There’s a concerning trend in Germany regarding used electric cars, especially SUVs. These vehicles rapidly depreciate after purchase. As the price of new electric vehicles decreases, lightly used second-hand electric cars experience significant loss in market value.
Germany’s Used Electric Car Market Hits an Impasse
As the prices of brand-new electric cars continue to drop, the value of younger used vehicles decreases significantly. For instance, an electric car that originally cost 43,600 Euros may only be worth 18,800 Euros after three years and 60,000 kilometers, which represents a significant 57% loss in value.
According to an analysis by the German consulting firm Berylls, this situation is particularly challenging for the newer model second-hand electric car market. Berylls is investigating the reasons behind this depreciation in electric vehicles.
Volkswagen has canceled the production plans for the electric car model ID.3 at its Wolfsburg factory in Germany due to low demand.
The general decline in demand for electric vehicles plays a significant role in this loss of value. Moreover, the introduction of cheaper and longer-range new models reduces the demand for used electric cars.
Large and expensive electric SUVs are notably the most affected segment in the young used car market, with their resale becoming increasingly difficult. Berylls calculates that in 2023, the 524,000 newly registered electric cars in Germany lost a total value of about 3 billion Euros.
This equates to an average loss of approximately 5,700 Euros per vehicle. Berylls’ analysis suggests that the current generation of Battery Electric Vehicles (BEVs) does not show promise in the second-hand car market.
This situation leads to a significant contraction in demand for used electric vehicles. Berylls advises car manufacturers, dealers, and leasing companies to reconsider their business models.Berylls recommends that car dealers shift from sales to leasing and subscription models. Experts indicate that under the current circumstances, only the minimization of losses is possible.
Leasing or subscription-based distribution of electric vehicles could mitigate their depreciation and offer a more sustainable solution for both sellers and buyers. This approach could ease market fluctuations and contribute to a more balanced structure in the used electric car market.
These dramatic shifts in the used electric vehicle market raise significant questions about the future of the electric car industry. What are your thoughts on this matter? Please share your views in the comments section below.
