May 14, 2024 - Technology

Used EVs pick up steam

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Illustration: Tiffany Herring/Axios

Electric vehicles accounted for 4.3% of sales on used car sales platform Carvana in the first quarter of 2024 — up from 1.8% in the same period last year.

Why it matters: It's another sign that there's finally a decent market for used electric cars — important for the overall EV transition, as new electric models still tend to be prohibitively expensive for many would-be buyers.

Follow the money: EVs' average selling price on Carvana dropped 16% year over year in Q1 2024, falling from $37,000 to $31,000.

  • That's still pricey, but much less than $50,000-plus for your average new EV.
  • The EV premium — that is, the average price differential of used EVs compared to their internal-combustion counterparts — fell from $13,000 to $7,000, Carvana says.

Zoom in: EVs made up the biggest share of Carvana's total Q1 2024 sales in Washington, D.C. (11.9%), California (9.6%) and Washington (8.9%) — numbers that generally mirror other measurements of EV adoption by state.

  • And they cracked 4% of total sales for the first time in Florida (5.2%), Arizona (5.2%), Montana (5.1%) and more.

Caveat: Carvana represents only a slice of overall used car sales, so its data is best understood as a reflection of broader trends.

Between the lines: A credit of up to $4,000 for used electric and plug-in hybrid vehicles is making previously owned EVs even more affordable, Carvana says.

  • The Nissan Leaf, Tesla Model 3 and Chevrolet Volt were the company's top-selling credit-eligible models in the first quarter of 2024.

What they're saying: "The significant, multi-year growth in new EV sales is a leading indicator of the potential of the used EV market," Carvana CEO Ernie Garcia said in a statement.

  • "As a larger selection of EVs makes its way into the used fleet, prices normalize and tax credits become available, more used car buyers will have the opportunity to access the EV category."

Reality check: EVs made up less than 1% of all used car sales in 2023, Carvana notes based on Kelley Blue Book and MarketCheck data.

The bottom line: The rising popularity of used electric cars at more affordable prices underscores why so many automakers are scrambling to introduce cheaper EVs amid a slowdown in electric sales growth.

Editor's note: Cox Enterprises, which owns Kelley Blue Book through Cox Automotive, also owns Axios.

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