The used electric vehicle (EV) market is experiencing a notable shift, with prices finally showing signs of growth after a three-year decline. This turnaround is an intriguing development, especially considering the broader context of the used car market's resilience.
The EV Price Rebound
In June, used EV prices rose by a significant 1.6% year-on-year, reaching an average of £24,662. This growth marks a break from the previous 40-month period of decline, with prices stabilizing in May and now entering a phase of genuine expansion. What makes this particularly fascinating is the contrast with the overall used car market, which softened by 0.4% in June, in line with seasonal trends.
The rebound in used EV prices is being driven by a combination of sustained buyer appetite and tightening supply. Used EVs are selling faster than the overall market, with an average time on the market of just 25 days. This is a week quicker than the same period last year, indicating a growing demand for electric vehicles in the used car sector.
Age and Affordability: Key Factors
One of the most interesting aspects is the performance of older used cars. Cars aged 10 to 15 years saw the strongest price growth, with a 7.8% increase year-on-year. This segment, along with cars over 15 years old, is benefiting from constrained supply and affordability pressures. These older vehicles are becoming more appealing to buyers with tighter budgets, who are opting for slightly older premium models instead of newer, more affordable options.
Stock Opportunities and Pricing Discipline
For retailers, the key is not just having EV stock, but having the right stock. The data highlights the importance of understanding age, brand, and fuel type when it comes to identifying the strongest stock opportunities. Pricing discipline is crucial, as demand, supply, and values vary across segments. Retailers need to adapt their pricing strategies to reflect the live retail market conditions, ensuring they are not simply relying on cost-based calculations.
A Broader Market Resilience
The used car market as a whole continues to demonstrate resilience, with serious buyers remaining active despite external distractions like the summer heatwave and the World Cup. Transactions are stable, pricing is resilient, and the speed of sale is consistent. This market environment emphasizes the need for a nuanced approach to pricing and stock management, especially as the long tail of pandemic-era supply disruptions continues to impact certain age cohorts.
In conclusion, the used EV market's growth is a positive sign, indicating a potential shift in consumer preferences and market dynamics. As we move forward, it will be interesting to see how this trend develops and whether it signals a broader shift towards electric vehicles in the used car market.
