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Power Transportation

America's Used EV Price Crash Keeps Getting Deeper (cnbc.com) 613

Long-time Slashdot reader schwit1 shares CNBC's report on the U.S. car market: Back in February, used electric vehicle prices dipped below used gasoline-powered vehicle prices for the first time ever, and the pricing cliff keeps getting steeper as car buyers reject any "premium" tag formerly associated with EVs.

The decline has been dramatic over the past year. In June 2023, average used EV prices were over 25% higher than used gas car prices, but by May, used EVs were on average 8% lower than the average price for a used gasoline-powered car in U.S. In dollar terms, the gap widened from $265 in February to $2,657 in May, according to an analysis of 2.2 million one to five year-old used cars conducted by iSeeCars. Over the past year, gasoline-powered used vehicle prices have declined between 3-7%, while electric vehicle prices have decreased 30-39%.

"It's clear used car shoppers will no longer pay a premium for electric vehicles," iSeeCars executive analyst Karl Brauer stated in an iSeeCars report published last week. Electric power is now a detractor in the consumer's mind, with EVs "less desirable" and therefore less valuable than traditional cars, he said.

The article notes there's been a price war among EV manufacturers — and that newer EV models might be more attractive due to "longer ranges and improved battery life with temperature control for charging."

But CNBC also notes a silver lining. "As more EVs enter the used market at lower prices, the EV market does become available to a wider market of potential first-time EV owners."
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America's Used EV Price Crash Keeps Getting Deeper

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  • by locater16 ( 2326718 ) on Sunday June 23, 2024 @02:49AM (#64570467)
    Last years tech clickbait: California something something
    This years tech clickbait: EV Bad, EV bad!
  • by shilly ( 142940 ) on Sunday June 23, 2024 @04:09AM (#64570521)

    So it turns out that the actual story here is that EVs are getting much much cheaper:
    - New EVs are seeing prices fall while range etc improves, due to increased competition
    - Used EVs are seeing prices fall as a second-order effect, and as supply volumes increase dramatically

    The result of this is going to drive us to purchase cost parity much faster than would otherwise have happened, and that will drive faster adoption.

    The thing that's most likely to weaken all this is tariffs reducing the price signals.

    • by Savage-Rabbit ( 308260 ) on Sunday June 23, 2024 @04:56AM (#64570561)

      So it turns out that the actual story here is that EVs are getting much much cheaper:
      - New EVs are seeing prices fall while range etc improves, due to increased competition
      - Used EVs are seeing prices fall as a second-order effect, and as supply volumes increase dramatically

      The result of this is going to drive us to purchase cost parity much faster than would otherwise have happened, and that will drive faster adoption.

      The thing that's most likely to weaken all this is tariffs reducing the price signals.

      It's not just about supply volumes. The value of EVs falls rapidly because each new generation has far better range than the previous one which makes the previous generation far less interesting. I'd expect this to be less of a factor in countries with denser, more advanced and developed charging infrastructures than the USA but it is and will remain a factor. Another factor is anxiety over the expense of replacing the battery. Nobody is thrilled at the idea of buying a used EV whose battery is about to go out of warranty and then possibly being stuck with replacing the thing at a price tag well north of $10k because the battery pack is just worn out, because it is not rated for driving through puddles deeper than 20 cm (Tesla), because a rock dented the battery pack (Hyundai), the manufacturer did not fit the battery pack with a thermal management system and you can't get a replacement battery pack at non-extortional prices except salvaged from a crashed vehicle (Nissan) etc, etc, ad nauseam. These are not such an issue on ICE cars who have benefitted from 100 years of development rooted in operational experience but none of these issues with EVs are an unsolvable problem either.

    • Re: (Score:3, Insightful)

      by Luckyo ( 1726890 )

      That's the really positive take. Reality is way worse.

      Rich still buy their luxury cars. But there's less rich people now because of demographic decline and all the small economic shakeups that are happening across the economy.
      Middle class finances their cars in part by selling the old car and in part by a loan. If they bought an EV, they're fucked, so they're keeping it longer, or going for a cheaper ICE/PHEV/HEV car instead. And inflation is high, so they can no longer afford an EV.
      Lower class buys used ca

      • But there's less rich people now because of demographic decline and all the small economic shakeups that are happening across the economy.

        This is the biggest load of bullshit I've read this morning. https://ips-dc.org/total-u-s-b... [ips-dc.org]

        The rich are making out like bandits.

    • by eepok ( 545733 ) on Sunday June 23, 2024 @09:39AM (#64571131) Homepage

      Disclaimer: I work in sustainability at a very large public university. It's my job to help people live/work with less impact on the environment. These aren't ravings of a madman.

      There are negative influences as well.

      1. Used EV prices are falling because people tend to turn them in after their battery packs (fuel tanks) have reduced capacity. The Tesla Model S, for example, loses around 10% of its maximum range every 100,000 miles. If it started with a 300-mile range, it will be able to travel a maximum of 270 miles on a full charge after 100,000 miles. They're actually worth less not just because of general wear and tear, but because the "fuel tank" has shrunk and regaining range requires a $12,000+ investment.

      2. People are learning about the very high cost of EV tires as compared to tires on an ICE vehicle. EVs are heavier and require more strict fuel efficiency strategies to squeeze every mile out of a kWh of electrical power, so they need to have atypically low rolling resistance while being able to stand up to more friction. Additionally, manufacturers found that since there's no engine noise, passengers perceived regular tires as being REALLY loud and thus EV tires had to be quieter. So they're more expensive AND they wear out quicker.

      3. What used to be free/subsidized and abundant public/workplace/school charging for the very limited number of EV drivers is shifting in reliability. All of those distributed charging locations (ChargePoint, EVGo, Blink, etc.) are in financial distress because people are finding out that having EVERYONE be a "gas station" and giving away fuel as an amenity is an financially unsustainable liability. Public EV chargers range from unreliable to non-existent. I sucks to say it, but there needs to be some centralized EV charger management companies (not just EVSE sales companies) ensuring that clusters of EV chargers stay functional, well lit, and safe. There's even an argument that EV charging locations should be required to make restrooms available. You know... like gas stations.

      4. Where people tend to buy EVs (California), the cost of electricity is skyrocketing (infrastructure and fair wages are expensive!) and the financial savings of electricity as fuel as almost zero today. When gas costs $5.00/gallon and electricity costs $0.36/kWh, you're better off with a Toyota Prius Prime (PHEV) than an pure battery EV. AND THAT'S IF YOU'RE CHARGING AT HOME. If you expect to charge in public in 5 years, you have to anticipate all of the costs of construction (trenching, transformer, panel, EVSE, maintenance, software, etc.) being encumbered on the cost and you should expect at LEAST $0.40/kWh.

      This information is becoming more commonplace so when people who might actually be in the market for a used car look back at everyone saying, "EVs are more expensive up front, but you save money in the long run," it's not really penciling out in their own calculations.

      • by shilly ( 142940 )

        Those may not be the ravings of a madman, but they are nonetheless evidence-free parochial assertions.

        1. Find me a single half-decent study showing average 10% degradation for 100k miles for a Tesla Model S. And it makes no sense to talk of a starting range of 300 miles. A Model S has between 350 and 400 miles of range when new, depending on configuration. And the average US car will be driven for nearly *seven years* before it reaches 100k miles. Noone expects a 7 year old used car to be as good as a brand

    • Everything you said plus:

      - Most EV's are fundamentally 6-year vehicles. The market has caught on to the fact that the value depreciation of a used EV is much steeper than that of an ICE combustion engine vehicle.
      - The Hertz fire sale not only initially failed to account for the above, but also made splashy headlines with people who purchased some of these cars winding up with large unexpected repair bills bringing attention to risks that used EVs have that ICE cars do not have.
      - After Hertz anot
  • When digital cameras came on the market they were way more expensive than traditional film cameras and they certainly weren't better but they had their niche. Then they improved very quickly, so quickly that some brand had a new model every 3 months, way better than the previous model (double the resolution, double the storage, half the speed, etc...), so much so that there was basically no used market at all, cameras were worthless after just 3 months, even if hardly used. This pissed off a lot of early adopters. It also depleted the film camera aftermarket. A used camera magazine I know stopped publishing their price estimates for a decade. And then, after a decade the technology matured, the prices stabilized, new models are only slight improvements over old ones and nobody uses film cameras anymore...
    The same is happening to the EV market. It's gonna be a rough decade.
    • by Luckyo ( 1726890 )

      That's a hell of a freudian slip of analogy.

      Digital cameras became a thing because they offered the following benefits:

      Immediately show the image taken, rather than have to go and develop the entire film.
      Ease of storage, and other similar conveniences when it comes to media taken.

      Whereas film had the advantage of quality of pictures taken until very recently.

      Analogy maps quite well to digital being ICEV/HEV, as it's fast and easy to fuel up and just keep going, and not have to worry about the range with EVs

  • CNBC needs to stop pretending that good = bad just because good is bad for their paymasters.
    • by sinij ( 911942 )
      High cost of ownership, because depreciation is part of it, will prevent rational people from buying new EVs. It cost less to own 80K ICE truck that you can sell for 60K in 4 years than 80K EV that you can sell for 30K in 4 years.
      • by Rhys ( 96510 )

        Rational people don't own a bought-new car for 4 years. They own it till the wheels fall off -- or at least until reliability/maintenance becomes an actual problem (as opposed to an excuse). And they for sure don't lease it.

  • Who wants to buy a used EV anyway ?? Puts you closer to paying for a battery replacement and your mileage is now lower than a new one ! You can try to justify buying one, BUT common sense should tell you no !
    • Who wants to buy a used EV anyway ?? Puts you closer to paying for a battery replacement and your mileage is now lower than a new one ! You can try to justify buying one, BUT common sense should tell you no !

      At some point the juice becomes worth the squeeze. EV batteries, early Nissan Leafs and Renault Zoes aside, will do a good couple of hundred thousand miles just fine even if supercharged most of their life. They will drop in price to a point where for the types of journey you mostly do they'll make sense. Take the Vauxhall Corsa-E here in the UK. A friend has one and typically gets around 170-180 miles range when commuting from the same town I live in to the same place to work, using just over 1.5 times the

  • by sinij ( 911942 ) on Sunday June 23, 2024 @06:30AM (#64570685)
    When EV manufacturers charge new-car prices [vancouversun.com] for replacement battery, any EV they sell is mechanically totaled. This is priced in by the market with depreciation.
  • Tesla has so many unsold vehicles, you can see them from space [yahoo.com]. Thousands of vehicles sitting around with nowhere to go. Considering the build quality of Teslas, this can't be a good thing.

    • by ghoul ( 157158 )
      Maybe they can slow down production and deal with the build quality issues. Do the necessary machine upgrades and training. They have expanding like crazy. Also maybe actually pay Elon. He is working for free for the last 1 year and it shows. He has his focus on SpaceX. When Tesla actually starts paying him , he may start cracking the whip again.
  • by couchslug ( 175151 ) on Sunday June 23, 2024 @08:18AM (#64570933)

    Most vehicle sales are used not new and the market requires discounted high end/new vehicles to percolate downwards so normals can afford them. The more high end vehicles sell at discounts the closer they are to the common driver who may never buy a new car (paying off my homes was for example far more rewarding and a new vehicle is almost always a financially unwise purchase absent a wealthy buyer who already has land paid off and retirement funds maxed out to provide their desired net income.

    Not everyone is rich but nearly everyone needs a POV especially if they own a home and much more if they DIY to slash costs.

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