programs, although with Ford, it is just for electric cars.
Americans want big cars regardless of fuel type
Even if you’re not intentionally flipping a car, the lease term for most vehicles is 36 months, and most new cars are sold every 3-4 years. EVs from 2018 and 2019 are second generation models with robust batteries, amenities beyond environmentalism, and used ranges that exceed 200 miles. However, drivers aren’t as excited about these available used EVs as they are about the wave of electric SUVs and trucks.
Look at the general auto trends in the country: the best selling models are overwhelmingly trucks and SUVs, which make up 80% of the top ten list. The Ford F-150 has been at the top selling car for over 40 years, but it took until 2022 to electrify it. Similarly, the Tesla Model Y, which is a crossover SUV, is now the best selling EV. It was first released in 2020, but it has been increasingly found in used EV inventory over the past months as demand soars. We’ve reported before on the Model 3 takeover - is the Model Y next?
In fact, the preorder numbers that we are seeing for trucks and SUVs in America eclipse the lifetime sales figures for many older EV models. For instance, more people have preordered the Ford F-150 than all LEAFs ever sold in the US. In the chart below, we show comparisons between cumulative sales numbers for popular EVs through 2021, versus single year sales of the Model Y in 2021 and EV truck preorders.
For more context, here are the top 5 best selling cars in the US in 2021:
- Ford F-Series: 726,004
- Dodge Ram: 569,388
- Chevy Silverado: 529,765
- Toyota RAV4: 407,739
- Honda CR-V: 361,271
Right now, the limiting factor in sales figures for EVs with popular body styles - e.g. Model Y, RAV4 Prime, Mach-E - is supply. While automakers will inevitably increase production to meet demand, it will likely take years. And in the meantime, reservations offer a new way for auto manufacturers to gauge interest in upcoming vehicles.
Reservation system shows the gap between supply and demand
During the beginning of the pandemic, auto production and new vehicle orders were suspended as everyone braced for car shopping to halt. Instead, consumer demand for cars rebounded faster than expected. Dealerships no longer had vehicle inventory on their lots, and shoppers had to order their cars from manufacturers. However, the unexpected demand for new EVs has left many companies with wait times of a year or more.
For instance, the wait times for some popular models are below:
What should you do if you really want your new EV now? First off, look at the used inventory – you may be able to find a great car, even if it’s an older model or not the SUV you were hoping to own. Secondly, being flexible about trim level, color, and accessories might bump you up in the line. Our own Andrew Garberson recently got his Rivian R1T a year earlier than expected.
"My Rivian R1T delivery was scheduled for Fall 2023. In May, I was told that because of the vehicle options that I selected, which matched perfectly with their production priorities, my R1T would be ready much sooner. The new truck was in my driveway less than a month later, and more than a year earlier than expected."
Buy now or wait?
What do all these trends mean? EV prices won’t drop anytime soon, and it can take at least 18 months until production backlogs are cleared and new facilities have come online. So, if you’re waiting in line for the EV of your dreams, or ready to make the switch, there may not be a better time in the near future. With interest rates increasing – including manufacturer lease program rates – your money may go further today. Restrictions on lease buyouts and vehicle resale also mean that the supply of secondhand EVs will be further restricted in coming years. But, the good news is that this ongoing supply crunch will ensure the EV you get today will hold its value long enough to sell or trade it in, especially if you take care of the battery.
About Recurrent and this report
We partner with Marketcheck, a vehicle inventory data provider, to provide this insight into the pre-owned EV market. Our analysis is updated each quarter.
Recurrent offers wellness reports to EV owners, condition reports for EV buyers, and bulk reports for EV sellers. The team of battery scientists also produces a variety of other educational resources.
If you are new to owning an electric car, check out the EV range and battery degradation e-book that we created as an introduction.
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!
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.
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.
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.