Chip Shortage And Fewer New Cars Making Used EV Prices Skyrocket

The smaller inventory of used electric cars also contributes to this phenomenon.

By: Gustavo Henrique Ruffo

May 6, 2021 at 1:03pm ET

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Supply and demand laws always work. If you do not have the option to buy what you want, you’ll inevitably try to find the closest thing to that. If that product had a low price, it would inevitably increase with more demand. With a lack of new cars due to chip shortages, that means you’ll consider a used one. According to Green Car Reports, this is part of the explanation for the price increase used EVs are experiencing in the US.

Another important factor is the smaller inventory of these vehicles. According to Cox Automotive, while regular cars have a retail supply for 44 days, electric vehicles have a supply for 29 days. Cox Automotive also said sales of electrified vehicles are overtaking those of regular cars. While they were only 4.8 percent in the first quarter of 2020, they are not 7.8 percent of all car sales. That clearly shows people are willing to buy more electric cars in the US than they were before.

Green Car Reports also talked to Recurrent, a company that plans to assess how healthy battery packs are in used electric vehicles, giving buyers with no idea if they should buy them or not the possibility of a better-informed decision. According to that company, used car prices are about $1,500 higher. For cars made before 2019, the values are on average $1,200 higher.

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Perhaps one of the most interesting findings of the article is how different prices between states are. But, at the same time, it is one of the most obvious in a country where EVs are only starting to be sold in all states.

Predictably, California is where EV prices are more attractive to buyers and worse for sellers: it is a matter of volume and competition. What is not obvious is that the lowest prices for a Tesla Model 3 are in Texas. In this case, that probably has to do with lower demand for it there. The same happens with the Nissan Leaf in Washington. If you have any guess about why that happens in that state, please share it with us below.

Source: Green Car Reports