Used EV prices record growth for the first time
Used EV prices record growth for the first time in over a year as demand overtakes supply
Wednesday 18th September 2023, London – According to the Auto Trader Retail Price Index, after 12 consecutive months of contraction, the average retail value of a used electric vehicle (EV) has increased 0.8% so far in September[1] on a month-on-month (MoM) and like-for-like basis. With a current average price of £32,463 it marks the first MoM growth since August last year. Prices continue to be back on a year-on-year (YoY) basis, but the rate of decline seems to be stabilising, easing from -22.6% YoY in August to -21.4% so far this month.
In terms of traditionally fuelled cars, petrol values have also grown slightly this month, increasing 0.1% MoM, whilst diesel prices are down -0.7%. On an annual basis however, both petrol and diesel prices have recorded growth, increasing 3.4% and 2.4% YoY respectively.
The increase in used EV prices is being fuelled by improving market dynamics, with levels of consumer demand outpacing supply levels on Auto Trader for the first time since July 2022. In fact, the rate of demand growth this month is up 87.4% YoY, which is the highest rate of growth ever recorded. And whilst the volume of used EVs entering the market is still exceptionally strong, up 77.7% YoY, it’s at its lowest rate of growth since September last year.
This readjustment of levels of supply and demand is not only stimulating growth, but also supporting greater profit opportunities within this segment of the market. Accordingly, Auto Trader’s Market Health[2] metric for second-hand EVs is up 5.4% YoY so far this month, marking the first positive uptick in 14 months.
The drop in average EV prices is rapidly closing the upfront price gap between many electric models and their ICE counterparts, and in some cases, has already made them cheaper. For example, a 3-year-old petrol Renault Clio currently costs £13,163, whilst its electric counterpart, a 3-year-old Renault ZOE, currently costs £12,550. There are similar examples at the other end of the market, with the all-electric 3-year-old Jaguar I-PACE (£30,757) costing almost £4,000 less than a 3-year-old fossil-fuelled Jaguar F-PACE (£34,589).
Commenting, Richard Walker, Auto Trader’s data and insight director, said:
Although it’s still early days, it’s positive to see that after more than a year of contraction, the market is beginning to see green shoots emerge in used EV pricing. With the continued ‘de-fleeting’ of circa 750,000 electric vehicles sold over the last three years it’ll be some time before the market reaches maturity, but with clear signs of prices beginning to stabilise, the industry should have more confidence in the profitability of second-hand electric cars.
Younger cars experiencing slower overall pricing growth.
Although slowing, the volume of electric vehicles entering the second-hand market remains high, and with prices continuing to soften on a YoY basis, the combined effect is contributing to the overall easing of used car prices. At an average of £17,823, retail prices are up just 0.7% YoY so far this month, which is down on the 1.1% recorded in August. Prices have also contracted overall MoM, albeit by just -0.2%. However, it’s worth highlighting that current values remain exceptionally strong, 36% above the same period in 2021, and 45% above pre-pandemic levels in September 2019.
Contrary to some reports, this overall figure is masking what remains a buoyant used car market, with pockets of demand and therefore profit opportunities available. In fact, looking beyond the headlines reveals a very nuanced market, with significant variances in supply and demand dynamics fuelling disparities between vehicle age cohorts and fuel types.
As an example of this trend, the prices of younger age cohorts, such as those aged below 12 months, are down -1.5% so far this month because of supply levels (44.3% YoY) outpacing the otherwise strong levels of demand growth (33.6% YoY), while older vehicles are outperforming the overall market. In fact, current values for those cars aged between 10-15-years-old are up 10.9% on September last year, which is the highest rate of price growth since January and underpins the importance of utilising data to look beyond the headline figures to identify profit opportunities.
Top 10 used car price growth (all fuel types) | September MtD (up to 14th) 2023 vs September 2022 like-for-like
Top 10 used car price contraction (all fuel types) | September MtD (up to 14th) 2023 vs September 2022 like-for-like
-ENDS-
About the Retail Price Index
The Auto Trader Retail Price Index (RPI) is published monthly and provides an overview of the latest price and search data from our marketplace. Our team of data scientists monitor circa 800,000 vehicles each day, including 116,000 vehicle updates and an average of 39,000 vehicles added or removed from Auto Trader. Coupled with data from circa 450,000 trade car listings every day, as well as additional retailer forecourts and website data (OEM, fleet and leasing disposal prices and pricing data from over 3,000 car dealership websites and data from major auction houses across the UK), ensuring the Index is an accurate reflection of the live retail market.
About Auto Trader
Auto Trader Group plc is the UK’s largest automotive marketplace. It is listed on the London Stock Exchange in March 2015 and is a member of the FTSE 100 Index.
Auto Trader’s purpose is Driving Change Together. Responsibly. Auto Trader is committed to creating a diverse and inclusive culture, it aims to build stronger partnerships with its customers and use its voice and influence to drive more environmentally friendly vehicle choices.
With the largest number of car buyers and the largest choice of trusted stock, Auto Trader’s marketplace sits at the heart of the UK car buying process. That marketplace is built on an industry-leading technology and data platform, which is increasingly used across the automotive industry. Auto Trader is continuing to bring more of the car buying journey online, creating an improved buying experience, whilst enabling all its retailer partners to sell vehicles online.
Auto Trader publishes a monthly used car Retail Price Index which is based on pricing analysis of circa 800,000 unique vehicles. This data is used by the Bank of England to feed the broader UK economic indicators.
For more information, please visit: www.plc.autotrader.co.uk
For all media enquiries, please contact:
Andrew Nankervis | Andrew.Nankervis@autotrader.co.uk 07720 896760
[1] As of 14th September 2023
[2] The Market Health metric shows the ratio of supply vs demand compared to the previous year.
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