Used electric car prices plummet after two years, data finds
Planning to sell your EV on the used market? You may have to move quickly if you want a good price, according to a new report.
Used electric cars have below-average resale value and spend a longer time on sale than other used cars, new Australian data has found.
The data, taken from dealer and private used-car listings in Australia in December 2023, shows electric vehicles (EVs) are currently losing a large proportion of their value after the two-year mark.
The recent easing of EV supply constraints and widespread manufacturer price decreases are likely to blame, and have resulted in new electric cars becoming a more competitive option for buyers, experts said.
Additionally, electric cars still represent a relatively small proportion of the used-car market – with longer-tail data harder to come by given their relative infancy in Australia.
Average value retention for used electric cars
According to the data – shared by the Australian Automotive Dealers Association (AADA) and automotive insights company AutoGrab – used electric cars see a most dramatic drop in their retained value after two years, particularly when compared to the rest of the market.
Retained value reflects how much of a car's value when purchased new it would hold if sold today. For example, if a 2018 Toyota HiLux purchased new for $80,000 has a retained value of 85 per cent after two years, that means it would be worth roughly $68,000 if sold on the used-car market in 2020.
While electric cars less than two years of age retained a respectable 82.8 per cent of their original value when resold in December 2023, electric cars between two and four years old held on to just 57.6 per cent of their value, while electric cars five years of age or older were worth less than 25 per cent of their original purchase price when resold.
For comparison, the average retained value across the entire used-car market for vehicles between two and four years old was 85.9 per cent, meaning EV value retention was well below the market average.
"From the data, it's the two- to four-year-old category [of EVs] where we've started seeing significant drops in retained value that would be a concern for some EV buyers," James Voortman, CEO of the AADA, told Drive.
Average value retention for used cars in Australia in December 2023
| Vehicle age | Electric cars | Entire market |
| 0–2 years | 82.8% | 95.5% |
| 2–4 years | 57.6% | 85.9% |
| 5–7 years | 24.1% | 68.8% |
Source: AutoGrab
Average days to sell for used electric cars
Meanwhile, days to sell – another measure of buyer demand – was also higher for electric vehicles when compared to the used-car market as a whole.
The report found EVs less than two years old sat on the market for an average of 75 days in December 2023, while this increased to 76.9 days for EVs between two and four years old – notably more than the market average of 50.6 days.
"The general [used-car] market saw movement up to around 50 days for a car to sell, but EVs spend roughly 20-odd days more on the market in general," Mr Voortman of the AADA said.
Electric cars five years of age or older were particularly unpopular on the used market in recent months, taking an average of 93.5 days to sell.
Average days to sell for used cars in December 2023
| Vehicle age | Electric cars | Entire market |
| 0–2 years | 75 days | 52.2 days |
| 2–4 years | 76.9 days | 50.6 days |
| 5–7 years | 93.5 days | 50.3 days |
Source: AutoGrab
Market dynamics, not vehicle quality, are to blame
Mr Voortman acknowledged the data was "immature" due to the relative newness of electric vehicle offerings in Australia.
"It must be said there aren't many EVs on the used car market, and those that are there are between one and four years old so ... the data set isn't as mature as we'd like it to be and ... we might benefit from another year's data," he explained.
While the price drops could be partially attributed to consumer uncertainty around EV battery longevity, Mr Voortman said the fluctuations were more likely due to "market dynamics".
"We don't believe it's anything to do with the product, we think these are excellent cars – it's more to do with market dynamics, improving supply of EVs relative to demand and, because of that improving supply, significant price cuts from EV manufacturers."
In particular, Mr Voortman said global price changes from market leaders like Tesla – which cut its vehicle prices a total of three times in 2023 – have had an impact on the local resale market.
"When [Tesla] makes changes, everyone sees it ... they really can move the market. We've seen similar competition from the Chinese manufacturers – it's not a bad time to be a consumer buying a new electric vehicle."
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