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AMERICA FINALLY HAS AN ANSWER TO THE BIGGEST PROBLEM WITH EVS  
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Matteo Wong
July 8, 2024
The Atlantic
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_ Used electric cars are not just cheap—they are cheaper than
similar gas cars. _

, afdc.energy.gov

 

For more than 40 years in a row, Ford’s F-150 and its family of
pickup trucks have been the best-selling vehicles in America. So when
Ford released an electric version in 2022, the F-150 Lightning, it
should have been a turning point for electric cars in the country—if
not, that is, for the price tag. The bottom rung of the all-electric
F-150 Lightning sells for about $26,000 more than the cheapest
gas-powered model, and at the moment, few people seem willing to pay
the premium: Of the more than 750,000 F-Series trucks sold last year
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just over 24,000 were electric.

Such price tags have been the biggest hurdle
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Americans from buying electric cars, in turn hampering the country’s
climate goals. A new EV costs $55,000
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average, according to one estimate—positioning these cars as luxury
items. In a recent poll
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more Americans balked at the cost of an EV than were worried about
range or simply preferred gas. Electric vehicles made up about 8
percent
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new car sales in the United States last year, compared with more than
a quarter
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China, where new EVs can go for about $10,000 or less
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No matter how high-tech or eco-friendly these cars are, until America
gets EVs that are at least as affordable as gas cars, a critical mass
of drivers will have ample reason to avoid going electric.

But you can already buy a cheap EV in the United States. The typical
price of a _new_ EV certainly remains higher
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that of a gas car—but the price of _used_ EVs has cratered in
recent years, so much so that a used EV is now actually cheaper
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comparable used gas car. In May, the average secondhand EV sold for
$32,000, Ivan Drury, the director of insights at the car-buying
website Edmunds, told me, down from $56,000 nearly two years earlier.
Some estimates are lower
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The average used price of a set of popular EV models has fallen to
less than $24,000, according to Liz Najman, the director of market
insights at the EV-monitoring start-up Recurrent. And that’s all
before you subtract up to $4,000
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credit. Going electric may no longer just be the best option for the
planet—it may also be best for your wallet.

Until recently, EVs were so novel that there weren’t any used ones
to speak of. A decade ago, supply was limited enough that secondhand
Teslas sometimes sold at a premium, Drury said. As new EVs have become
more common, so have used ones: Over the past few years, most major
automakers have introduced at least one electric offering, if not
several. As drivers have traded in leased electric cars or sold older
ones, secondhand prices have gradually come down.

But it was really only starting last year that used-EV prices began to
fall. What has become a great opportunity for Americans looking to go
electric emerged from a troubling situation: Just as the country’s
interest in EVs briefly appeared to pick up
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prompting carmakers to ramp
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in 2022
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sales began to plateau
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Automakers, it turned out, had been overconfident
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The rush of early adopters—climate and car enthusiasts who were
eager to pay a premium to go electric—quickly ran out. “That group
has definitely been sated,” Karl Brauer, the executive analyst for
the used-car database iSeeCars, told me. Everyone remaining, many of
them less EV-curious and less affluent, has been more hesitant.

Automakers have responded to falling sales for new EVs by slashing
sticker prices. Tesla, which has long accounted for more than
half of EV sales in the U.S., has reduced the price of various models
by 17 to 35 percent since 2022, Najman told me. Other carmakers cut
the prices of their EVs too
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hoping to stay competitive with Tesla and get cars off their lots.
Some companies are even producing fewer EVs
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pushing back new EV-model release dates. At the same time, the rental
giant Hertz has begun selling
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30,000 EVs, citing
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costs to repair collision damage.

All of that would appear to spell disaster for the goal of
electrifying America’s roads. Automakers don’t want to build EVs;
rental companies don’t want to maintain EVs; your neighbor doesn’t
want to buy an EV. The cumulative “psychological impact,” Brauer
told me, is that if “EVs [are] not working for Hertz, maybe they
wouldn’t work for me too.”

Yet the discounts have sent secondhand prices plummeting. (Of course
you wouldn’t buy a used car if a new one is available at a similar
price.) The average used Tesla lost 30 percent of its value across
2023, according to Najman—meaning that many people who initially
bought a new Model Y for $60,000 a few years ago might now be selling
it for $30,000. Hertz is off-loading dozens
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Teslas _from 2023_ for less than $22,000. At such low prices, car
buyers start to think, “_Huh, well, maybe I can make an EV work for
me_,” Brauer said. And there are signs that Americans are beginning
to get excited about used EVs. In May, according to data from Edmunds,
the average used EV selling for $20,000 to $25,000 took 30 days to
find an owner, compared with 39 days for a used gas car in the same
price range. The typical used Kia EV6 costs less than $32,000 and
takes 24 days to sell, whereas a new EV6, at above $52,000, will
typically sit on a lot for more than 100 days. Tax incentives for new
and used EVs are bringing costs even lower.

The drop in secondhand prices could turn out to be a huge boon for
helping electric cars go mainstream. Used-car sales more than double
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number of new purchases and leases in any given year, and many
secondhand buyers have different needs than new EV adopters do. The
latter tend to be wealthier, live in a house, and own multiple cars,
Brauer said. That means they can pay more up front, install a charger
in their garage instead of relying on highly unreliable public
chargers, and use their other, gas-powered car for longer road trips.
Convincing a renter with a single car to accept the hurdles of EV
charging and battery life could require a serious discount, and
that’s exactly what used EVs are now providing.

Used EVs alone won’t push us into a new era of electrification.
There aren’t nearly enough secondhand EVs for most or even many
Americans to drive yet. And at some point, the oversupply of new EVs
and the dumped rental-agency cars will dwindle, Drury said. Growing
interest in used EVs, Najman noted, will also keep prices from falling
much further. In other words, there’s a decent argument for buying a
used EV soon, especially because only a finite pool
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used cars qualifies for a government tax credit. Still, Brauer was
hesitant to say that now is the best time to buy a used EV—the
prices will bottom out, he told me, but he doesn’t know when, or how
low they’ll fall.

Most of the discourse around EVs is about new cars: Every model
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the latest high-tech EV feature elicits buzz; Joe Biden’s climate
agenda is all about
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sales. But the masses might first buy a used one—which means that
how plentiful, dependable, and affordable used EVs are could be a key
factor in decarbonizing America. “EV adoption is really going to
skyrocket when people realize that used EVs are out there and
they’re reliable,” Najman said. That might already have begun, one
$22,000 Tesla at a time.

_Matteo Wong [[link removed]] is a
staff writer at The Atlantic._

* Electric vehicles
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* prices
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* used cars
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* affordable
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