After a year of shocking price increases, prices of used cars—including EVs—are slowing starting to decline, according to battery analysis firm Recurrent.
Recurrent, which issues battery health reports for used EVs, tracks the prices of certain EVs from model years 2017 to 2019. The average price of those models decreased 2.9% since July, to $37,597.77, according to the analysis.
Note that this average is based on a handful of models currently popular in the market. Updated annually, the list currently includes the 2017 Chevrolet Bolt EV, 2017 BMW i3, 2017 Tesla Model S, 2018 Nissan Leaf, 2018 Honda Clarity, 2019 Audi E-Tron, 2019 Tesla Model 3, and 2019 Volkswagen E-Golf, as well as the 2018 BMW 530e plug-in hybrid.
Recurrent Price Index for used EVs as of October 2022
When all used EVs are taken into account, average prices haven't decreased. Thee average currently sits at $42,700 and sat just above $42,000 since March. That's higher than the $33,957 average price for a used internal-combustion car, but the average age of used EVs is just four years compared to 6.5 years for internal-combustion cars, Recurrent noted.
Still, those prices don't bode well for shoppers looking to take advantage of the used EV tax credit, added under the Inflation Reduction Act (IRA). The legislation offers a credit of up to 30% of a vehicle's original purchase price (maxing out at $4,000), but comes with a $25,000 price cap. Just 12% of current used EV inventory is listed for under $25,000, according to Recurrent.
The IRA also stipulates that used EVs must be at least two model years old to qualify for the credit, but that likely won't be a factor because these newer vehicles already tend to exceed the price cap, Recurrent noted, adding that older EVs and plug-in hybrids—which can still qualify for a tax credit based on battery-pack size—will get the bulk of the credits.
2018 Nissan Leaf
Used EVs currently priced under $25,000 should hold steady in market value between now and the start of the new EV tax credit in January, Recurrent CEO Scott Case anticipated in a statement, adding that most of the price decreases have been on costlier used EVs.
Meanwhile, there may be some good news in prices for new EVs. Recurrent in January noted a jump in used Tesla prices, trailing price hikes on new Teslas. It's been a few months since significant Tesla price hikes, while many of the other EVs that have seen recent price hikes, like the Ford F-150 Lightning, aren't widely available used yet.
2019 Volkswagen e-Golf
Prices on several EVs haven't risen significantly. The Nissan Leaf has held steady, and General Motors has even lowered prices on the Bolt EV and Bolt EUV.
EV price volatility is beginning to worry auto executives. Stellantis chief manufacturing officer Arnaud Deboeuf in July warned of market "collapse" if EVs don't get cheaper, while Ford CEO Jim Farley in June said he anticipated an EV price war.