Climate change is a priority issue for nation-states around the world, with public opinion also aligning towards action against global warming; in the UK alone, three-quarters of citizens have made conscious lifestyle changes to that end. Industries are doing their part in their own way, with technological leaps fuelling new products and processes enjoying high consumer demand.
One of the more significant recent leaps has been in the automobile industry, through the rise and rise of electric vehicles (EVs). However, the prices of used EVs have started to plummet – causing equal levels of concern and interest among retailers and buyers alike.
EVs vs Fossil-Fuelled Cars
According to recent data on second-hand vehicles, the majority of vehicles that saw the biggest falls in market value were EVs – with three-year-old EVs up to 30% of their market value in comparison to the year prior. This is a significant dip in comparison to conventional, fossil-fuelled vehicles. One of the primary reasons behind this is the increase in supply.
High demand for EVs drove fast development and manufacture of new models; yearly releases, and profound improvements in the quality of EV manufactured, have led to a market saturated with older, sub-par used EVs, causing a decline in prices. The impact of market saturation remains to be seen from a manufacturer’s perspective, but the low cost of used cars with plug-in technology is a boon for retail buyers hoping to make the switch.
Which Manufacturers Have Suffered the Most?
Several EV models have suffered significant losses in value in recent months, but the most impacted model of all appears to be the Tesla Model S, which experienced a drop of around 30.7% year-on-year. The Tesla is a unique example though, with issues regarding poor build quality surfacing alongside the eccentric behaviour of Tesla CEO Elon Musk.
Other models that have lost significant value include the BMW i3, Nissan Leaf, and Renault Zoe. The Nissan Leaf is another understandable vehicle to suffer market value depreciation, being one of the first EVs to market and an early ‘prototype’ for today’s much more advanced and efficient models.
However, not all EV models have suffered the same fate. Some models, such as the Kia e-Niro, have held their value relatively well. The main reason for this is the high demand for these models, which has kept prices stable.
For retailers of used cars, this decrease in value has resulted in reduced profits and increased competition – though sales volumes are expected to increase significantly. As zero-emissions deadlines loom for the industry, the shift over to EV production and sale is an extremely tangible one; the price drops, even if for older and less reliable models, may well be a blessing in disguise for an industry that needs to manufacture more consent for a new era of automotive design.