The average price of used electric vehicles has dramatically declined over the past year, reaching its lowest point in May 2024 due to a combination of several market forces.
Historically, the average used EV has been far more expensive than the average used gas car, but that trend has swapped entirely in the past few months. Used EVs are now becoming cheaper than gas cars. The gulf is expected to widen further in the coming months.
Automotive research firm iSeeCars analyzed over 2.2 million one- to five-year-old used cars sold between May 2023 and May 2024. It found that the average used EV price is down 29.5% year-over-year. Prices of used gas-powered cars have also dropped, but only by an average of 6.1%.
In May 2024, the average late-model used EV cost $28,767, 8.3% below the average late-model gas car at $31,424. These prices highlight a major shift from a year ago, when the average used EV cost $40,783 and the average used gas car cost $33,469.
Several factors could be driving down the prices of used EVs. At the start of 2024, new IRS rules went into effect, making federal tax credits available to buyers at the point of sale. Instead of waiting till the tax season begins, buyers are now able to obtain tax credit benefits right when they walk into dealerships for a new or a used EV, lowering the purchase prices significantly.
Other factors could include increased competition, falling lithium prices and improved manufacturing.
“There’s no denying the crash in used EV values over the past year,” said Karl Brauer, executive analyst at iSeeCars. “We’ve watched EV prices fall between 30-40% since June of last year, while the average gas car’s price has dropped by just 3-7% in that same timeframe,” he added.
So which used EV models exactly are cheaper now? For starters, one- to five-year-old Tesla Model 3s were priced at an average of about $37,000 a year ago. Today if you’re lucky you can snatch a used Model 3 up for under $29,000. (Prices vary regionally and are contingent on the age and condition of the EVs plus state and local subsidies.)
For the sake of comparison, the average gas-powered used BMW 3 Series is priced at $33,245. A year ago a used Model 3 cost $2,635 more than a used 3 Series. Today, it’s $4,806 cheaper than the Beemer.
The gulf between premium mid-size electric SUVs and premium mid-size gas cars is getting smaller, too. A year ago, a used Tesla Model Y went for $39,502 on average. That was $4,570 more than the average price of a used gas-powered BMW X3.
Today, the price difference is only $175. A used Model Y came in at an average price of $34,734 in May 2024, whereas a used X3 costs about $34,559.
The top ten cars in the used car market that have witnessed massive price drops year-over-year include the Jaguar I-Pace, Chevrolet Bolt EV, Hyundai Kona Electric, Kia Niro EV and Nissan Leaf.
Price parity with gas cars is no longer an unattainable target. While used EVs cost much less to purchase and run compared to used gas cars, we’re seeing a similar trend among new EVs.
There’s a growing crop of long-range EVs with prices well below the average transaction price of a new car. With used and new long-range EVs cheaper than ever, we may be getting close to solving the EV affordability problem.
