Used electric vehicles are selling like hot cakes and are cheaper than comparable used gas cars! However, due to the technology being relatively new along with COVID-19 supply chain impacts, some unique trends are underway within the used EV market. According to Recurrent, two big trends are: 1) a low inventory of pre-owned EVs and 2) a global shortage of silicon chips, which EVs use ten times as many of. Dealerships that reduced supply during the COVID shutdown are now racing to replenish their used EV inventory. Recurrent reports that dealerships are so hungry for supply that some are going so far as to reach out directly to former customers to try encouraging them to sell back or trade-in their EVs.
On the bright side, approximately 70% of U.S. annual car purchases are used cars. This represents a huge market for EVs to tap into. With the combination of more and more early adopters’ three-year leases expiring and a huge new crop of increasingly affordable EVs hitting the market, the good news is that there will be used EVs starting as low as $10,000 soon. According to Recurrent, as of September 2021, over 45% of all used EVs in the US are already under $25,000, nearly 30% are already under $20,000 and new EVs will inject the used market with a hearty supply of $10-15K EVs over the next few years. This is the price point necessary to attract a majority of drivers and finally tip the market.
Like with all new technology though, important issues exist that must be addressed to successfully speed up that tipping point.
First, similar to new EVs, used EVs are still new technology, so consumers have questions and concerns. Used car buyers are not early adopters—though they do spend considerably more time online researching their purchase options. That’s why Veloz is prioritizing education and outreach around used EVs. We recently launched a comprehensive used EV education page on ElectricForAll.org to answer questions and help consumers tp understand all the benefits of used EVs.
The value of driving a used EV is indisputable. Consumer Reports estimates that the cost savings of 5-7 year old used EVs is 2-3 times larger on a percentage savings basis when compared with similar gasoline powered cars. And, with the exception of low range models (100 miles or less), all EV categories are expected to hold their value like gas vehicles.
Chief among used EV car buyer concerns is battery degradation, lifetime and cost of replacement. The answer to this concern varies from car to car and from automaker to automaker. Recurrent offers a vehicle-specific range report with consumer information on battery condition and value. Battery technology is improving by leaps and bounds. The Lucid Air Dream Edition was recently rated by the Environmental Protection Agency with an estimated driving range of 520 miles on a full charge. Right now unfortunately, there is little transparency with battery life. So too with warranties.
Federal and state regulators could help by establishing industry standards for providing battery life disclosure and warranties for used EVs. The California Air Resource Board’s upcoming Advanced Clean Car II (ACCII) proposal includes “Assurance Measures” that establish warranty and durability requirements for zero emission vehicles. The federal government has instituted an automaker mandate to offer a minimum of an 8-year/100,000-mile warranty on EV batteries, but often that warranty does not transfer to another owner. Warranties need to keep up.
Second, even as Cox Automotive finds “more Americans are steering toward electrified vehicles and the industry has likely passed the point of peak gas-powered mobility,” the need to accelerate adoption. One program successfully doing this is the California Air Resource Board’s “Clean Cars 4 All” program which helps lower-income consumers get into cleaner technology vehicles by retiring their older, higher-polluting vehicles and upgrade to a cleaner vehicle—oftentimes a used EV. Participants also have the option to replace their older vehicle for alternative mobility options, such as public transit passes or an electric bicycle. Currently, this program is available to income eligible vehicle owners exclusively residing in the Bay Area, Sacramento, the South Coast Air Basin and the San Joaquin Valley, though it hopes to be able to expand statewide within the next few years.
Some utilities are already active when it comes to providing incentives for used electric vehicles. For instance, the Los Angeles Department of Water and Power offers their own rebate for used EV purchases. So do Alameda Municipal Power, Peninsula Clean Energy and others, but more are necessary as current incentives programs will not get us the emissions reductions we truly need. Moving used car buyers away from used gas cars and into used electric vehicles will though! Interested used car buyers can visit ElectricForAll.org to search available used car incentives offered by zip-code and view a list of specific items to look for when buying a used EV.
Used EVs represent an extraordinary opportunity to move the EV market to its tipping point, and more importantly, used EVs can dramatically improve the lives of those living in communities most burdened by air pollution by putting dollars back into their pockets and substantially decreasing the toxic pollutants in the air. As used EV inventory increases and more car makes and models become available, used EVs provide a critical opportunity to accelerate Electric For All forward!