avid Paul Morris/Bloomberg via Getty Images
It probably hasn’t escaped your notice that cars have gotten very expensive recently. Almost across the board, automakers have abandoned smaller, cheaper product lines. Then came the pandemic, and then the Russian invasion of Ukraine. Supply chains collapsed, and production lines were idled. New cars became scarce, with huge markups in many cases, causing used car prices to soar. But used electric vehicles have been bucking that trend, according to data from the car-shopping app CoPilot.
As we enter the second half of 2023, many of those logistics and sourcing problems have been overcome, and many automakers have ramped up EV production and increased imports into the US. That increase in inventory is being painted by some as new EVs becoming unsellable; this week, Axios warned of EVs “piling up on dealer lots,” for instance.
That piece and quite a few others like it quote data from Cox Automotive about increasing inventory among brands like Genesis and Audi. It blames high purchase prices and a lack of federal tax credit eligibility as problems. Even more affordable EVs are called out—the Ford Mustang Mach-E is described as “once-hot” but now oversupplied, but that’s a direct result of Ford heavily ramping up production over the course of 2023.
The average price of a used car is still about a third higher than it was two years ago, according to CoPilot, but used EVs have actually dropped in price over the last few months. Unsurprisingly, Teslas lead the way—there are so many more on the road than all other EVs put together, and the automaker has engaged in heavy price cutting since the start of the year.
Used Tesla prices have fallen an average of $7,141 (or 13 percent) since December 2022 and by $24,955 (or 35 percent) year on year. Looking at the whole market for used EVs, CoPilot found the average price had dropped by 34 percent to $44,160.
But there are many used EVs to choose from, and a quick search online shows plenty of used EVs for far cheaper than that. Tesla has sold hundreds of thousands of Model 3 sedans in the US, with quite a few available for less than $25,000, meaning they’d also qualify for the used EV tax credit. Buying a used Tesla would also get you access to the country’s better EV charging network well ahead of all the non-Tesla OEMs that have recently announced they’re switching charging plug standards.
Other EVs may not be in quite as plentiful supply as the Model 3 or Model Y, but they have also seen used prices decline. BMW i3s are getting dangerously cheap once again, which makes me rue the fact that I don’t have anywhere to charge one.
With regard to a potential glut of new EVs, I’m not particularly worried. Car makers need to sell EVs to satisfy corporate average fuel economy targets, and soon in increasing numbers. If new EVs pile up in lots, OEMs will roll out incentives to move units. And that will almost certainly be good for buyers.