The resale value of electric vehicles (EVs) is soaring as weak consumer demand weighs on prices.
Automakers have offered a series of price cuts on new models to support sales amid weaker-than-expected demand. According to In the Wall Street Journal. Discounts have plummeted the resale value of EVs, with the average selling price for an EV three years ago dropping to $28,400, a 25% drop since the start of 2023 and lower than the price of the same internal combustion engine vehicle. . year. (Related: Biden-Harris administration’s multibillion-dollar electric school bus plan is a huge gift to China, House report finds)
As a result, as of August, EV owners owed about $10,000 more on their auto loans than their cars were worth, up from $8,000 at the beginning of 2023, WSJ reported.
“The used EV market was destroyed because they kept lowering the price of cars,” Christian Lange, a former owner of a 2018 Tesla Model 3, told WSJ. Mr. Lange realized that after the 2023 price reduction, the value of his car had fallen by $10,000 compared to his loan payment.
They are buying up businesses, causing massive depreciation, creating a race to the bottom, and ruining the auto industry.
However, EVs are selling well! And if you think you’re stupid
“The average discount rate for EVs is almost double the average discount rate for ICE vehicles.”… pic.twitter.com/rLvax7d4WM
— Barry Crampton (@BarrieCrampton) October 10, 2024
The price cuts came after demand from EV sales in 2023 and 2024 was lower than expected. grow up The increase will be 50% in the first half of 2023 and 31% in the first half of 2024, which is lower than the 71% increase in the first half of 2022. Meanwhile, a June poll conducted by The Associated Press-NORC Center for Public Affairs Research and Universities found that 46% of respondents were unlikely or very unlikely to purchase an EV, according to the Energy Policy Institute of Chicago. Only 21% of respondents said they were “very” or “extremely” likely to purchase an EV.
The weak demand comes despite billions in subsidies from the Biden-Harris administration, including a $7,500 federal tax credit for certain EVs to ease costs for buyers. Experts previously told DCNF that the weak demand is due to lower driving ranges, lack of charging infrastructure and consumer aversion to rising vehicle prices.
“Even after pouring money into EVs and paying taxes to the public to basically drive these cars off the lot, there is still no evidence that (1) there isn’t enough demand to support the production numbers, or (2) that we don’t have to pay for them. People who bought it want to go back to what they had before,” O.H. Skinner, executive director of Consumers Union and former Arizona attorney general, previously told DCNF.
$4,000 credit The lower sales prices for used EVs priced under $25,000 enacted as part of President Joe Biden’s anti-inflation law also encourage dealers to lower prices up to $25,000, according to the Journal. This is said to be one of the reasons why resale values have plummeted.
Tesla did not immediately respond to a request for comment.
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