Used EVs selling faster than petrol car alternatives as prices plummet

Daily Mail​

4 days ago

Used car buyers have been taking advantage of plunging electric vehicle prices and snapping up second-hand examples in record time, according to a new report. In July, a used EV is claimed to be selling on Auto Trader in an average of 28 days after first being advertised - that's a day quicker than the market average across all fuel types and four days faster than EVs were shifted a year ago. The online sales platform says interest in second-hand EVs has accelerated in the last week - since the Government announced the reintroduction of an Electric Car Grant (ECG) to discount the price of some new models.
With used electric vehicle prices already tumbling as a direct result of manufacturer-driven discounts, the arrival of a taxpayer-funded scheme that further subsidises some new EVs will push second-hand prices even lower, experts have suggested . And there's one premium EV in particular that's now selling in just over a fortnight as prices have tumbled to be on par with - if not cheaper than - petrol equivalents. Tesla Model 3s between three and five years old are currently the fastest-selling used car, taking just 17 days to move on in July. That's almost two weeks faster than the average used car.
A 2021 Model 3 with between 35,000 and 40,000 miles on the clock can be had on Auto Trader for less than £16,000 today. For its biggest petrol-powered equivalent, the BMW 3 Series, the cheapest petrol engined example of the same age and mileage is £22,000 or more. Underlining the huge crash in value of pre-owned EVs, three-to-five-year-old Jaguar I-Pace SUVs are the second quickest-selling motors of the month, taking just 18 days to find a buyer on average. The I-Pace, which has been subject to mainstream media criticism due to links to a number of high-profile accidents , has depreciated at such a rate that below-average-mileage are changing hands for around £14,000.
It means you can pick up what was originally a £70,000 luxury motor for around the same price as a petrol supermini of the same age. Auto Trader believes the surge in consumer appetite for second-hand EVs has been fuelled, in part, by the government's ECG. It will soon be applied to some sub-£37,000 new models - granted they meet specific manufacturing sustainability criteria yet to be outlined by ministers. It says searches for used EVs under the £37k price point doubled within a day of the announcement.
'The used market will be key to unlocking mainstream adoption, and with a clear electric strategy in place, all retailers should be able to capitalise on the broader opportunity the grant offers,' the only marketplace said. Marc Palmer, head of strategy and insight at Auto Trader, added: 'The clear spike in electric vehicle demand this month is encouraging - whenever EVs make headlines, we consistently see a boost in consumer interest not only for new cars, but in the used EV market as well.' Other EVs to make July's list of fastest-selling used motors are the Hyundai Kona EV and Volkswagen ID.3. Again, this is based on examples between three and five years old.
They are selling in 20 and 21 days respectively. Only in-demand petrol-engined compact crossovers including the Nissan Juke and Ford Puma are selling quicker than this. Ian Plummer, the company's commercial director, commented: 'Pricing data shows a significant gap between new EVs and two–to-three-year-old cars as market forces have caused used EVs to match petrol and diesel alternatives to attract buyers. 'While the Electric Car Grant may boost new EV sales, used EVs remain appealing due to their affordability and it's unlikely the grant will either heavily or immediately impact used EV pricing and residual values.
'It was encouraging to see a strong surge of interest in new EVs on Auto Trader immediately post the grant launch, and some of this positivity also flowed into used EVs, as we know the majority of those considering electric will shop both new and used cars.' As for the slowest-selling used motors, no EVs made the top 10 order. The most sluggish of all is something of a shock - the Volkswagen Polo, a supermini that's traditionally very popular in Britain. Year-old examples, which are holding their value well and therefore appear pricey against other options, are taking an average of 50 days - almost two months - to move on, Auto Trader said.
Shortly after Transport Secretary Heidi Alexander last Monday unveiled Labour's new ECG, industry experts claim it will be a major drain on public spending that will cause used EV prices to plummet. Philip Nothard, insight director at analysts Cox Automotive told us: 'Heavy discounts on new EVs have already dampened demand for nearly new models available in the used car market. 'While driving down the cost of new vehicles will undoubtedly increase the EV adoption in the new market, these incentives fail to recognise the impact they will have on the used market.' Nothard says the grant now threatens to increase depreciation of electric cars up to two years old.
'The used market is a crucial source of profitability for the automotive sector, so the strength and consistency of the industry is crucial to the success of the government's net zero ambitions,' he said. 'To ensure this, the government needs to consider more support for the used EV sector to put the brakes on the rapid pace of depreciation.' British Vehicle Rental and Leasing Association chief executive Toby Poston also warned that further stimulating new EV registrations without supporting the used market 'risks creating an even greater supply-and-demand imbalance, putting even more pressure on fast deflating second-hand values'.
What is the Electric Car Grant?
The Electric Car Grant is the Government's new big hope to drive sales of EVs in the run-up to the end of the decade as it continues to steer towards outlawing the availability of new petrol and diesel cars from 2030. It arrives three years after the previous Tory administration prematurely scrapped its Plug-in Car Grant (PiCG) . Transport Secretary Heidi Alexander confirmed the ECG's availability on Monday 15 July, stating: 'The EV grant will not only allow people to keep more of their hard-earned money - it'll help our automotive sector seize one of the biggest opportunities of the 21st century.' Only cars up to £37,000 qualify for the grant, which rules out premium models, including every Tesla on sale. No Audi, BMW or Mercedes EV will be eligible either.
Some 50 existing models are technically eligible for the grants solely based on their starting price. We've listed these below. Manufacturers must apply to be eligible for the scheme with their sub-£37,000 cars on a 'first come, first served' basis. This means that motorists will not need to fill in any additional paperwork to receive the grant, with all administration handled by the car maker, dealership, and the Government. But because manufacturers must apply for the scheme, the Department for Transport has told us that we are unlikely to see an initial list of eligible EVs until the first two weeks of August.
The new scheme uses a two-tier system based on 'sustainability criteria' to determine the size of the subsidy provided. Only the greenest models - considered 'band one' - receiving the full £3,750 amount. Band two cars with a lower eco rating will be eligible for a reduced amount as low as £1,500. Bands are determined by each maker's Science-Based Target (SBT) - an industry-wide scheme, with manufacturers needing to meet carbon scores below a specific criterion to achieve the highest green standard. Volkswagen and Renault Group have both confirmed they are signed up with the SBT scheme.
ECG bands - which could later expand beyond two tiers - will be determined by how much CO2 is emitted in an EV's production, assessing the energy used during assembly as well as battery manufacturing. An overall SBT score is weighted 70 per cent for the CO2 produced during battery manufacturing and 30 per cent for vehicle assembly emissions. Threshold levels to achieve the full £3,750 discount or the lower banded £1,500 have yet to be made public. However, vehicles that don't meet a minimum level will not receive a grant at all. This could be bad news for Chinese EV makers , which currently offer some of the most competitive prices but could fall foul of the emissions-based rules.
Speaking on the BBC's Today programme last week, Transport Minister Lilian Greenwood said she did not expect any cars that are produced in China to be eligible. 'The grant is restricted to those manufacturers that reach minimum environmental standards,' she said. 'And, frankly, if you generate a lot of the electricity that powers your factory through coal power stations, then you are not going to be able to access this grant.' According to The Telegraph, the Chinese embassy has hit hack and the scheme's stringent requirements.
It has called on the UK to follow World Trade Organisation (WTO) rules and create a 'non-discriminatory environment for investment'. WTO rules stipulate that members must not give favourable treatment to one country over another when it comes to trading goods and services. An embassy spokesperson added: 'The Chinese side is closely following the situation and will resolutely safeguard the legitimate rights and interests of Chinese companies.'