When the MG dealer told Richard Hilder his new MG 4 EV had finally arrived after six months of waiting, the Derby-based business manager was elated. But then came the shock: a day later, the dealer phoned again to say his Citroën ë-C4 was no longer worth £20,900 but £16,000, so could he please find a £2000 up-front deposit and accept another £36 per month on his four-year PCP deal?
“Having waited for six months and genuinely looked forward to the car, it was like being slapped round the face then punched in the gut,” Hilder told Autocar.
He's one of the many victims of a huge crash in the value of used electric cars in the UK. Just how huge is revealed by data from pricing expert Cap HPI, which has recorded an 18% decline in EV values in the last 12 months.
The worst of the decline happened in the past six months, following a spike in values in September.
”It wasn't out of the norm to see used cars consistently selling above the cost-new price," said Chris Plumb, senior valuations editor at Cap HPI. “This was always going to be unsustainable.”
As car makers started unblocking the production pipeline that had been gummed up by a lack of parts and new cars started returning, suddenly dealers were taking in a load more trade-ins, including EVs.
Since September, values have fallen 20%. Compare that with a normal period, when Cap HPI would expect to see used car values to fall between 3-5% over double the timeframe.
Over the same 12-month period, values of diesel, petrol, hybrid and plug-in hybrid cars actually rose, and all four categories recorded some of their biggest rises in the last few weeks. So clearly this is an EV-only issue.
The problem is that EVs were prioritised by car makers during the parts crisis and in the months beforehand, partly because they were launching new models and partly because they needed the sales to ensure they didn’t get clobbered by tougher average CO2 emissions regulations both in the European Union and the UK.
“EV demand remains buoyant, but unlike [with] ICE counterparts, where supply is trickling through, the EV floodgates have been opened, resulting in a tsunami of used stock entering the market,” said Richard Walker, director of insights at Auto Trader.
The used car specialist has reported that the number of used EVs available to buy in February was up 260% on the same month the year before, while used ICE cars were down 20%.
Values could fall further, while the excess number of used EVs remain a slug on dealer forecourts. EVs on average were the slowest-selling fuel type in February, recent Auto Trader data shows, taking an average of 45 days to be sold.
“There’s a massive issue of supply of used EVs,” Robert Forrester, CEO of dealer group Vertu, told Zeus Capital in a recent interview.
It’s a tricky time for EVs. Electricity prices have remained stubbornly high, while pump prices for petrol and diesel have come down, eroding the EV cost advantage. Fears around the fragility of the long-distance charging network also abound.
“Some people have decided [EVs are] not for them, and that’s compounding what was always going to be a greater level of supply,” Forrester said.
Of course, values are also dependent on what happens to new-car prices. Tesla’s very public cutting of its prices by up to £8000 in January will have affected used prices, even though no one else followed suit, at least in the UK.
The picture is smudged when you look at exactly which cars are being affected.
“There are very big differences by brand,” Forrester said. “It’s a very complicated moving feast.”
Auto Trader's data shows that while some EVs are hanging about (the Audi Q4 E-tron was the slowest-selling car outright in February, at an average of 88 days on the forecourt), others are shifting faster. The Tesla Model Y was the eighth-fastest selling of all used cars, staying on average just 12 days on the forecourt and beating the hybrid Toyota RAV4. The fastest seller of all was the Kia Sportage PHEV. Three of the 10 fastest-selling EVs were MGs, while the fifth slowest-selling of all cars was the electric Volkswagen ID 4.
The Mini Electric was one of the top 10 worst forecourt lingerers, to the point that the EVs are now on parity with the petrol versions. The same goes for the Renault Zoe and the Renault Clio. This is going to turn buyers’ heads, particularly when you compare the normally higher kit levels that EVs typically offer with those of ICE equivalents.
“There are some green shoots starting to appear, with a number of retailers starting to buy EVs again,” said Plumb.
Retailers may have no choice but to sell EVs, given the lack of used stock now, caused by a drop of almost two million in the number of new cars sold over the past three years.
There was some good news too for Hilder after he went back to his MG dealer, Stoneacre, to see if they would budge on the lowball offer made for his ë-C4. They did, agreing to honour the original £425 per month on his PCP and lowering the deposit required by £400 to £1600.
He might have caught the turning point. "They said they think the market will recover,” he said.
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March 24, 2023 at 01:13PM
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Crisis looms as used electric car values plummet - Autocar
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