Why used electric car prices are collapsing

The automobile marketplace “La Centrale” mentions a “record depreciation”. The average price of electric vehicles falls to 21,990 euros in the third quarter of 2024, or 1,000 euros less (-4.3%) than in June 2024. Over one year, the price of electric vehicles falls by -19.4%, The equivalent of 5,309 euros, this is the biggest drop for all engines combined.

This is explained in particular by the speed of their technological evolution (autonomy, charging speed), which leads to a more marked obsolescence of these models on the second-hand market. An observation that is found in the field: electric cars are leaving less quickly than others while their price sometimes decreases spectacularly, as noted by Menad, sales director at Simplicicar, Porte de Montreuil, near Paris, who takes the example recent of a customer’s Tesla Model 3: “It’s a car bought for a little over 39,000 euros and we are out of 27,000 recovered, for 17,000 km on the odometer. In the space of eight months, the person has therefore lost almost 13,000 euros!”

Steepening price drops

This is an underlying trend, confirms Yoni Dayan, the founder of the Simplicicar network, which brings together more than 90 points of sale in France and Belgium. “We see it every day, huge price drops, customers who sometimes lose a lot of money. So, there is also the Tesla effect which, our friend Elon Musk, raises and lowers prices quite a bit. Therefore, customers often do not have the price capital of their car as for a classic vehicle,” he explains.

The fall in the famous “residual value” of a car, or the price we hope to get from it on resale. On the electric side, similar price drops have been seen for a popular model like the Kia Niro. “They were forced to align themselves with Tesla,” notes Menad, “yet it is a very good car, in high demand.” The arrival on the market of other models, a little less expensive, has also pushed prices down. A relative “low” since electric cars remain on average around 30% more expensive than their thermal engine equivalents. Long-term rental offered by manufacturers, however, increasingly makes it possible to reduce the gap.

Low autonomy, customers flee

Sometimes it is the low range of an electric car that will cause its value to drop. A phenomenon observed on the Simplicicar network on Minis or even Twingos. “Customers tell us that if there is not a minimum autonomy of 400/450 km announced, to be able to do 300 km, they do not buy” underlines Yoni Dayan.

On the contrary, he notes that diesel is experiencing renewed interest at the moment, both from professionals and individuals. There are fewer and fewer of them on the market, their prices are not falling.

Downward curve for hybrid

On the other hand, the hybrid also follows a downward curve with regard to its prices. La Centrale observes that over the year, the price of gasoline hybrids shows a drop of 10.3%. Over the past year, the platform has recorded a 55% increase in requests for used hybrid vehicles while demand for used electric vehicles has increased by 40%.

“Hybrid vehicles are seen as the ‘new diesel’ by consumers, as they are seen as a more reassuring option than electric which offers a smooth transition to cleaner powertrains, while maintaining better resale value “, explains Anaïs Harmant, marketing director of La Centrale. This should logically continue since on the new market, hybrid engines (not counting plug-in hybrids) now represent 32.6% of sales over the first nine months of the year, according to the latest figures published by the PFA, i.e. nine points less than in 2023.