- Despite the media attention on the slowing growth of the EV market, many remain bullish on EV sales, both in the new and used segments.
- Many dealers that understand EVs and the EV market have shown an interest in buying wholesale electric vehicles from dealerships that don’t.
- One online company, Plug, was founded to serve as a go-between for automakers with off-lease EVs, fleet operators, rental companies, and auto dealers that are not used to selling used EV trade-ins.
Perhaps the very first rule in the auto dealers’ playbook, now some 125 years old, is that car salespeople must appear optimistic about the economy and continuing high demand for their products no matter the reality. It’s always a good time to buy a new or used car or truck!
Late last year, as analysts and media were overplaying a softening market for electric vehicles, Jimmy Douglas founded Plug, an online company based in Culver City, California, that serves as a go-between for automakers with off-lease EVs, fleet operators, rental companies, and auto dealers that are not used to selling used EV trade-ins.
Plug runs data on wholesale EVs to determine remaining battery life, as well as data on other key technical functions, such as software-enhanced features, autonomy, and assisted driving systems and computer hardware.
“We rejected a car once, for a dead 12-volt battery,” Douglas said. The car was stored for too long at an auction facility, “and nobody had recharged it. If you let your battery pack go down and die, your 12-volt battery gets trashed.”
Plug has never encountered an EV with a faulty high-voltage battery pack, he said. Most of the information required to appraise an electric vehicle is captured through its application programming interface, though Plug also conducts a physical condition inspection using either human inspectors or with an artificial intelligence-assisted photographic process.
Tamaroff Group’s Eric Frehsee.
Douglas’ timing in launching this niche business might seem unfortunate, though he says there are plenty of dealers that understand EVs and the EV market and want to buy wholesale electrics from dealerships that don’t.
“The prices of used EVs have dramatically decreased over the last year,” Douglas said recently in a Zoom interview with auto journalists. “Making money and not losing money is a velocity game.”
“I think dealers are kind of gun shy in buying a used EV,” said Eric Frehsee, president of Tamaroff Group’s six Metro Detroit new car and truck dealerships. But Tamaroff falls in the “does understand” EVs dealerships. Frehsee says early EV adopters continue to trade in for new EVs. The burgeoning variety of plug-in hybrid models are going mostly to straight internal combustion engine-vehicle trade-ins.
“We really haven’t seen anybody go back from straight EVs,” he said.
Despite Tamaroff’s EV acumen, in December Frehsee led a group of 3,882 US dealerships to sign a letter calling on the Biden White House to back down from new Environmental Protection Agency fuel economy standards that would have mandated 60% of new vehicles sold in 2030 be full battery electrics.
That letter worked, somewhat, and in March, the EPA announced a revised standard that would force EV sales of 30% to 50% of the market for the 2030-32 time period.
That remains a steep climb, but most major automakers have claimed they are headed in that direction anyway. The problem is that major automakers have had an aversion to any emissions or fuel economy mandate since Congress enacted the Corporate Average Fuel Economy standard in 1975.
The auto industry probably fears most the political volatility of such standards, and Frehsee believes EPA standards could change again in 2025, depending on the outcome of November’s presidential election.
“My gut reaction is the goalposts are going to continue to be pushed back,” he says.
Even if a second Trump administration puts a stop on the bipartisan infrastructure bill’s building of a recharging network while EV buyer tax credits come to an end, the used electric vehicle market looks to have a bright future—as commuter cars.
“People seem to think they need more range than they really do,” Douglas said. Many of the latest EV models have more than 300 miles range, he said, “but in my experience, most daily use can work for a shorter battery life.”
Douglas’ website is available to auto wholesalers and retailers only, though anyone can subscribe to the “Plug Daily Drop” at the website and keep tabs on used EVs that are about to hit the market.
Share your thoughts in the comments below.
As a kid growing up in Metro Milwaukee, Todd Lassa impressed childhood friends with his ability to identify cars on the street by year, make, and model. But when American automakers put an end to yearly sheetmetal changes, Lassa turned his attention toward underpowered British sports cars with built-in oil leaks. After a varied early journalism career, he joined Autoweek, then worked in Motor Trend’s and Automobile’s Detroit bureaus, before escaping for Mountain Maryland with his wife, three dogs, three sports cars (only one of them British), and three bicycles. Lassa is founding editor of thehustings.news, which has nothing to do with cars.
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