While prices for used electric vehicles are falling, the change marks a decrease in resale value: something that could prove to be another roadblock in EV adoption.
A recent study from iSeeCars.com revealed that the average price of a 1-to 5-year-old used EV in the U.S. experienced a 31.8% decrease over the last year, reports CNBC. It’s a stark contrast to internal combustion engines, which in that same timeframe saw its prices drop only 3.6%.
A major reason behind prices falling is recent price cuts from Tesla. As newer EVs cost less, consumers won’t be as willing to pay those same prices for a used alternative. While CEO Elon Musk has defended these price cuts, experts like Karl Brauer, executive analyst at iSeeCars, expect the entire market to be dragged down as a result.
Alongside Tesla’s price cuts, overproduction has also played a role in reducing EV resale value. Brauer said that an overabundance of supply will make it difficult for both used and new EV prices to stabilize anytime soon.
All of this could likely translate into more electric and combustion-powered hybrid sales, which have been on the up and up recently. In the past year, the average price for a used hybrid fell by only 6.5%–a dramatic difference from that seen with EVs.
