Future Prospects for used Electric Car Markets in the US, China and Europe

 The Rise of Second-Hand Markets 

for Electric Cars

         A Driving Force to Mass Adoption

As the electric vehicle market matures, so do their used-car second-hand trading markets. Similar to other technology products, the arrival of new generations keeps early adopters switching to the latest or at least upgrading, building up an inventory of per-owned EVs. 

This is one of the most important keys to attaining mass-market adoption, specifically at a time when brand-new electric cars are still expensive and used ones are supposed to become more affordable.

In this blog, we will look at what second-hand EV markets mean, assess some current trends, and discuss what these might mean for mass transportation electrification.

Second-Hand Markets: A Driver for Mass Adoption

Second-hand markets remain one of the key methods of attaining a vehicle in both developing and developed economies. This is now likely going to be replayed with electric vehicles as increased adoption comes through more affordable variants. 

In Europe, eight out of every ten citizens bought their cars from the used car market; the percentage surges to about 90% when the low- and middle-income groups come under board. In the case of the United States, roughly 70% of all vehicles sold are second-hand, with only 17% of lower-income households having bought new cars.

Growing Supply of Used Electric Cars

As the larger electric vehicle markets become saturated, more used electric vehicles are becoming available for resale. By 2023, the market size of used electric vehicles would be about 800,000 in China, 400,000 in the United States, and more than 450,000 in key European countries combined. 

No less surprising is the fact that global second-hand electric vehicle sales were roughly at par with new electric vehicle sales in the United States during 2023 and are supposed to grow 40% in 2024.

Against these encouraging figures, used EV markets remain far behind the developed used ICE markets, which have had decades to develop and mature. 2023 second-hand ICE vehicle sales in Europe reached 30 million, approaching 20 million in China, and as many as 36 million in the United States. The comparison shows enormous long-term potential for the used electric car market as it continues to grow.

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Used Car Market Affordability

Already, used markets are seeing more affordable electric car options in China, Europe, and the United States. Used EVs already sell for less than $30,000 in over half of all cases in the U.S., with the average prices of these types dropping toward $25,000, making them eligible for the $4,000 federal used car rebate. That puts them squarely in competition with top-selling new and used ICE.

The cost of a used Tesla in the U.S. has dropped from more than $50,000 at the start of 2023 to just over $33,000 at the start of 2024, competitive with used SUVs and plenty of new models. 

In Europe, used battery electric cars can be had for EUR 15,000 to EUR 25,000, USD 16,000-27,000, with subsidies being provided in several countries, including the Netherlands, EUR 2,000, and France, EUR 1,000. The average price for a used electric car in China in 2023 is around CNY 75,000, which is equivalent to about USD 11,000.

Rising Resale Value

Over the past years, the resale value of electric vehicles increased. The resale value for battery electric cars sold after 12 months in Europe continuously increases steadily from 2017 to 2022 and broke above all other power trains, hitting over 70 percent in mid-2022. For cars sold beyond 36 months, resale values climbed below 40% in 2017 to about 55% in mid-2022. 

A larger proportion of new electric cars have greater prices; at the same time, improving technology and rising demand for second-hand electric vehicles are forcing better second-hand values. Trends in China are similar.

Clearly, it is not only good for consumers who retain more from the value of their initial purchase but also carmakers attract more consumers who have in mind the reselling of the car a few years down the line. The high resale values are also good for leasing companies since they own large volumes of vehicles for shorter periods and benefit from less depreciation.

Leasing companies are major drivers of second-hand markets, given the large owned volumes and shorter period of ownership—less than three years. In Europe, that share was in excess of 20 percent in the new car sales of 2022. Their influence could therefore be immense in both new and used markets, which impacts the availability and affordability of per-owned EVs derived from them.

International Trade of Used Electric Cars

As the EV stock gets older in advanced markets, so the international trade of used EVs will surely rise. In that case, the imported used vehicles can present a chance for consumers within emerging markets who otherwise cannot access new models because of cost effects or low availability.

Trade Flows and Policy Impact

For decades, ICE vehicles have been exported to developing countries. UNEP guesses that Africa gets 40% of the total used vehicles exported worldwide, where the typical trade flows are from Western Europe to Eastern Europe and Africa, from Japan to Asia and Africa, and from the United States to the Middle East and Central America.

In recent years, exports of used electric cars from large EV markets have grown quickly. With the rollback of policy in China in 2019 that allowed 27 cities and provinces to export used cars, almost 70,000 used vehicles were exported from China in 2022; out of these, nearly 70% were NEVs. In 2021 and 2022, the size of the used electric cars traded at the international level in the European Union increased by 70% year on year and almost hit 120,000 electric cars in 2022. 

There has also been a 30% growth in used electric car exports from Japan, with core markets in Russia and New Zealand, in the year 2023.

Local policies in developing countries are either going to support or limit used car trade. For instance, while some countries set a maximum age limit for used car imports to avoid dumping highly polluting cars, others simply ban used car imports to protect local manufacturing industries.

Supporting Infrastructure

To facilitate meaningful second-hand electric vehicle availability, it is essential to develop strategies, technical capacity, and business models for the cluster related to swapping old batteries from used vehicles. 

Most countries importing ICE vehicles have servicing capacity for extending the lifetime of used cars—including upgrade services—which could, under normal circumstances, be adequately adapted for EV servicing, but totally lack servicing infrastructure for EVs.

 Last but not least, developing further battery recycling capacity will play a pivotal role to reduce environmental harm from obsolete EVs and associated waste.

Tech Advancements

Battery Technology: An EV's most critical element is a battery. Improvements in the technology of batteries, especially higher energy density, extended service life, and faster charging, will develop parallel improvements in value and durability directly for second-hand electric vehicles. Enhanced battery management systems will be very helpful in doing this too. They monitor the health of batteries in regard to maintenance needs, providing reliability to used EVs hence making them more compelling to buyers.

Vehicle-to-Grid Technology: V2G technology enables electric cars to feed energy back into the grid. If and when this technology becomes mainstream, used electric cars with V2G capability quote extra value for consumers in the form of probable energy savings and extra sources of income.

Autonomous Driving: The almost step-by-step encompassing of autonomous driving traits within the electric vehicle will add to the growing charm. Second-hand electrified vehicles, bridge, and autonomous driving shall gain huge market demand in the used car markets by offering more safety and ease functions.

 

Here is the bar graph showing the demand for used electric cars in 2023 and the projected demand for 2024:

• China: The demand was approximately 800,000 in 2023, with a projected increase to about 1,120,000 in 2024.
• United States: The demand was around 400,000 in 2023, with a projected increase to about 560,000 in 2024.
• Europe (Combined): The demand was over 450,000 in 2023, with a projected increase to about 630,000 in 2024.

This projected increase in demand highlights the growing importance of the second-hand electric car market in facilitating broader adoption of electric vehicles globally. ​

Conclusion

It is irrevocably the case that secondhand markets put electric cars on the highway to mass adoption. The entry barriers into electric vehicles are going to drop further with more affordable models, hence more people being able to purchase them. 

Trends in resale values, international trade, and supportive policies are all evidence of a good future outlook for the used EV market.

Provided that policymakers and industry stakeholders are concerned, an accelerated shift to sustainable transportation will be founded on infrastructure development, encouraging policies, and international cooperation for rapid market growth among these markets. 

Secondhand electric car markets are going to play an integral role in propelling a global shift towards cleaner and more efficient road transport.

The more salient of these insights has been that second-hand markets are dominant, particularly in the emergence of the EV industry, and may well end up being what enables transformative change across transport globally.