3:45 pm, January 27, 2023
Used electric car prices have continued to plummet in January as consumers shy away from the technology, according to official figures.
On average, used electric car prices have dropped by a whopping 6.6 per cent in the month – the equivalent of £2,050.
Trade valuations firm Cap HPI has revealed its latest data on the freefalling electric car prices and they show some models fell by more than £5,000.
Derren Martin, director of valuations for the firm, told Car Dealer Live – in an exclusive video you can watch above – about the severity of the price drops.
Cap HPI has seen Teslas particularly badly hit since the new prices were adjusted earlier this month.
A used Model 3 has now dropped 10.5 per cent – or £3,825 – in January and in the last four months has lost an incredible £13,275.
Tesla Model Ys lost 11.1 per cent, or £5,500, in January. The rear wheel drive model lost 14.1 per cent, or £6,800.
Since October, the Tesla Model Y has lost a worrying 27 per cent of its value – the equivalent of £14,000.
The falling electric car prices dragged down the used car market overall in January, which registered a 0.1 per cent rise overall on December.
Martin said the falling EV prices has come as a result of negative headlines around charging and the fact electric cars are more expensive than their traditionally powered equivalents.
He said: ‘We’ve been saying this for a few months that EVs have been under pressure, probably since about October time and that’s continued and I would say it’s accelerated in January.
‘There was a lot of bad press over Christmas about it taking two or three hours to charge your car up at motorway service stations, plus the expense involved in charging your car up, particularly if you don’t charge at home.
‘But also the main thing is just the cost of those electric vehicles compared to ICE equivalents – it’s too wide, really. So you can look at a comparable car, and if you go in and buy one you’re probably going to come out with a petrol or diesel car, particularly petrol.’
January Electric car price falls
Source: Cap HPI data on prices EVs fell compared to December
- Mini Cooper Electric – down 11.5%, -£2,917
- Tesla Model Y – down 11.1%, -£5,500
- Hyundai Ioniq – down 10.6%, -£2,375
- Nissan Leaf – down 10.6%, -£2,407
- Tesla Model 3 – down 10.5%, -£3,825
- Jaguar I-Pace – down 10.3%, -£5,020
- BMW i3 – down 9.3%, -£2,489
- Renault Zoe – down 8.7%, -£1,640
- Polestar 2 – down 8.7%, -£3,595
- Audi e-tron – down 8.4%, -£4,060
Martin said if it hadn’t been for falling EV values in January the overall used car prices in January would have performed better – instead of up just 0.1 per cent, more like up 0.5 per cent.
He added: ‘There’s more EVs coming back in [to the market], they’re expensive, and there’s a push back from the consumer to buy them, which is just kind of been the perfect storm really for EV values.
‘We’ve knocked 1000s of pounds off some EVs and it’s not really a surprise – usually we get the manufacturers knocking on the door asking what we are doing, but they all realise what’s going on in the market.
‘To be honest, a lot of them have been overpriced for too long.’
Martin explained that the EV price falls are a ‘market correction’ which he doesn’t think will last forever. Initially Cap HPI was predicting used EV prices would fall more gradually but instead there has been a sharp drop off.
He added: ‘I think it’s a market correction. We were actually predicting within our forecasts a year ago for this to happen, but being honest, we thought it would start earlier and be a longer tail.
‘We thought the values would come down as the volumes increased over the course of the year – but it’s all happened in a short period of time.
‘Model 3, for example, we’ve knocked a third of the value of that since October – in four months! That’s a big chunk of money coming off those.’
Values have also fallen as a result of increased volumes arriving in the used car market.
But Martin said as prices level out, they will start to become attractive again to consumers and it’s then they’ll settle down.
He said: ‘You’ll get to a point where they become financially attractive, again.
‘We’re not a million miles away from that. You’re already starting to see a Tesla Model 3 for less than £30,000 for some used examples. Once you get down to those sort of levels, then there’ll be consideration again.
‘People still want to drive a Tesla – even though there’s a lot of them coming back, they will sell at a price.’
Martin explained some dealers have even put a ‘buying ban’ on their used car departments when it comes to EVs as they’re so hard to shift.
He said on average EVs take 27 days to sell whereas a petrol will take around 11, so dealers are shying away from them.
‘We’ve got it on good authority that there’s buying bans at quite a number of retailers,’ said Martin.
‘They’re just being really wary about buying EVs.
‘I think prices will continue to drop for a little while on many models, not on all of them as to say the Model 3 is now looking more attractive, the Model Y probably still looks expensive.
‘So values will have to come down on certain models a bit more for a few weeks.’
You can watch the video interview with Derren Martin in full at the top of the page.
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