Cost of Living4:30It’s a buyers market for used EVs
If you’re in the market for an electric vehicle, but cringing at the prices, experts say now might be the time to buy a used model.
As the auto industry recovers from lockdown-era supply shortages, more cars — electric and gas — are sitting unsold, with new cars rolling off production lines.
“Supply is there, demand has been declining, and prices are coming down,” said Baris Akyurek, vice-president of insights and intelligence for AutoTrader, on CBC Radio’s Cost of Living.
“So if you’re in the market, if you’re on the fence, [it’s] definitely a good time to be looking for a used EV.”
Used EVs on AutoTrader have more than quadrupled since 2019, according to Akyurek, with over 8,000 models available as of last month. This year, the price of a used EV has dropped by 11 per cent.
Compared to all used cars on the platform, which cost on average just over $37,000, about half of the available used EVs are priced under $40,000, he said.
Cara Clairman, president and CEO of EV advocacy group Plug’n Drive, says buying a used EV is a great way to get into electrification.
“What we’re seeing is an extremely reliable and low-cost-to-maintain car, so it’s a good bet for a used vehicle,” she said.
Why are used EV prices dropping?
Supply and demand is a significant driver behind the falling prices.
With greater availability of new electric cars, buyers are trading up their existing models. Akyurek says that per AutoTrader data, 50 per cent of purchases will bring a used car onto the market.
“For the first quarter [of 2024], looking at inventory levels, new EVs are up by over 500 per cent on a year-over-year basis compared to last year,” he said.
“The more new car sales means that, at some point in their life, [older vehicles] come back into the used market.”
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That increased choice also means greater competition in the EV space, and companies like Tesla are lowering the prices of their new models. In April, the company led by Elon Musk announced it would cut prices of three models by $2,000.
Greg Layson, with Automotive News Canada, says that means the choice between a new and used EV is less clear, leading to even more inventory.
“Why would I buy a used one when all of a sudden they’re slashing prices of new ones?” he said.
Layson cautions that the used EV market is “very finicky, very unpredictable, and still in its infancy.”
Do EV batteries last?
But experts say that for those wanting to go electric at a lower price point, there is value in the used market.
There are a few things for any car buyer to consider, including the age, mileage and condition of an electric vehicle.
When it comes to EVs, perhaps the most important part of the vehicle is the battery pack that powers the motor.
“If you buy a used electric vehicle, there is a chance that the battery life might not charge to 100 per cent,” said Layson.
That’s because the battery in an EV, like those in cellphones and laptops, loses its capacity over time and through repeated charging. That can result in reduced acceleration, and lower range.
Many factors can influence that degradation, says Olivier Trescases, a professor of energy systems at the University of Toronto who studies EV battery technology and owns a used EV himself.
Extreme temperatures, both cold and hot, can cause a battery to degrade faster. So can a reliance on high-power fast chargers, as well as a person’s driving habits, like excessive acceleration. The chemistry of the battery itself can also have an impact.
With some EV models now over a decade old, Trescases says there’s a better understanding of how that degradation occurs. Typically, he says, EV owners will see an initial steep drop of around five per cent, but the loss will level off before dropping again.
“You often hear end of life for EV batteries is 20 per cent capacity loss, or 80 per cent remaining capacity,” said Trescases. “It’s not a magic number. It’s just that beyond that, it tends to fall much more sharply.”
According to Geotab’s data, collected over approximately seven years from 21 different electrified vehicle models and published in 2020, there is an average degradation of 2.3 per cent per year. A 2023 analysis by the company suggests that newer models experience less degradation annually.
Geotab is a Canadian company that provides telematics systems for corporate vehicle fleet owners.
Charlotte Argue, its senior manager of sustainable mobility, says rapidly evolving technology is behind the shift.
“Within the vehicle, there’s thermal management to try to protect the battery, and so we’re seeing the thermal management systems improve,” she said. “That’s allowing those batteries to last longer.”
What to ask about a used EV battery
A key metric to look for is the battery’s state of health, which calculates the remaining capacity. It’s a number often provided by the car’s computer, but can also be confirmed by a dealer or technician.
Clairman suggests avoiding models with less than 90 per cent state of health, but a lower number can be fine for drivers only commuting small distances.
The warranty, she adds, is also crucial, noting that most vehicles are covered for up to eight years.
“That would sort of protect you from a problem with the biggest component,” she said.
Trescases suggests taking a checklist of questions with you when looking at your options. These questions, he says, can help you assess a battery’s health:
- Was the car stored in a climate-controlled area?
- Was the car used for long-distance driving? (Repeated deep discharges can have a negative impact.)
- Was it charged at home or using a fast charger?
- What is the displayed range of an EV at normal temperatures, and how does that compare to the manufacturers’ maximum range?
- Did the previous owner drive aggressively?
Should I buy a used EV?
Layson says that like with any used vehicle purchase, you should go over its history with a fine-tooth comb.
Aside from the remaining warranty and battery, he says buyers should confirm whether the car is still receiving software updates and if it was subject to any recalls — and whether those were addressed.
As EV technology ages, it’s rapidly changing, and potential buyers could see differences between new and used options on lots, said Trescases.
But while they may have a shorter range, Trescases says at least when it comes to battery, there’s reason to be hopeful about getting a cheaper EV used.
“In the early days of EVs, we overestimated the amount of degradation,” he said.
“So I think that, in general, consumers should not be afraid to buy used EVs.”