Second-hand electric car prices fall as demand dwindles
Second-hand electric car prices are tumbling amid a glut of stock as drivers trade their cars in.
The average price of a pre-owned electric vehicle has fallen by 13pc over the last year to £33,060, AutoTrader found.
The second-hand car marketplace said prices were coming down as more supply comes onto the market. Many new cars bought between 2018 to 2020 are now being sold on by owners whose financing schemes have come to an end.
The number of second-hand battery powered vehicles listed on AutoTrader has jumped by 261pc over the last 12 months. Demand has not kept up, with buyer searches for electric cars only rising 47pc.
Second-hand buyers have been slower to adopt the vehicles since most will not have bought a used electric car before.
Encouraging a healthy market for second-hand battery-powered cars will require “demystifying” them, Auto Trader’s Richard Walker said.
The drop in used prices follows a decline in the asking price of new Tesla cars, the most popular electric car models in the UK.
Earlier this month, the price of a basic Model Y was reduced by 6pc to £44,320, while the price of the lowest-spec Model 3 was reduced by 6pc to £40,470.
Parts shortages across the car industry, which saw prices of both new and used cars shoot up, have eased in recent months. This has removed upward pressure on prices and led to expectations that cars may even continue to get cheaper as supply improves.
Lower priced competitors are also entering the market. Ora, owned by China's Great Wall Motor, offers UK buyers an electric car starting at £32,000, while BYD, another Chinese manufacturer backed by US investor Warren Buffet, sells its Atto 3 from £36,400.
Chinese car makers have better access to battery raw materials like lithium and cheaper labour, allowing them to undercut Western rivals on prices.
Mr Walker said: “EV prices are falling, but it is not true to say drivers don’t want them. Consumer demand for EVs remains very robust and is up year on year, but it is simply the case that the supply of used EVs has rocketed even faster to dampen prices.
“That said, ahead of 2030, encouraging car buyers into used EVs through incentives, marketing and information to demystify them will be critical.”
Sales of battery-powered cars grew by 18pc last month, industry data shows, though this was slower than the broader market, which grew by a quarter.