Used EVs Sell for Bargain Prices, Putting Owners and Dealers in a Bind
Used EVs Sell for Bargain Prices, Putting Owners and Dealers in a Bind
https://www.windtaskforce.org/profiles/blogs/used-evs-sell-for-barg...
by Sean McLain at sean.mclain@wsj.com
Sharp value drop of pre-owned EVs stands in contrast to broader used-car market
Bloomberg (10/13/24) reports: "Germany’s Social Democrats, the party of Chancellor Olaf Scholz, is considering fresh subsidies on electric vehicles as a cornerstone of its economic policy ahead of elections next year.
The center-left SPD wants to boost EV sales by re-introducing a purchase premium for battery-powered cars, providing tax rebates for electric corporate cars, and putting EV quotas in place for leasing providers, according to a strategy document the party plans to adopt on Sunday that was viewed by Bloomberg.
Hertz in January 2024 dumped a large chunk of its Tesla fleet into the used-car market, further depressing values, analysts and dealers say.
The proposal comes as Germany’s auto industry struggles to adapt to the shift to EVs, amid intensifying competition from less expensive Chinese brands like BYD Co. as well as weaker demand.
Volkswagen’s deliveries of battery-powered cars fell 12% in Europe last quarter, extending a downturn this year after Germany and other EU countries removed state subsidies for buying EVs, which are much more costly than their combustion-engine equivalents.
Germany’s carmakers are also grappling with weaker sales in China, where a protracted real estate crisis has cut into luxury spending and domestic EV producers have gained the upper hand.
BMW AG and Mercedes-Benz Group AG recently warned that the slowdown in China will hit profits this year."
.
Updated Oct. 14, 2024 12:02 am ET
.
Electric cars have gone from pricey purchases to some of the biggest bargains on the used-car lot, as resale values for the vehicles have plunged.
Two years ago, some used electric-car models were selling for as much or more than new ones , because of a supply-chain crisis that resulted in a broader car shortage.
Now, the dynamic has flipped.
Dealer lots are full of unsold EVs
Car companies—largely led by Tesla—have slashed prices on new models in an effort to sell them.
.
The discounts on new EVs have helped prop up flagging sales. Financing deals elevated Tesla’s global deliveries in the third quarter, reversing declines earlier in the year.
But the flood of discounts has caused prices for previously owned electric vehicles to plunge even more, adding to the challenges confronting the auto industry, as its big bet on battery technology continues to sputter.
.
In September, the average selling price of a three-year-old electric vehicle was about $28,400, (they have at most an 8-y life), less than of a gas-engine vehicle of the same age.
That was a 25% drop from the start of 2023, according to car-shopping website Edmunds.
The sharp fall in the price of pre-owned EVs stands in contrast to the broader used-car market, where values have stayed steady during the same period, according to the firm’s data.
The sharp decline in prices of used EVs could potentially broaden their appeal to budget-conscious buyers, analysts say.
At the same time, many current owners who paid a premium for their cars are now upside down on their loans, owing more than the car is worth.
Among the hardest hit are some Tesla owners.
.
The world’s top seller of EVs last year cut prices by as much as one-third on some new models in the U.S., leading other automakers to respond with their own markdowns.
On top of that, rental-car company Hertz in January dumped a large chunk of its Tesla fleet into the used-car market, further depressing values, analysts and dealers say.
Within the past year, the average list price for a used Model 3 and Model Y—Tesla’s most popular models—dropped about 25%, according to data from car-listing website CarGurus.
.
“Tesla kept reducing the price of the cars, which killed the used-EV market,” said Christian Lange, the owner of a 2018 Tesla Model 3, which he had purchased brand new.
In early 2023, the vehicle was valued at around $35,000, roughly equivalent to what he owed on his loan.
.
Normally, buyers gradually build equity in their vehicles as they make payments.
But the reverse happened to Lange, because sharp price reductions on new Teslas made his vehicle worth less than his loan.
At the start of this year, the value of Lange’s Tesla had dropped so much that it was worth $10,000 less than what he owed on his loan.
Frustrated with Tesla, Lange said he traded his Model 3 for a Kia EV9. Tesla didn’t return a request for comment.
.
.
As buyer interest in EVs has continued to decrease in 2024, automakers have become more aggressive with their sales promotions for new models, offering cheap leases and low-interest-rate financing deals that are sapping demand from the used-car lot.
Some brands are lowering payments on new EVs by applying a $7,500 tax credit available for such purchases directly to the lease deal.
.
As a result, the average monthly payment on an electric-car lease has fallen from $950 at the start of last year to $582 in August, according to Edmunds.
That figure would be roughly comparable to what one would pay each month on a loan for a $28,000 used EV, said Ivan Drury, the firm’s director of insights.
“The biggest competition for one- or two-year-old used vehicles is across the lot.
.
Leasing has quickly become the most popular method of buying a new EV. At the start of last year, 16% of electric-vehicle sales at dealerships were leases, according to Edmunds. Today, the figure is nearly 80%.
.
Auto executives admit they misjudged the market.
That miscalculation is taking a toll on the used-EV prices.
To limit supplies, car companies are pulling back on their ambitions, including reducing production and delaying expansion plans.
Some are also taking precautions with their EV leases to preserve resale values.
.
“We don’t want to end up in a situation where we’re just producing to a target, and the demand isn’t there,” said General Motors Chief Financial Officer Paul Jacobson on a call with analysts in July. “You’ve got residual value implications which stay with you for a long, long time.”
.
Prices in the pre-owned market have also been hurt by a new federal tax credit for used-EV purchases.
The $4,000 credit, introduced early last year, applies only to electric cars selling for under $25,000, a requirement that has led some dealers to cut the price to get under that amount, analysts say.
.
Dave Katarski, operations chief for Feldman Automotive Group, a large dealer group in Michigan, said his stores have been selling more than 200 used electric cars a month, a significant increase from a year ago.
The used-EV tax credit has helped stimulate interest among consumers, along with an influx of cheap Teslas previously owned by Hertz, he added. “We’re seeing a ton of people flock to them when they can afford them,” Katarski said.
.
There are also some troubling signs. An Edmunds study of EV trade-in values showed that in August, owners on average owed about $10,000 more than the car was worth—up from about $8,000 at the start of 2023.
.
The abrupt rise in electric-car leasing could also have longer-term implications, said Kevin Roberts, head of industry insights at CarGurus.
.
While helping to alleviate inventory buildups now, it is likely to result in a flood of used EVs returning to the market in two to three years.
This potential wave could put more downward pressure on prices, Roberts said.
Automakers and lenders, who own the leased vehicles, would be on the hook for any losses incurred by steeper-than-expected drops in resale values.
“There’s no positive way to put this,” said Edmunds’s Drury, adding that 77% of EVs from dealerships were leased. “The problem is those leased EV are coming back need to be be sold. If there were no EV subsidies, none of these chaos would be happening"
—Mike Colias contributed to this article.
by Sean McLain at sean.mclain@wsj.com
Views: 17
Comment
-
Comment by Willem Post on October 25, 2024 at 10:14am
-
Trump was a political neophyte stepping into the lion’s den of the Obama-leaning federal bureaucracy
Some of his “best” people turned out to be not his soul mates.
Trump is a creative developer/builder, a mover and shaker, as was his father, as are his sons, as are Musk, RFK, jr., Ramaswamy, etc.
The US needs such people near the top.A prosecutor is either out to get people to build her/his record cases for career purposes, or to make deals with lawyers to get people not convicted, for political purposes.
Harris hitched her body to a 30-y older, married, negro LA mayor to use his political machine to rise in politics in dysfunctional California, which Vermont, etc., are using as a role model.
Harris (dysfunctional “border czar”/Walz (tampons in boys’ bathrooms) are puppets, as are Biden/Harris, of open-border fame.
Biden in-the-basement, a 45-y fixture in DC, was finally removed as a broken puppet, because he could not manage a teleprompter, or a press conference, or a debate, already for several years.
The Democrat party elite summarily replaced him with Harris, who is even less capable than Biden.Someone recently asked me why I like Trump.
My answer was, I don't like a lot of things about Trump and Harris, but the Trump team is the better choice.
However, this election is not about choosing the most likable person.
This election is about voting between two vastly different ideologies.
This election is about voting for the country we want to leave our children and grandchildren.
The Trump team represents that future and has proven that they can deliver.
They are patriots to the core.
Trump served his country for 4 years without pay.
When someone says: "I can't believe you're voting for Trump". I simply reply, “I am not voting for the Trump team.”
I am voting for the First Amendment and Freedom of Speech.
I am voting for the right to speak my opinion and not be censored.
I am voting for secure borders and LEGAL immigration.
I am voting for election integrity to include mandatory, unforgeable, voter ID, everyone voting on Election Day (a National Holiday with Pay), no machines, only hand counting, as is done in almost all European countries, where final results are known within days.
I am voting for the Second Amendment and my right to defend my life and my family.
I am voting for the police to be respected and funded once again.
I am voting for law & order and an end to allowing protesters to trespass and burn our cities, destroying innocent small businesses. (Tim Walz)
I am voting for personal responsibility and the end of the revolving door where criminals are being put back on the street (Kamala Harris)
I am voting for the next Supreme Court Justice(s) to protect the Constitution and the Bill of Rights.
I am voting for a return of our troops from foreign countries and the end to America’s involvement in foreign conflicts.
I am voting for the Electoral College and for the Republic in which we live.
I am voting for the continued appointment of Federal Judges who respect/uphold the Constitution and the Bill of Rights.
I am voting for keeping our jobs to remain in America and not be outsourced all over the world - to China, Mexico, Canada, Europe, Asia, and other foreign countries.
I am voting for doing away with all of the freebies given to the illegals and not providing for the needs of the American citizens and homeless veterans beset by natural disasters (FEMA has no money, because FEMA spent it to fly and coddle illegals from all over to the US).
I am voting for the military & the veterans who fought for this country
I am voting to keep men out of women's sports and tampons out of boy's bathrooms (Tim Waltz).
I am voting for peace in the Middle East.
I am voting to fight against human/child trafficking.
I am voting for Freedom of Religion.
I am voting for increased STEM teaching (science, technology, engineering, mathematics), instead of pseudo-scientific indoctrination of our children.
I am voting for the future of my Country.
I am voting for my children and my grandchildren to ensure their freedomsAmerica is the greatest country in the world.
The reason so many want to immigrate here
Why would a cabal of extremist Democrats want to change it, if not for increased federal command/control?
I am voting for the Trump team.
I am voting for America.It is truly amazing how a small, extremist, socialist/communist, Democrat party cabal, with a weaponized federal government, press, and academia, etc., were able to subvert/brainwash the US people this much, for decades, in the land with the First Amendment.
It shows just how brainwashed most of Americans have been.
Those Americans, be they white, negro, hispanic, muslim, etc., are finally awakening from their Corporate Media-induced coma.
We need Trump to be elected by a huge landslide to MAGA the US.
The federal government must not be allowed to engage in any activities not specified in the U.S. Constitution.
That means no NPR, no US Education Department, no US Endowment for the Arts, no US Radio Free Europe, and many other similar activities.
All those activities, if they are to exist, are within the realm and jurisdiction of the Sovereign States.
The federal government would be so much smaller and so much more efficient, with help of RFK, jr. and Elon Musk.
My response to a recent email: Trump appointed 3 conservative judges to the US Supreme Court
These judges are highly qualified scholars of the history of the US Constitution; one of them teaches it in a Law School.Example: Regarding Roe vs Wade, a PRIOR Supreme Court had made a mistake, by asserting a woman has a legal right to an abortion.
Based on that erroneous ruling more than 30 years ago, various federal laws and rules and regulations were enacted and promulgated.
A national infrastructure of federally-$supported entities, involved with abortion, and reproductive issues, mostly staffed by Democrats, came into being.
However, THE CURRENT Supreme Court determined, nowhere in the US Constitution, etc., is mentioned: 1) abortion and 2) a woman has a legal right to an abortion.
The federal government only has the rights ceded to it by the SOVEREIGN STATES.
Any rights not ceded, stay with the States
That means the States determine the laws, rules and regulations regarding abortion.
The federal government would be involved only if a State violates a civil right, such as discrimination based on race, creed, color, etc., which all States have agreed is forbidden, as they agreed to in the US Constitution.
Maine as Third World Country:
CMP Transmission Rate Skyrockets 19.6% Due to Wind Power
Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.
Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT
******** IF LINKS BELOW DON'T WORK, GOOGLE THEM*********
(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/
Not yet a member?
Sign up today and lend your voice and presence to the steadily rising tide that will soon sweep the scourge of useless and wretched turbines from our beloved Maine countryside. For many of us, our little pieces of paradise have been hard won. Did the carpetbaggers think they could simply steal them from us?
We have the facts on our side. We have the truth on our side. All we need now is YOU.
“First they ignore you, then they laugh at you, then they fight you, then you win.”
-- Mahatma Gandhi
"It's not whether you get knocked down: it's whether you get up."
Vince Lombardi
Task Force membership is free. Please sign up today!
Hannah Pingree on the Maine expedited wind law
Hannah Pingree - Director of Maine's Office of Innovation and the Future
"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."
https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/
© 2025 Created by Webmaster.
Powered by
You need to be a member of Citizens' Task Force on Wind Power - Maine to add comments!
Join Citizens' Task Force on Wind Power - Maine