Used electric car sales nearly double amid drop in prices
Sales of used electric cars nearly doubled last year as new models began to flood the market and prices fell sharply, helping to trigger a record number of second-hand deals.
A total of 118,973 used all-electric cars were sold in 2023, according to data from the Society of Motor Manufacturers and Traders (SMMT), up 90pc on the previous year.
Battery-powered cars accounted for 1.6pc of the overall used car market, with the SMMT claiming there remained “keen demand” for electric cars.
A glut in supply of used electric cars, as early buyers sell their now ageing vehicles, has led to falling prices. Meanwhile, an influx of new brands from China has made electric cars more widely available.
Some electric cars have endured rapid depreciation, far outstripping petrol equivalents, with prices of used battery-powered vehicles dropping by 23pc in the last year alone, according to Auto Trader data published last month.
A motorist buying an electric car now can expect its value to depreciate by around 50pc over three years, according to Motorway.com. This would leave a Tesla Model 3 bought for £39,990 now worth £19,995 when it is sold.
Sales of hybrid and plug-in hybrid vehicles also climbed 40pc and 25.1pc, meaning cars with some kind of battery-power made up 5.6pc of all used car sales.
Mike Hawes, chief executive of the SMMT, said: “A healthy new car market is key to driving choice in the used sector and it’s great to see record numbers of second and third owners benefitting from the growing availability of electric vehicles.”
Ian Plummer, commercial director of Auto Trader, said: “The used electric market may still be in its infancy, but last year saw a definite growth spurt. Significantly softened prices, greater availability and more choice has proven a compelling combination.”
While sales of used cars rose, electric car uptake has generally been hampered by the cost of new models, which remains stubbornly high.
Data published earlier this week also showed that the market share of new electric cars had slipped, falling from 19.7pc in December to just 14.7pc in January.
A decision by Downing Street to push back a ban on new petrol cars from 2030 to 2035 has also been blamed by the industry for threatening to slow down adoption.
Despite rising sales, electric cars represent just a fraction of the used car market. Overall, used car sales climbed by 5.1pc over the year to 7.4 million, although this still remains some way down on the more than 8 million cars sold in 2016 and 2017 amid gradual declines in car ownership.
Mr Hawes called for the government to consider cutting VAT on new electric vehicles in the upcoming Budget to boost uptake. He said: “Halving VAT on new EVs, while making public charging as easy and affordable as plugging in at home, would ensure a faster and fairer transition.”
Despite the boost to used car sales, a report from the House of Lords this week warned that many electric cars were still unaffordable to most consumers. The report also called for fresh incentives, such as cutting VAT on public charging to 5pc to juice interest.
