The average price of a three-year-old used electric car has dropped by 43.8% over the past 18 months, according to INDICATA UK’s latest Market Watch report.
In June alone, used EVs saw a price decline of 2%, pushing them closer to price parity with internal combustion engine (ICE) vehicles across various sectors.
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Overall, UK used car prices remained relatively stable in June, with a minor decline of 0.1%, indicating a levelling off after a 16.5% drop since January 2023.
Falling prices have spurred increased demand for used EVs, which aligns more closely with supply. Market Days’ Supply (MDS), a metric that divides available inventory by the average daily retail sales rate over the past 45 days, fell to 50 days at the start of July. This is slightly behind hybrids at 47.5 days and diesel and petrol vehicles at 45 and 41 days, respectively. This trend contributed to the UK having the lowest MDS in Europe in June, driven by strong demand and cautious dealer stocking of zero-emission vehicles.
Manufacturer-backed tactical registrations significantly influenced the June market, with sales of used cars under 12 months old increasing by 15.9% month-on-month. Many nearly new EVs entered the market this way as original equipment manufacturers (OEMs) work towards their 22% zero-emission vehicle (ZEV) mandate for 2024.
In June, EVs accounted for 9.3% of the market share of used cars up to four years old, trailing diesel at 10.8% and hybrids at 30.6%. Petrol cars remained the dominant fuel type with a 49.1% share.
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By GlobalData
Dean Merritt, INDICATA UK’s head of sales, noted the challenges for leasing companies with used EVs at the end of customer contracts. “Some are turning to secondary leasing for their younger, lower mileage used EVs as a means of reducing the residual value pain, which also helps to reduce the chance of ex-fleet cars flooding the market,” Merritt explained.
He added that consumer demand for used EVs continues to rise as prices fall, though the market adjustment is progressing more slowly than anticipated.
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