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Harsh Truth: Why Used EVs Are Losing Value and What It Means for Buyers

In recent years, the automotive landscape has witnessed a significant surge in the presence of electric vehicles (EVs) within the wholesale market, signaling a shift in consumer preferences and an expanding used EV market. However, despite their growing popularity, used EVs are grappling with a persistent challenge: a notable decline in their resale value.

Auto News reported that statistics shared by Manheim at the Auto Finance Summit highlighted a staggering increase in EV presence at wholesale auctions, surging from 0.7 percent to 1.7 percent of the market within just two years. While this surge underscores the escalating interest in EVs, it also reveals a concerning trend of diminished value retention among these vehicles.

The depreciation of used EVs has been an escalating concern, influenced significantly by price reductions observed in new EV models. Black Book’s chief data scientist, Alex Yurchenko, pointed out the immediate impact of Tesla’s new-vehicle price cuts on the wholesale market, triggering rapid depreciation among used EVs. Fleet and rental companies faced disappointment with these sudden reductions, directly affecting the resale value of used EVs.

The ongoing “price wars” among automakers striving to lower the sticker prices of new EVs have inflicted considerable damage on the value of pre-owned EVs. Kristen Lanzavecchia, J.D. Power’s director of industry solutions, highlighted the instantaneous effect of new-vehicle price drops on the used market, emphasizing the direct correlation between these reductions and the decline in used EV prices.

Comparative analysis between the retention of value in traditional vehicles and EVs further illuminates this issue. Black Book’s forecast for October 2026 paints a stark picture, projecting a decline to 56 percent in the retention of value for 3-year-old vehicles, while 3-year-old EVs are anticipated to retain only 45 percent of their original value.

This downward trend in used EV values is poised to continue due to the evolving dynamics of the EV market. Tax credits for EV buyers and commercial entities have added complexity, driving automakers toward promoting EV leasing. The Inflation Reduction Act offers substantial tax credits for new-EV retail buyers and commercial entities, encouraging EV leasing with fewer restrictions on vehicle qualification. However, this strategy could lead to a future influx of used EVs in the market, posing challenges for automakers in managing surplus inventory.

While EV leasing presents an appealing solution amidst price volatility, it might merely defer the challenge of declining used EV values, emphasizing the complexity faced by automakers in navigating this evolving market landscape.

Author: Madison Cates

Title: Managing Editor

Bio:

Research journalist, Freelance writer, Managing editor

  • Expertise: automotive content, trending topics.
  • Education: LeTourneau University, Bachelors of Science in Business Administration.
  • Over 400 articles and short news pieces published across the web.

Experience: Madison Cates is a journalist located in the great state of Texas. She began writing over eight years ago. Her first major research piece was published by the Journal of Business and Economics in 2018. After growing up in a household of eight brothers and a dad who was always restoring old Camaros, she naturally pivoted her freelance career into the automotive industry. There, she found her passion. Her experience paved the way for her to work with multiple large corporations in automotive news and trending topics. Now, she now finds her home at Wealth of Geeks where she proudly serves as Managing Editor of Autos. Madison is always down to geek out over the latest beautiful cars on the market, and she enjoys providing her readers with tips to make car ownership easier and more enjoyable.

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