The trend: Prices for used hybrids and EVs are surging in a trend that won’t fizzle anytime soon.
- Average YOY used car prices in March spiked 40.5% for hybrids, 36.3% for EVs, and 29.6% for vehicles with other fuels types, per Torque News. The Hyundai Sonata Hybrid—one of the few cars with rooftop solar sold in the US—topped the charts, making a 63.9% leap.
- The Nissan Leaf, once the vehicle with the highest depreciation in the US, increased by nearly 50% in value YOY, according to Torque.
- There are reports of used EVs appreciating in value: A Tesla Model 3 bought for $39,000 in 2021 has gained between $10,000 and $16,000 in value, according to a report from Recurrent cited by Wired. Teslas make up 66% of the 2021 used EV inventory.
More on this: While the used EV market’s popularity might be a surprise, it’s an extension of what’s happening in the used car market overall, with walls closing in on all sides from chip scarcity, supply chain snarls, battery mineral shortages, inflation, and wallet-busting gas prices.
- Overall, new car prices ticked down slightly by 0.3% from February to March, per Wired. Yet new EV prices increased by 1.8% in that time frame, with hybrids rising by 8.6%.
- This underscores the effect of shortages of battery minerals like nickel and cobalt, restraining production and driving up prices just as consumers flock to electric to avoid the gas pump.
- Shocked by new EV sticker prices and often facing wait lists, buyers look to the used market only to find enormous price hikes that are likely to endure due to a backlog in new deliveries.
What’s next? The future holds more pain for those looking to buy EVs, while owners can flip their vehicles for a profit. Owners can also bask in the long-term value outlook as a new study showed that most (newer) EVs retain about 90% of their charging capacity after 100,000 miles, per Inside EVs.
- Buyers can anticipate leaving dealerships empty-handed as people seek out electric in preparation for gas-free summer vacations.
- For automakers, the competitive angle will be who can bring EVs to market fastest, with Honda promising a “supercharged production process.”
One solution: As batteries are the most expensive component of EVs, developing solid-state battery alternatives that don’t contain expensive nickel or cobalt, which are in short supply, could drive down prices and speed up production.