Consumer demand for used EVs is rising

Demand for used electric vehicles surged a massive 81.5% YoY in February, which, combined with a -1.1% fall in supply, drove a whopping 83.6% increase in Market Health, according to recent data published by Auto Trader.

At the same time, demand for used petrol cars (6.2%) was only just ahead of supply (5.6%), resulting in a conservative 0.6% increase in Market Health.

This positive news for EVs was in stark contrast to a small-scale research item of 66 independent used dealers published recently that suggested  that ‘half of used motor dealers are reluctant to buy second-hand EVs.’

Appreciating the market dynamics over the last 16 months and the absolute agility of dealers is needed to understand the position.

Early last year, the supply of EVs exceeded demand for the first time, and that supply/demand trajectory continued upward for most of the first six months of the year. Supply was driven by the rapid growth of EVs over recent years, notably to fleets, as they entered the remarketing cycle.

In the second half of 2023, EV values started to approach price parity with petrol and diesel cars and demand picked up; they found their price level. Since then, the supply/demand equilibrium stabilised until February’s dramatic growth.

Consumer demand is picking up, petrol and diesel prices are rising, electricity will fall in April, there is greater awareness and confidence in EVs, and many people are keen to be greener if they can afford it.

So why won’t dealers stock EVs? I suspect this is primarily based on some ‘bruising’ taken last year when values fell. Certainly, there are some EV sceptics in the dealer community, but all my experience suggests that once demand for EVs rises, and we must accept that used EVs still have a modest market share, dealers will start to stock them. Growth will inevitably happen as new battery electric vehicle (BEV) sales begin to rise, and based upon the Zero Emission Mandate, this year, a little over one in five new cars will be a BEV.

Debbie McKay, Commercial Sales Director