A crash in prices for second-hand electric cars is over as demand is beginning to outstrip supply, according to marketplace Auto Trader.
The cost of used electric vehicles (EVs) tumbled in the first few months of the year in the wake of a sudden glut of available cars, the company said.
Many new cars bought between 2018 to 2020 were being sold on by owners whose financing schemes had come to an end, leading to second-hand EV prices falling by more than a tenth.
That surge in supply has ended and buyers have now caught up, however, said Nathan Coe, Auto Trader’s chief executive.
He added: “The influx of supply has moderated. And consumer demand has probably caught up a bit with the supply, because that supply came in very, very quickly.”
Second-hand buyers had been slower to adopt EVs since most will not have bought a used battery-powered car before.
It comes as Elon Musk’s Tesla has dropped the price of some of its later models, putting used prices under further pressure. Earlier this year, the price of a basic Model Y was reduced by 6pc to £44,320, while the price of the lowest-spec Model 3 was cut by 6pc to £40,470.
But there are still challenges to be overcome to make EVs an attractive option for the majority of buyers, even though more people are open to buying them, Mr Coe said.
“I think a lot of the hurdles to buying electric vehicles remain unchanged, they are expensive, there’s not enough charging infrastructure, there is no government support for either of those two things and people still have a degree of range anxiety,” he added.
Parts shortages across the car industry, which sent prices of both new and used cars shooting up, have eased in recent months. This has removed some upward pressure on prices and led to expectations that cars may even continue to get cheaper as supplies improve.
Overall, car prices are likely to ease later this year as supply returns, Mr Coe said.
“I think we’re expecting over the course of this year, more new car sales that will lead to more used cars available for sale, but demand is still well above where both those numbers could be,” he added.
“I don’t think people should expect supply to come flooding back this year. It just seems to be gradually getting a little bit better and better.“
Auto Trader said its core marketplace business increased revenues by 9 per cent in the year to 31 March, helping send the group’s operating profit up to £277.6m.
Separately, US-based electric car maker Lucid is set to receive a $3bn boost from investors, largely thanks to its largest shareholder, Saudi Arabia’s Public Investment Fund.
The Saudi sovereign wealth fund will pile $1.8bn (£1.4bn) into the company, helping it overcome a looming cash crunch sparked by recession fears and the price war sparked by Tesla.
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June 01, 2023 at 10:12PM
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Price crash for used electric cars is over, says Auto Trader - The Telegraph
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