Buyers increasingly confident in used EVs
Electric vehicles (EVs) remain a tricky proposition from a remarketing standpoint. However, there is some evidence that professional buyers have growing confidence in the residual value of used EVs, especially the more recent models.
It's fair to say that used-car buyers remain wary of opting for a second-hand electric vehicle. Questions about the decline of battery life (and a resulting increase in range anxiety) in used EVs are the reason why they remain a niche interest on the used-car market.
This is one factor in why the EVs have such low residual values (RVs) – lower, in fact, than any other powertrain.
Another factor, ironically, is the great progress currently being made in EV technology. This means that EVs could be outdated – notably with respect to range - by the time they 'retire' from their first life.
Then there are the various government subsidies and other stimuli for buying a (new) EV – measures that typically don't apply to used EVs. This increases their unattractiveness to used-car buyers.
So far, only two exceptions prove this rule: Tesla and BMW, whose EVs retain high RVs because of the high prestige (and thus desirability) they command. In the case of the BMW i3, the manufacturer's own tightly-controlled remarketing strategy also played a major role in keeping the model's RVs high.
The longer-term prediction is that a tipping point will be reached around 2021 when EVs are predicted to achieve TCO parity with combustion-engine vehicles. That will lead to larger sales volumes and more attractive price points on the used-vehicle market.
But while low RVs sound like a good deal for customers, they could put manufacturers off, throwing up yet another roadblock against widespread EV adoption.
However, it now appears we may not have to wait until 2021 before EVs become a much more attractive second-hand proposition.
In the UK, vehicle auction house BCA is noticing a shift in professional buyer attitudes. Whereas professional buyers remain sceptical about older-model used EVs – for some of the reasons specified above – they are turning out to be a lot more positive about recent EV models.
“Buyers generally prefer younger, lower mileage (used EVs)”, said Stuart Pearson, the company's Remarketing chief. “(This is) mainly because of perceived worries about the reliability of the batteries as they get older, however as this is still an emerging market, many of these concerns are likely to be dispelled as more volume works its way through the system”.
In spite of frequent questions about the longevity of used EVs, “the reality is that the data available shows a genuinely positive picture”, Mr Pearson adds. And most UK dealers seem to take used EVs in their stride: “(They) appear to absorb EVs into their stock mix rather than specialise in this, currently, niche sector, albeit some specialist retailers are becoming established”.
According to Mr Pearson, demand for used EVs is steadily rising, in many cases faster than the volumes available. As a consequence, EV RVs are getting stronger and more stable. “The best prices will be achieved by targeting the right buyer base with the most detailed information”, he concludes.