Wholesale Used Vehicle Prices Drop 9 Percent, EVs Show Most Decline

A seller shows the dashboard of the Tesla Model S car at the electric carmaker Tesla showroom of El Corte Ingles store in Lisbon, on Sept. 1, 2017. Patricia De Melo Moreira/AFP via Getty Images

The prices of used electric vehicles are plunging at a faster pace than their gas counterparts amid an overall decline in wholesale used car prices, according to a recent analysis by Cox Automotive.

The Manheim Used Vehicle Value Index, an indicator of pricing trends in the used vehicle market, declined by 8.9 percent in June from a year prior, says a July 9 Cox press release.

Electric vehicles (EVs) showed the biggest fall with a 16.6 percent price decline while gas-powered vehicles registered a 9.5 percent fall. In terms of the type of vehicles, compact cars had the biggest decline, followed by midsize cars, luxury, SUVs/CUVs, and then pickups.

“Wholesale value declines have been stronger than we normally see for much of the last two months,” said Jeremy Robb, senior director of Economic and Industry Insights at Cox Automotive.

“Sales conversion is currently running several points above the previous three years, including 2021, indicating that buyer demand is relatively strong despite all the uncertainty in the market.”

Despite falling prices of used EVs, the overall EV market value in the United States is projected to increase in the coming years, according to a report by Fortune Business Insights.

The report estimates the EV market to rise in value by over 25 percent annually to $137.43 billion in 2028 from $28.24 billion in 2021.

“Promotion activities and government policies are helping to overcome prevailing consumer barriers related to vehicle range, higher upfront costs, insufficient model availability, and lack of awareness,“ the report said. ”These factors will influence the U.S. electric vehicle market forecast.”

Meanwhile, a June 10 report from car search engine iSeeCars confirmed the trends shown by the Manheim Used Vehicle Value Index indicator, finding that used EV values were falling at a “much faster” pace compared to the average used gas car.

The used EV price declined by 29.5 percent in May 2024 compared to a year prior, it said. In contrast, the price decline for the used gas car was 6.1 percent.

Used EVs were costlier than used gas vehicles last year. However, the situation has now reversed, with the price of the former now trailing the latter by 8.3 percent.

Out of the top 10 used car models that saw the biggest decline in prices, eight were electric vehicles, with the top seven being EVs. The Jaguar I-PACE saw the largest decline, followed by Chevrolet Bolt EV, Hyundai Kona Electric, and Kia Niro EV.

Of the 10 used cars that went up in value, none were electric. Porsche’s 718 Cayman topped the list, followed by the Genesis G90 and Porsche 718 Boxster.

“There’s no denying the crash in used electric vehicle values over the past year,” said Karl Brauer, executive analyst at iSeeCars. “We’ve watched EVs prices fall between 30 and 40 percent since June of last year, while the average gas car’s price has dropped by just 3 to 7 percent in that same timeframe.”

“It’s clear used car shoppers will no longer pay a premium for electric vehicles and, in fact, consider electric powertrains a detractor, making them less desirable—and less valuable—than traditional models.”

Mr. Brauer noted that there have been numerous EVs entering the new vehicle market in recent years and have overflowed into the used car market and created an oversupply. As a result, he believes used EV prices will likely keep declining unless there is a catalyst to increase demand.

EV Ownership and Demand in America

The fall in used EV car prices comes as interest in buying electric vehicles has tapered off among Americans despite more of these vehicles selling in the country.

An April 8 Gallup poll found that while EV ownership has ticked up, fewer non-EV owners were interested in buying these vehicles.

Among the respondents, 7 percent said they currently owned an EV, up from 4 percent last year.

However, the percentage of people who would “seriously” or “might” consider buying an EV fell during this period. Moreover, the share of people who “would not buy” increased.

Data from Cox Automotive shows that a “record” 1.2 million electric vehicles were sold in the United States last year. The share of EVs in the total vehicle market increased last year from the previous year, showing expanding adoption.

While Cox expects EV growth to continue to slow down, it forecasts more growth in the market. “The momentum is there and is not going away.”

A recent consumer survey by the American Automobile Association (AAA) reached similar conclusions to the Gallup poll—interest in buying EVs is declining among Americans.

The survey found that the high cost of EVs, lack of convenient charging options, and anxiety about vehicle range were the key reasons prospective buyers were hesitant to choose EVs. Three out of 10 respondents also pointed out that they won’t be able to install a charging station where they live.

“Early adopters who wanted an EV already have one,” said Greg Brannon, director of automotive research at AAA.

“The remaining group of people who have yet to adopt EVs consider the practicality, cost, convenience, and ownership experience, and for some, those are big enough hurdles to keep them from making the jump to fully electric.”