Despite facing production challenges and grappling with an evolving charging network, the used electric car market is experiencing an impressive surge. A recent market report from Recurrent, a startup specializing in battery health and data, reveals that used EV sales in the first half of 2023 have outpaced the majority of new EV sales.
During the first six months of 2023, a remarkable 140,000 used electric vehicles found new owners in the United States. Surprisingly, this figure surpasses even the total number of new Tesla Model 3s sold during the same period. For perspective, it’s worth noting that it is estimated that 200,520 new Model Ys were sold in the first half of 2023.
Examining other new EVs sold in the first half of 2023, the Chevrolet Bolt comes in next with 33,659 units, followed by the Rivian R1T at 16,452 units and the Volkswagen ID.4 at 16,448 units. In essence, Tesla continues to dominate both the new and used EV markets in the U.S.
Recurrent’s analysis of the situation underscores the shift in the automotive landscape: “Used EV sales, as a segment, now dwarf the sales of every new EV model besides Tesla Model Y and 3.” Moreover, it highlights that “the used EV market is more affordable than at any time in the past 2.5 years, while the mix of vehicles favors newer, longer-range models than ever before.”
For consumers looking to purchase used EVs, this trend translates to good news. Prices have hit their lowest point since the beginning of 2021, with the average price of a used EV in the U.S. now standing at $27,800, marking a substantial 32 percent year-over-year drop. Tesla has significantly influenced this trend, with the average price of a used Tesla Model 3 decreasing by more than $9,000 since 2021.
Several factors have contributed to the growth of used EV sales. Over the past three years, the used EV inventory has tripled, rising from 11,000 vehicles in April 2021 to over 33,000 today. A notable 73 percent of this inventory consists of pure EVs, while the rest are plug-in hybrids.
Crucially, 30 percent of these used EVs qualify for the $4,000 federal clean vehicle credit. This process is about to become more accessible, as starting from January 1, 2024, customers will be able to transfer EV credits to a car dealer, directly reducing the vehicle’s purchase price.
Contrary to the belief that most used EVs are outdated with degraded batteries, the data paints a different picture. Nearly 30 percent of the vehicles in this inventory are less than two years old, and 45 percent are three years old or newer. Despite the natural degradation of EV batteries over time, some owners have reported negligible degradation rates, even after covering more than 100,000 miles. Notably, Tesla’s CEO Elon Musk has stated that Tesla batteries can last between 300,000-500,000 miles or 1,500 charge cycles, offering confidence to prospective buyers.
These developments suggest a positive outlook for the used EV market in the United States. The sector is on a trajectory to become more affordable and accessible to a broader segment of the population in the upcoming months and years, reflecting the growing interest in sustainable mobility.
