Battery degradation is one reason for the rapid decline in electric car prices. This makes the operation of electric cars less attractive, as the price difference between CNG cars and EVs increases dramatically over time.
Used electric car prices were on average 25% higher last year.
The average used car transaction price remains significantly higher than it was before the COVID-19 pandemic. However, not all vehicles retain their value equally. According to a new study by iSeeCars, the price gap between used petrol/diesel and electric cars is widening.
In May 2024, the average price difference between used electric and LPG cars reached 8.5%. The average price of a used electric car last month was $28,767, while the average price of a gasoline car was $31,424.
This is a significant drop from last year, when used EVs were 25% more expensive in June 2023, or $8,000 more on average than their gasoline counterparts. At the time, the average price of an electric car was $40,783, while gasoline cars cost $33,469.
According to iSeeCars, EV prices fell steadily until the middle of last year, leveling off in the last few months of 2023 before starting to fall again in February.
The average price of used gasoline cars has no such fate. They are priced around $31,000 for the year and have actually increased in price by around $375 between February and May 2024.
This trend is also reflected in the price difference between the Tesla Model 3 and the BMW 3 Series. Last June, a used Model 3 cost $2,635 more than a used BMW 3 Series. Eleven months later, the Tesla's price is $4,806 less than the BMW.
The study also found that electric vehicles were among the top seven used cars that saw the biggest price drop over the past year.
There are currently many unknowns surrounding electric vehicles. Sales are slowing, prices are falling, and competition is increasing around the world as automakers wonder what cars to make to meet people's needs.
Low resale value can negatively impact EV adoption as consumers continue to evaluate whether these vehicles fit their lifestyles.
A car is often a person's second largest purchase after real estate, and most are unwilling to take the risk of purchasing an EV. The iSeeCars study analyzed more than 2.2 million used cars between one and five years old sold between May 2023 and May 2024.