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The UK’s market for used electric vehicles is booming after a collapse in prices has left them as affordable as traditional petrol cars.
As early adopters of EVs shift to newer models, expanding the secondhand battery-car market, prices have fallen to the same levels as those for a wide range of used petrol cars, according to data from Auto Trader, the classified advertising website.
Level pricing was pushing more consumers to battery-run cars, driving secondhand EV sales up 63 per cent in the first half of 2024 compared with the previous year, the company said.
“We have reached that price parity point that bridges the affordability gap for the consumer,” said Ian Plummer, commercial director at Auto Trader.
With high prices being the biggest barrier to EV purchases, “once prices are the same, the consumer perception is that the vehicle choice is a very rational one and no longer dependent on the feeling of doing the right thing”, he added.
The prices of most used EVs listed by the company are at similar levels to their petrol equivalents, while some are cheaper. For example, the average price of a two-year-old BMW 4 Series was £31,663 in June, compared with £25,958 for a Tesla Model 3 of the same age and £25,807 for a two-year-old Polestar 2.
Data from the Society of Motor Manufacturers and Traders (SMMT) suggests a similar trend to that found by Auto Trader, with EV sales across all dealerships and sales platforms in the UK soaring 71 per cent in the first quarter. The rate outstrips sales of new battery cars in the private market, which rose 9 per cent.
In the UK, nine out of 10 new cars are bought using a lease or similar agreement lasting three to four years, the average holding time of a new car. As the first wave of battery-run car owners come to the end of their agreements, the supply of secondhand cars has jumped across UK dealerships.
Although EV sales still account for only about 2 per cent of the overall used-car market in the UK, almost a tenth of secondhand vehicles under five years old put up for sale on Auto Trader’s platform are now fully electric, compared with under 1 per cent four years ago.
“This is definitely a market that is growing fast,” said Plummer. The cheaper costs of running EVs compared with petrol cars were also helping the popularity of used vehicles, he added.
The trend stands in stark contrast to the market for new EVs, where expensive battery-run vehicles have met with a sharp fall in demand growth.
New electric cars continued to be “very expensive” and “still positioned as a premium car in the minds of many consumers”, said Juan Felipe Munoz-Vieira, an analyst with JATO Dynamics, a data provider.
In the first quarter of this year, the average price of a new EV in the UK was £59,216, while that of a petrol car was £46,991, according to the data company.
The overall secondhand car market had also been buoyed by economic conditions, growing at the fastest pace in five years as would-be buyers had faced pressure on households finances, said Mike Hawes, chief executive of SMMT.
“What we are seeing is that demand is really there [in the used-EV market],” he said, adding that an increasing number of households were considering buying a secondhand EV as an option.
“If you are uncertain about buying a new car because it is too expensive, you tend to look elsewhere. If you want an EV, then buying it used is a way into the market that has become affordable,” he added.