The “shocking depreciation” of electric cars last year has made half of car dealers cautious about buying them to stock their service stations, according to a new report.
Electric vehicle (EV) owners are being warned to “expect little enthusiasm” when trying to sell their battery-powered cars to dealers, a survey of second-hand motor dealers by HonkHonk suggests.
More than one in three dealers said they are “a lot less interested” than a year ago in taking an electric vehicle away from someone, while one in eight are “a little less interested” after seeing thousands of pounds wiped out. of the value of these cars. when prices plummeted last year.
Used car dealers are reluctant to increase their stock of electric vehicles – a survey of second-hand motor dealers found that half are less willing to buy second-hand electric vehicles over concerns about their value.
EV price drops in 2023 were widely reported by This is Money.
In December, we listed the 30 electric cars that had lost the most value during the calendar year based on data provided by market experts, cap hpi.
The worst was the Seat Mii Electric. A one-year-old example of this battery-powered city car would have been worth £18,650 in early 2023, but a 12-month-old Mii in December was worth just £10,150, a deflation of 46 per cent.
In fact, the 10 EVs that plummeted the most last year lost value by more than 39 percent, and older models were equally affected.
HonkHonk, a trading platform that brings together motorists with dealers who want to buy stock of used motors, says that because price drops last year erased almost half the value of some electric vehicles, dealers are “afraid” to stock them today, believing that there is little. win in terms of profits.
A survey of 66 independent dealers across the country asked whether their attitude towards purchasing electric vehicles for their service stations had changed compared to 12 months earlier.
More than half said their intention to buy electric vehicle stocks had decreased.
More than a third (38.5 per cent) said they were “much less interested”, while another 12.3 per cent were “somewhat less interested” in acquiring new stock of electric vehicles.
By contrast, only 7.7 percent responded to the survey and said they were much more interested or somewhat more interested in purchasing electric cars from owners.
Dealers’ refusal to buy new stock of electric vehicles could drive values down further, forcing owners to buy less if they want to replace them with something else.
Sebastien Duval, chief executive of HonkHonk, said: “The problem is that the surprising depreciation we saw last year in many electric vehicle models has left dealers worried about losing money if a car doesn’t sell quickly.”
‘It’s a dramatic contrast to dealers’ appetite to buy stock in general, because we’re seeing demand for other cars skyrocket when HonkHonk users offer them.
“Right now, dealers can’t get enough small or medium-sized gasoline cars, mid-sized diesels and even hybrids, since the market began to recover in 2024. But fewer than one in ten want to buy a battery electric vehicle more than a years ago.’
Dealers’ refusal to buy new stock of electric vehicles could drive values down further, forcing owners to buy less if they want to replace them with something else.
Market analysts have reported that electric vehicles are partly victims of their own success, as supply increases in the used market and rapid improvements in the latest new models make used examples less rare. but also less attractive for motorists.
Combined with the current problems of inadequate charging infrastructure, previous generations of electric vehicles, with their lower mileage ranges, are losing out to the type of smaller gasoline and diesel cars that drivers rely on and the new ranges of improved but expensive electric vehicle models.
This is driving down the price that dealers are willing to pay for electric vehicles in cases where they are happy to add them to their stock.
A Jaguar I-Pace driver commented on a owner forum that the JLR dealer they use offered to take their 18-month, 5,000-mile electric luxury car, which cost £77,000 new, in part exchange worth £27,000. This represents a loss of £50,000 (-65 per cent) in just a year and a half.
Duval said: “Dealers are much more risk averse after the tough market they experienced last year, which means they are hungry for cars they know they can turn over for a quick sale.”
“It’s good news for anyone looking to sell their traditional economy family car direct to a dealer, but we’d caution anyone looking to sell their older electric vehicle not to expect much enthusiasm from dealers.
“They’re probably better off trading in their older EV to the dealer who sells them another new EV.”
Auto Trader says EV values are down, but consumer demand for used models remains
However, Auto Trader presents a slightly different picture of the current level of demand for second-hand electric vehicles, based on activity on its website. In fact, he says the health of the electric car market is much greater than that of gasoline cars at the moment.
In its February retail price index, which is based on analysis of around 800,000 motors for sale on its platform, it said it is seeing strong demand for second-hand electric vehicles.
Appetite for used electric cars “increased a whopping 81.5 percent year-on-year in February,” the report states.
It said this was combined with a -1.1 per cent drop in supply, which in turn fueled a huge 83.6 per cent increase in what it calls “market health”.
Auto Trader says it is seeing strong demand for electric vehicles on its website, although this does not stop the value of electric vehicles from declining over the past 12 months. The average announced price of an electric car on the platform in February was 16% lower than a year earlier
Demand for premium brand electric vehicles increased by 77.3 percent (supply increased by 10.4 percent), while conventional “volume brand” electric vehicles increased by 58 percent (supply decreased by – 10.7 percent).
Appetite for electric cars from ‘super premium’ brands (such as Porsche’s Taycan) increased by 175 percent in February, despite a 37.6 percent increase in the supply of models entering the used market.
By contrast, demand for used gasoline cars (6.2 percent) was just above supply (5.6 percent), resulting in a conservative 0.6 percent increase in market health.
However, Auto Trader’s own data shows there has been a big drop in average used EV values over the past 12 months.
In February 2023, the average price of a second-hand electric car was £33,701. A year later, the average price last month fell almost 16 per cent to £28,488.
While second-hand gasoline cars have also fallen, they have done so at a slower rate.
The average price of a used petrol model fell from £16,062 to £14,978, a drop of 7 per cent.
Richard Walker, head of data and insights at Auto Trader, told This is Money that the increased supply of used EVs and increased competition is big news for buyers, although not so much for sellers.
‘Demand for second-hand electric cars has been strong, with ad views in our market almost doubling year on year to reach 17.5 million in January and February and the proportion of inquiries sent to retailers about electric vehicles also has increased. Therefore, a greater supply leads to more options and, therefore, more buyers; “It’s great to see the market maturing and opening up electric vehicles to a wider range of drivers,” he explained.
‘In particular, two-year-old electric cars are gaining a lot of interest, as their more attractive prices allow consumers to afford them, while new electric vehicles are still significantly overpriced, putting them out of the market. within the reach of many.
“Although last year’s price drops had an impact on confidence in the used electric car market, the growth in demand now that prices are more affordable shows that people are interested in trying out an electric car, especially when “The price is right, and with potential.” Currently saving on running costs is £131 per 1,000 miles travelled, it’s no wonder more people are considering making the switch.’
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