With new electric vehicle sales approaching a record 7% of the total US auto market, the used EV market is beginning to pick up. According to new data from Cox Automotive, used EV sales were up 32% in the first quarter, with a clear new path to increase rapidly.
Although used EV sales have lagged thus far, as new electric vehicle sales continue climbing at a record pace, more used models are now becoming available. Cox Automotive is forecasting new electric vehicle sales will reach close to 7% in Q1, surpassing over 225,000 units and more than doubling from 3.1% in 2021.
In October, Electrek reported on how used EV prices were finally beginning to stabilize after the average used electric vehicle price soared last summer, with buyers scooping up higher-priced models entering the market.
The most recent data shows the average price of a used EV was roughly $43,400, down 4% from last year and well below the average cost of a new model (around $59,000).
As the report wisely points out, the lower prices are most likely a reflection of Tesla’s recent price cuts. After selling over 1.3 million vehicles last year, many in its domestic market, Tesla held its dominant position, representing over 60% of US EV sales despite new competition entering the market.
As a result, Tesla’s price adjustments have influenced much of the market, with several automakers, like Ford, following suit.
As Tesla and other EV makers continue ramping up production, more people are trading for newer, more technologically advanced models, meaning more used EVs are available.
Used EV sales doubled in two years, set to intensify further
According to the report, retail used EV sales (those sold through a licensed dealership) increased by 32% year-over-year (YOY) to 42,756 in the first quarter. However, the trend is only expected to accelerate from here, as Jonathon Smoke, chief economist at Cox Automotive, points out:
Our data sets indicate used EV sales will begin increasing rapidly from here, following a clear path set by new sales.
Used electric vehicle sales doubled in the first quarter compared to Q1 2021 and are set to grow even further.
Used EV transaction volume at Manheim, the largest US wholesale vehicle marketplace, increased by 40% to 9,800 in the first quarter compared to last year.
The trend is only expected to intensify from here, with analysts forecasting new EV sales in the US will reach one million for the first time this year.
Electrek’s Take
The data from the report doesn’t come as a surprise. It’s more a reflection of the state of the market and where it’s headed in the future.
As new EV sales continue smashing records, more used EVs will become available as buyers trade up for the latest tech and features or more range. Used EVs are also eligible for a tax credit of up to $4,000, which is expected to accelerate the adoption of zero-emissions vehicles further.
With Tesla delivering another record performance in the first quarter, beating expectations again, you can expect more of the same. Furthermore, Tesla just slashed prices across its entire lineup on Friday, suggesting used EV prices could have further to fall.