Despite production challenges and a charging network that often still leaves a lot to be desired, the used electric car market is booming. Used EV sales in the first half of 2023 surpassed the majority of new EV sales, according to the latest market report from battery health and data startup Recurrent.
The company reports that in the first half of 2023, 140,000 used EVs were sold in the U.S.; that's more than even the total number of new Tesla Model 3s that were sold in the same time period if you can believe it. For context, a total of 200,520 new Model Ys are believed to have been sold in the first half of 2023.
In terms of other new EVs sold in the first six months of 2023, we have the Chevrolet Bolt coming in next at 33,659 units, followed by the Rivian R1T at 16,452 units and the Volkswagen ID.4 at 16,448 units. In other words, Tesla is still dominating the used EV market as well as the new one in the U.S.
"Used EV sales, as a segment, now dwarf the sales of every new EV model besides Tesla Model Y and 3," Recurrent said in its latest analysis of the situation. Moreover, "the used EV market is more affordable than any time in the past 2.5 years, while the mix of vehicles favors newer, longer-range models than ever before."
All of this is good news for consumers looking to purchase used EVs, as their prices are at their lowest since the start of 2021 and availability appears to be increasing. The average price of a used EV is now $27,800 in the US, falling 32 percent year-over-year. And Tesla has likely influenced this trend. The average price of a used Tesla Model 3 has decreased by more than $9,000 since 2021.
Several factors have contributed to the growth of used EV sales. For starters, the used EV inventory has grown threefold over the past three years, increasing from 11,000 vehicles in April 2021 to over 33,000 today. The share of pure EVs in this inventory has grown from 55 percent in 2021 to 73 percent today. The rest are plug-in hybrids.
Thirty percent of used EVs also qualify for the $4,000 federal clean vehicle credit, and obtaining the credit is about to become easier. From Jan. 1, 2024, customers will be able to transfer EV credits to a car dealer, lowering the vehicle’s purchase price instead of waiting till they file their tax returns the following year.
If you’re worried most used EVs are clunky old cars with degraded batteries, that’s probably not the case. Nearly 30 percent of cars in this inventory are less than two years old, and 45 percent of used EVs are three years old or newer. Yes, EV batteries degrade over time, but some owners have reported how the degradation rate can be negligible, even after clocking over 100,000 miles.
Tesla CEO Elon Musk said on X early this year that Tesla batteries last between 300,000-500,000 miles or 1,500 charge cycles. Most Model 3 and Model Y variants get a warranty of eight years or 120,000 miles, whichever comes first, provided that the battery capacity retention is over 70 percent – many owners have reported over 90 percent of battery capacity retention after 100,000 miles.
The developments indicate a positive outlook for the used EV market in the US as they seem on track to become more affordable and accessible to a broader segment of the population in the coming months and years.