Values of used electric cars are becoming more competitive with their petrol and diesel counterparts, according to data from Manheim Auctions. In the first quarter of 2024, the average trade price of a two- to four-year-old EV was £16,654, compared to £18,063 for an equivalent diesel car, representing a 7.8% difference. Petrol cars sold for £12,980, which was 28.3% less than EVs and 39.2% less than diesels. However, these figures were heavily influenced by newer, more expensive EVs. When looking specifically at two- to four-year-old cars, which are prime used stock for franchised dealers, the prices of EVs are now much closer to those of petrol and diesel cars.
This shift in pricing is a significant development in the used car market. Traditionally, used EVs have been more expensive than their internal combustion engine (ICE) equivalents, which has deterred many buyers. However, prices began to drop sharply in late 2022, and the values of contemporary EVs are now reaching parity with ICE models. In the first quarter of 2022, the average trade price for an EV was £21,302, compared to £19,930 for a diesel car and £15,728 for a petrol car. Philip Nothard, insight director at Manheim’s parent firm, Cox Automotive, noted that while EV values are coming down, petrol and diesel values are stabilizing. As ICE vehicles become rarer in the market, their prices start to firm up, leading to a natural convergence between the two segments.
Looking ahead, Cox Automotive predicts only a modest shift in the fuel mix of the UK used car market over the next four years. The share of diesels is expected to fall by 3% to a 30% share between 2024 and 2027, while the share of petrols is predicted to remain relatively static but increase by 1% to a 62% share. The share of EVs, on the other hand, is expected to rise by 2.5% in 2024 to 5.9% in 2027, representing a 184% increase compared to the previous period of 2020-2023. The share of hybrids and plug-in hybrids is also expected to rise by 1.0% to 2.8%, indicating a 110% increase from 2020-2023.
Nothard advises dealers to be mindful of the diminishing supply of ICE cars and warns of potential volatility in used EV prices. He mentions the introduction of cheap new models from brands like BYD and Dacia, as well as sporadic price cuts by Tesla, as factors that could affect the market. Dealers should consider their stock profile and how it aligns with the changing makeup of the market. As the availability of ICE vehicles decreases at a rate of 10-16% per year, it is essential for retailers to evaluate their forecourt and ensure it can sustain its profile.
