“It’s enabling middle-class consumers who have always believed electric vehicles (EVs) were unaffordable to enter the market, purchase an EV, and also be able to make a car payment that they can afford,” the dealer stated.

Reduced prices and excess inventory

An economic conundrum has also been made possible by the increase in used EV availability: although prices are declining, demand for used EVs is increasing. Cars.com reports that although used EV searches have climbed 45% over the previous year, supply has increased 42%, and the average price of a used EV on the site has decreased by 20%.

Truecar documented a comparable circumstance. Even though used EV sales have increased significantly, they still represent a tiny share of all used vehicle sales. Used electric cars, for example, accounted for 4.3% of Carvana’s sales in the first quarter of this year, a significant increase from 1.8% in the same period the previous year.

According to Matt Jones, a TrueCar representative, “you have people who have been sitting on the sidelines who want an easy, risk-free way to adopt new technology.” “And when you buy something for $20,000 instead of $80,000, the risk is much lower.”

To handle the inflow of used EVs, Manheim, a Cox Automotive firm that sells used cars to auto dealers wholesale, has had to modernize its processes nationwide. The company, which runs many sizable auction sites that individually handle thousands of pre-owned vehicles, sold 60% more electric vehicles (EVs) in 2023 compared to 2022, and it projects that figure to triple by 2024.

“Not only have we had to add chargers, but more than that. Everything in our shops, including the chargers, was designed with [internal combustion] vehicles in mind, according to Grace Huang, president of Cox Automotive Inventory Solutions. “And because the batteries are so heavy, we had to add lifts that can support more weight.”

Tesla has been actively lowering the price of its well-liked Model 3 car and Model Y SUV over the past year or so, which has contributed significantly to the decline in used EV pricing. Economics simply dictates that when a carmaker lowers the price of its new items, comparable used goods—in this case, electric vehicles—also decrease in price.

Using data from Edmunds.com, the price of a certain used 2021 Tesla Model 3 sedan decreased by an average of almost 29% in 2023. That was higher than the typical used car from the 2021 model year, whose value would have decreased by roughly 19.5% in that same time frame.

But Jones pointed out that one advantage of purchasing secondhand EVs is that they have historically appreciated in value more quickly than gas-powered vehicles.