The Expert Podcast

Most of the news coverage in the electric vehicle industry has focused on new electric vehicles—things like Tesla introducing new models or recent developments in subsidies and rebates. There has been very little coverage of the used electric vehicle market, or used EVs. Within that market, it is first important to figure out how big the market is. How many people are buying used electric vehicles?

An article from Auto Remarketing, an excellent industry trade publication, sheds light on this topic. If you dig into the buried data in the article, you'll find why there isn't as much high-profile information about used electric vehicles. According to the article, a survey conducted by Experian, one of the major credit bureaus (alongside Equifax and TransUnion), provides insights into used electric vehicle financing.

The survey focused on used electric vehicles that were financed, not all used EV purchases. When you consider it, most EVs are likely to involve financing because of their relatively high cost. While some people may pay in cash, the numbers at least provide a trend. In 2021, Experian found that 60,000 pre-owned electric vehicles were financed. That’s roughly 1,000 vehicles per state—not a large number.

By 2022, the study didn’t have complete numbers but indicated that as of early summer, 42,000 vehicles had been financed for the year to date. Assuming this trend continued, they were on track to hit 70,000 to 80,000 financed vehicles for the year. While this shows some growth compared to 2021, it still highlights that the used EV market is not seeing high transaction volumes—far from hundreds of thousands or millions of vehicles.

So, why is the used EV market relatively small? Are there not enough vehicles available? Do people not want to buy them? Are prices too high? The answer partly lies in the history of electric vehicles. Large-scale production of EVs didn’t begin until the late 2000s—around 2009 or 2010. Early models like the Prius and some Teslas were available, but it wasn’t until 2014–2016 that production volumes significantly increased. This means there aren’t many used EVs available in the market today.

Additionally, many of the EVs that were produced early on have been kept by their owners for a long time. Unlike primary vehicles, which are typically traded in or replaced every three to four years, secondary vehicles like EVs are often kept for six or seven years. Since large-scale EV production started around 2015 or 2016, we’re only now reaching the six- or seven-year mark when these vehicles might begin entering the used car market.

The next few years will be critical in determining whether people will embrace used EVs. Will owners start trading their current EVs for newer models, or will the used EV market remain small? What do you think? Would you consider purchasing a used EV?

Buying a used EV could be a great way to save money, but some might prefer a new one to ensure the battery is in top condition and the model is current. One advantage of EVs is that mileage matters less than it does for gasoline vehicles. While a gas car with 200,000 miles has used up much of its lifespan, an EV can still have a long life if its battery has been properly maintained.

The key to EV longevity lies in the electric motor, which lasts longer than an internal combustion engine. Gas engines, which rely on combustion, wear out more quickly because of the intense heat and pressure involved. Electric motors, on the other hand, spin with magnets, causing less wear and tear.

Used EVs are slowly making their way into the market. It will be interesting to see how their volume and sales rates change in the next few years, particularly in 2024 and 2025.