Prices of used electric cars approach ICE equivalents

EVs will make up 6% of used car parc by 2027, petrols 62%

The average two- to four-year-old EV is now worth £16k, while the equivalent diesel is £18k

Values of used electric cars are reaching parity with equivalent petrol and diesel models, new data has revealed.

First-quarter data from Manheim Auctions showed an average trade price of £16,654 for a two- to four-year-old EV, compared with £18,063 for an equivalent diesel car – a 7.8% difference.

Comparable petrol cars sold for £12,980 – 28.3% less than EVs and 39.2% less than diesels. EVs were still much more expensive when compared with ICE cars across all age groups, averaging £16,829 in the first quarter next to diesel’s £6051 (-64.0%) and petrol’s £6108 (-63.7%).

However, this was disproportionately weighted by newer, more expensive EVs, while two- to four-year-old cars represent prime used stock for franchised dealers.

Used EVs have traditionally been more expensive than their ICE equivalents, deterring many buyers, but prices began to drop sharply in late 2022, and values of contemporary examples are now typically much closer to their ICE equals.

In quarter one of 2022, when used car values were much stronger overall, the average trade price was £21,302 for an EV, £19,930 (-6.4%) for a diesel car and £15,728 (-26.2%) for a petrol car, according to Manheim. “Petrol and diesel [car prices] are remaining fairly firm,” said Philip Nothard, insight director at Manheim’s parent firm, Cox Automotive.

“We’re at this place now where EV [values] are coming down but at the same time petrol and diesel [values] are stabilising.

“As [models] become rarer and rarer, the prices start to firm up. So you actually get a strengthening of ICE products as EVs come down. You get this price parity by default of the two movements. That’s kind of how we see the market playing out in time.”

Cox expects only a modest shift in the fuel mix of the UK used car parc during the next four years but stressed that the ICE share will increasingly be from ageing models.

The share of diesels (including mild hybrids) is expected to fall by 3% to a 30% share between 2024 and 2027, leaving it 14% down on the 2020-2023 car parc.

The share of petrols (including mild hybrids) is predicted to be relatively static but actually increase by 1% to 62% (the overall used car market is forecast to contract by 1.1%), leaving it 0.2% down on 2020-2023.

The share of EVs is tipped to rise by 2.5% in 2024 to 5.9% in 2027, up 184% on 2020-2023. The share of hybrids and plug-in hybrids is expected to rise by 1.0% to 2.8%, up 110% on 2020-2023.

Nothard recommended that dealers be mindful of diminishing ICE car supply and cautioned of further volatility in used EV prices, due to the introduction of cheap new models from brands such as BYD and Dacia, as well as sporadic price cuts by Tesla.

“Savvy dealers, if they haven’t already, need to give their stock profile serious consideration, especially as the ICE car parc is ageing year on year,” he said. “That trend is impacting availability and choice in vehicles up to four years old.

“Retailers should consider how their forecourt looks now: what percentage of it is ICE and how will that look in the years that follow? Can that profile be sustained when the availability of ICE vehicles is shrinking at a rate of 10-16% a year?

“There are also things happening in the marketplace that you have very little or no control over, like Tesla reducing its prices.”