After a year of remarkable price increases, used car prices, including electric vehicles, are showing signs of deceleration and beginning to decline, according to battery analytics firm Recurrent.
Recurrent, which reports on the battery health of used electric vehicles, tracks the prices of specific electric vehicles from model years 2017 to 2019. The average price of these models decreased by 2.9% since July, reaching $37,597.77, according to the analysis.
It’s important to note that this average is based on a handful of currently popular models in the market. Updated annually, the list currently includes the 2017 Chevrolet Bolt EV, 2017 BMW i3, 2017 Tesla Model S, 2018 Nissan Leaf, 2018 Honda Clarity, 2019 Audi E-Tron, 2019 Tesla Model 3, and 2019 Volkswagen E-Golf, as well as the 2018 plug-in hybrid BMW 530e.
Recurrent’s Used Electric Vehicle Price Index as of October 2022
When considering all used electric vehicles, average prices have not decreased. The current average stands at $42,700 and has hovered just above $42,000 since March. This is higher than the average price of $33,957 for a used internal combustion engine (ICE) car, but the average age of used electric vehicles is only four years compared to 6.47 years for ICE vehicles, noted Recurrent.
However, these prices are not promising for buyers looking to take advantage of the used electric vehicle tax credit, introduced under the Inflation Reduction Act (IRA). The legislation offers a credit of up to 30% of the original purchase price of a vehicle (capped at $4,000) but comes with a price limit of $25,000. Only 12% of the current inventory of used electric vehicles is listed for less than $25,000, according to Recurrent.
The IRA also stipulates that used electric vehicles must be at least two model years old to qualify for the tax credit, but that is likely not a factor as these newer vehicles already tend to exceed the price limit, said Recurrent. They added that older electric vehicles and plug-in hybrids, which may still qualify for a tax credit based on battery pack size, will receive most of the credits.
Used electric vehicles currently priced under $25,000 should remain stable in market value from now until the start of the new electric vehicle tax credit in January, anticipated Recurrent CEO Scott Case in a statement, adding that most price reductions have been in more expensive used electric vehicles.
Meanwhile, there may be good news in new electric vehicle prices. Recurrent noted a surge in used Tesla prices in January, following price hikes on new Teslas. Several months have passed since the significant price increases for Tesla, while many other electric vehicles that have seen recent price increases, such as the Ford F-150 Lightning, are still not widely available.
Prices for various electric vehicles have not increased significantly. The Nissan Leaf has remained stable, and General Motors has even lowered prices for the Bolt EV and Bolt EUV.
The volatility of electric vehicle prices is starting to concern automotive executives. Stellantis’ Chief Manufacturing Officer, Arnaud Deboeuf, warned in July about the “collapse” of the market if electric vehicles were not made more affordable, while Ford CEO Jim Farley said in June that he anticipated an electric vehicle price war.
