Early last year, as demand for electric vehicles (EVs) shot up and supply to Australia remained tight, second-hand Teslas were selling for head-turning prices.
In some cases, used models were selling for more than their price when new.
Prices are now down from this peak, but second-hand EVs are still not cheap.
So if you want an EV but can’t afford a new one, when will buying second-hand become a more viable option?
To answer this question, we’ve consulted automotive auction houses and other industry experts, and looked at trends in overseas markets that are years ahead of Australia in their EV uptake.
The good news is that used EVs will get cheaper, but the picture is complicated.
Because there are so few of these cars on the roads, and the technology is rapidly changing, second-hand EV prices don’t play by the usual rules.
Here’s what you need to know.
Whereas cars on average lose half their value over three years, many EV models are currently depreciating slower than that.
A three-year-old Tesla might sell for around $45,000, or 30 per cent less than its price brand new.
Tom Gan, a Sydney doctor and Tesla enthusiast, recently sold his 2019 Tesla Model 3 Performance for $60,000, having bought it new for $97,000.
He’s “delighted” by a depreciation rate of 38 per cent over four years.
A major reason EVs are generally losing their value less rapidly than internal combustion engine vehicles (ICEVs), at least at the moment, is their relative scarcity.
There just aren’t that many used EVs for sale, so sellers can charge more.
Brendon Green, general manager of motor vehicles at Pickles Auctions, said the wait time on new EVs “up until the last month or so has been extremely long.”
“So any used electric vehicles were in high demand,” he said.
“Supply of new vehicles is starting to get a little better, so we are just starting to see the price of used electric vehicles soften.”
The introduction of government purchase incentives for new EVs has also put downward pressure on resale values.
Some car makers, namely Tesla, have also slashed their retail prices.
There’s no central register for used-car sales (like there is for new-car sales), so to get a more detailed picture of the market we turned to the business intelligence company Datium Insights.
Datium collates data from auction houses and used-car dealers around the country, to generate an “indicative” data set, said the company’s head of business intelligence, Tanim Ahmed.
“What we saw was prices crept up to 50 per cent higher than what they were pre-COVID,” he said.
The graph below shows how much used EVs and used cars in general have increased in price, with the average prices for each year compared with those in the base year of 2019, and adjusted for inflation.
The graph shows used-EV prices have followed the used-car market trend, but are more volatile.
They increased at a faster rate in 2022, when used-car prices were rising, and have fallen more steeply since then.
EV prices will keep falling, Mr Ahmed said.
“In the last 12 –18 months they have come down about 15 per cent,” he said.
“Our expectation is prices will continue to trend down.”
