Used EV selection increases, prices decline
Affordability and availability of used electric vehicles is improving, and in some cases, so are sales.
Over 4% of Carvana’s sales in the first quarter were battery-electric vehicles, more than doubling their share of sales from Q1 2023, according to a study released Wednesday by the online used-car retailer.
Specifically, BEVs represented 4.3% of Carvana’s sales in Q1, up from 1.8% a year earlier.
And while in the overall used-car market, BEVs commanded less than 1% share of sales for full-year 2023, 7.6% of new-car sales last year were BEVs, compared to 5.8% in 2022, Carvana said, citing Kelley Blue Book and MarketCheck data.
And that means more used EV supply in the future.
“The significant, multi-year growth in new EV sales is a leading indicator of the potential of the used EV market,” Carvana CEO Ernie Garcia said in a news release.
“As a larger selection of EVs makes its way into the used fleet, prices normalize, and tax credits become available, more used car buyers will have the opportunity to access the EV category.”
To Garcia’s point, average used BEV sale prices at Carvana were $31,000 in Q1, down 16% year-over-year.
And the gap between the prices of used BEVs and used internal-combustion vehicles has also narrowed at Carvana. In Q1, BEVs were $7,000 more expensive than ICE vehicles; that’s down from a $13,000 gap a year ago.
Additionally, the company said that 24% of its first-quarter EV and plug-in EV sales qualified for the Federal Used Clean Vehicle Credit.
“Carvana has always sought to build an inventory that matches the tastes and preferences of our customers,” Garcia said. “While we maintain a diverse selection across all fuel types, we are proud to now offer more than 50 different models of EVs at a wide range of price points.”
Elsewhere, average list prices (ALP) for used EVs ($37,200) on the CarGurus platform fell 19.3% year-over-year in April, while the amount of used EVs listed climbed 29.6%, the company said in its Intelligence Report for April.
What’s more, all 10 of the used-vehicle models with the largest year-over-year price declines were EVs. And all 10 had price drops north of 30%, according to CarGurus.
Granted, the year-over-year declines in used EVs have mostly slowed since July, and April was the first time in six months that used EV prices climbed month-over-month, the company said.
Still, it appears consumers are in a much better position with certain used EV models.
“The influx of 30,000 used EVs from fleet providers like Hertz in 2024 could lead to further price reductions for specific models,” CarGurus director of industry insights Kevin Roberts said in a recap of the report.
“It’s important to note, though, that the price declines appear to be having a positive impact on some models. For example, the Tesla Model 3 had an ALP of $43,289 at the start of 2023 and spent 81 days on the market (DoM),” Roberts said.
“By the end of April 2024, the ALP had dropped to $26,396, a decrease of 39%. Correspondingly, the DoM fell to under 49 days, representing a drop of 38.6%,” he said. “By comparison, for overall used vehicles, the ALP declined just 3.6% and DoM declined 13.3% over the same period. This suggests that the price declines are stimulating interest in select used EV models.”