The used electric vehicle (EV) market is making a comeback, with prices on the rise after a three-year decline. This shift is an intriguing development, especially considering the broader context of the used car market's resilience.
The EV Rebound
In June, used EV prices saw a 1.6% increase year-on-year, reaching an average of £24,662. This marks the first annual growth since December 2022, following a period of stabilization in May. What's more, used EVs are selling faster than the overall used car market, with an average time on the market of 25 days, a week quicker than last year.
The rebound is attributed to a combination of sustained buyer appetite and tightening supply. Interestingly, the strongest price growth is seen in used EVs aged three to five years, with prices rising 8.9% year-on-year. This segment also has the fastest sell-through rate, highlighting an opportunity for retailers to capitalize on this demand.
Older Cars: Still in Demand
It's not just the younger used EVs that are performing well. Older cars, aged 10 to 15 years, are also experiencing strong price growth, with average prices up 7.8% year-on-year. This segment, along with cars over 15 years old, is benefiting from constrained supply and affordability pressures, which are driving demand for older vehicles.
A Shift in Buyer Preferences
The data suggests a shift in buyer behavior, with those in the £15,000 to £18,000 budget range opting for slightly older premium cars instead of newer volume models. This trend is a result of the long-tail effects of pandemic-era supply disruptions, which are now impacting the availability of traditional high-volume models in the five to seven-year-old cohort.
The Need for Precision
For retailers, this market dynamic presents a unique challenge and opportunity. It's not just about having EV stock, but having the right EV stock, priced accurately, and marketed confidently. As Marc Palmer from Autotrader highlights, "pricing discipline matters" in this market, where demand, supply, and values vary across segments. Retailers need to understand the nuances of age, brand, fuel type, and affordability to identify the strongest stock opportunities.
A Resilient Market
Despite the summer heatwave and the World Cup, the used car market, including EVs, remains resilient. Serious buyers are still transacting, and the market is characterized by stable transactions, resilient pricing, and a consistent speed of sale. This resilience is a testament to the underlying strength of the market and the ongoing shift towards electric vehicles.
Final Thoughts
The turnaround in used EV prices is a fascinating development, especially considering the broader context of the used car market. It highlights the importance of understanding market dynamics and adapting to changing consumer preferences. As the EV market continues to evolve, it will be interesting to see how retailers navigate these shifts and whether the current trends hold steady.
