According to the most recent iSeeCars study, used electric vehicle prices have fallen by nearly 30%! On today’s CBT Now, we’re pleased to welcome back Karl Brauer, the Executive Analyst for iSeeCars.com, where Brauer will shed some insight into the numbers and what’s happening with the used car market overall.
The used car industry has faced significant turbulence over the past three years. However, the market is finally starting to see some moderation. Brauer notes that despite being well above pre-pandemic pricing levels, “The market has come off its high, and we are seeing stabilization in the general used car market.” Over the last few months, the industry has experienced slow drops of three to 4%. However, used car prices are in a “free-fall,” meaning they are continuously falling primarily due to Tesla.
Price Factors
According to Brauer, “Tesla is the biggest portion of used prices. It’s due to the EV maker continuously cutting its new car prices. Ultimately, Tesla has caused the used car market to collapse over the past year.” He further explains, “A year ago, we faced turbulent gas prices, which made EVs more desirable.” But, since then, EVs have stabilized to the general public. Also, a year ago, the industry didn’t have inflation or today’s interest rates. Anytime consumers buy a new or used EV, they pay more for the equivalent EV than the traditional vehicle. “Plus, the economic concerns are raising people’s awareness or hesitation to buy anything, asserts Brauer.
Brauer also believes, “There are three or four factors that are more destructive to the market than a year ago. It’s also important to note that a year ago, EV prices rose faster than the general traditional cars, now they’re reducing considerably faster.”
Tesla
The Austin-based EV maker spent the last ten years with no car, plenty of demand, and no competition. Then suddenly, they are being flushed by competitors such as Lucid and Rivian. Tesla has had to reduce its Model S, 3, and X prices to sell the relatively new Model Y. But because Tesla is lowering costs, it’s impacting the overall market. For example, the more desirable luxury brands that frequently struggle in normal conditions, like the Land Rover, Infinity QX80, and the Seven series BMW, struggle to hold their value. Insinuating those vehicles don’t have the same pulling power as used cars.
