How the Used Electric Car Market Is Taking Flight
In some respects, shopping for used electric cars is the same as shopping for any pre-owned vehicle. Models selling in high volumes straight from the factory dominate the used-car inventory; the most popular cars are scarce in used dealerships; and significant depreciation begins after three years of ownership.
Beyond that, the used electric car market departs from the familiar, other than the occasional cheap suit and standard Glengarry patter. Due to the limited sales run of many new EVs, the concentration of inventory on the West Coast, and factors like battery depletion, shopping for a used EV or plug-in hybrid is a unique experience. Looking at a Mojo Motors blog post on the subject, it is easy to see the vast majority of sales taking place since 2013. That makes the market both very young and relatively limited.
Here are four things to recognize in the budding market for used electric vehicles.
1. California and Washington dominate
Because of the efforts of the California Air Resources Board and the commitment of many state residents to green living, California is home to about half the country’s electric vehicles. Used EV shoppers are simply bound to see a higher concentration of models in and around the Golden State. In a search for used Leafs on the Mojo Motors website, consumers will find about one third of the options in California. The runner-up is Washington, where about one fifth of available used Leafs reside.
Once compliance vehicles like Chevy Spark EV, Fiat 500e, and Honda Fit EV hit the market, California residents will have an even better used EV selection.
2. Deals abound for a used Leaf
The Nissan Leaf starts in S trim with a MSRP of $29,010 and goes up to SL trim (MSRP: $35,120). After federal and state federal tax credits, the price drops as low as $20,000 in the base model. Based on these new prices, consumers in the hunt for a used Nissan EV will find seriously attractive deals, beginning with a 2011 Leaf SL with just 11,000 miles for $13,488 on the Mojo site. In about four years, used EV buyers take advantage of over 60% depreciation.
3. Battery depletion is not a major issue
Electric vehicle naysayers like to warn of the dire risks electric vehicle owners face with respect to lithium-ion batteries and power depletion. There are are at least two reasons why battery depletion is not a major issue on the used EV market.
First, Nissan guarantees its batteries to eight years or 100,000 miles (whichever happens first), so the best-selling vehicle in the segment is safe at least until then. Second, a study on the premium Tesla Model S showed the battery pack held 94% of its power after 50,000 miles. Based on the evidence and automaker-backed warranties, major battery depletion in EVs is a myth.
4. Model S and i3 retain value
Kelley Blue Book’s annual “best resale value” lists are respected for the research and care that go into the studies, but neither the Tesla Model S nor the BMW i3 were among the top three plug-ins for the 2015 model year. (Two Porsche plug-ins and the Fusion Energi were.)
Now a full year after i3 hit the market, there are no available used models for less than the MSRP minus federal rebate. The same is true for the Model S, which showed one 60 kWh 2013 model available in Illinois for $70,000. With a base price of $71,070 and $10,000 in credits available in select states, used consumers don’t gain much of anything by choosing a secondhand Tesla.
Maybe it’s time for KBB to isolate electric vehicles into their own class. We’d love to see the numbers on Model S resale value. Does 95% sound too high after three years of ownership?
Source for used car data: Mojo Motors.