The cost of used electric vehicles is declining along with the total cost of cars.
According to Kelley Blue Book, which is a good indicator of used car prices, the average transaction price for new cars in the United States in January 2023 was $47,401, which was 2.6% less than in December 2023 and 3.5% less than in January 2023. For the cost of new electric vehicles, it’s more pronounced. According to KBB, the average cost of a new electric vehicle was $55,353 in January 2024, a 10.8% annual decrease.
Cause and effect: As a result, used EV prices are shaped, contributing to the increasing market of vehicles entering dealer showrooms. Lead researcher at Recurrent, Liz Najman, sent me an email in February stating that “year over year, used EV prices have fallen 24%, with Teslas losing the most value in that period.” “Just based on the last several months, Tesla’s values have continued to decline more quickly than the industry average and more quickly than many of their rivals, including Ford, Nissan, Chevy, and VW,” Najman stated.
According to Recurrent, the companies with the largest price reductions year over year are Tesla, Audi, and Jaguar. This comprises the Tesla Model X, Model Y, Audi e-tron (non-sportback), Jaguar IPACE, Model 3 Tesla, and Model S Audi e-tron Sportback. The Tesla Model 3, Tesla Model Y, Hyundai IONIQ 5, and Kia EV6 have all seen price reductions since January. Model Ys are priced from under $30,000 on Tesla’s secondhand car website. Additionally, Hertz is clearing out its Model 3 inventory, with prices beginning well under $20,000.
The stark illustration of the Chevy Bolt price drop is: According to Najman, the cost of a used Chevy Bolt, which was last year’s third-best-selling new electric vehicle in the United States after the Model Y and Model 3, has decreased by 30% year over year. Building on Recurrent’s data, I can attest to having personally witnessed this price collapse. I received an offer of about $28,000 when I brought my 2021 Bolt to CarMax in Los Angeles in September 2022. CarMax made me an offer in February of this year for $14,000. a massive 50% reduction in cost.And even though it’s practically brand new with only a few hundred miles on the odometer, a friend who paid $38,950 for a new 2023 Chevy Bolt EUV Premier Redline in January has already seen the price drop to between $23,500 and $25,500 for a private party sale (and $21,000 for a trade-in). Furthermore, the Bolt is by no means the first EV to experience this kind of price reduction.
Keep in mind that the $7,500 point-of-sale tax credit, which is essentially a rebate, will be available to new EVs in the United States starting in 2024 and could account for a portion of the rapid depreciation. For instance, the $7,500 credit was given to the Chevy Bolt EUV mentioned before. That was after taxes and fees (that is, after deducting $7,5000 off the $38,950 sticker price in addition to around $5,000 in taxes and fees and for optional equipment included with the car). Having said that, I never received the credit for the Chevy Bolt I bought in 2021. However, the new EV credit appears to have some effect on used EV pricing overall.
Are price reductions at last stabilising? But according to Recurrent’s Najman, used EV prices are starting to level off. According to Najman, the average decline in all brands from January to February was 2.5%, which was less than the 2.9% decline from December to January.
The used EV tax credit should not be overlooked if you’re shopping: According to the IRS, you are possibly eligible for a credit of up to $4,000 when you purchase a certified used electric or fuel cell vehicle from a licenced dealer for $25,000 or less. The credit is equivalent to 30% of the sale price. That would potentially reduce the cost of a used Chevy Bolt, which now retails for $16,000, to about $12,000. For example, Hertz is now selling a $20,000 Tesla Model 3 for about $16,000.
