Used electric car sales jump in US amid price drops
Used electric vehicle prices have decreased in light of price drops in new vehicles.
Used electric vehicle sales in the United States increased 32% in the first three months of 2023 as costs decreased, data provider Cox Automotive said Friday.
According to the group, the average retail listing price for used EVs was roughly $43,400, much less than the average new EV pricing of nearly $59,000 and a decrease of 4% from the same quarter last year.
It also claimed that aggressive price cuts by Tesla for new vehicles were likely behind the decrease in used EV prices.
"As the market leader pushes down prices for new EVs, used-vehicle prices follow suit," Cox underlined.
For the seventh time this year, Tesla on Thursday reduced prices in the United States by between 2% and over 6%. On April 18, Washington will establish stricter battery sourcing guidelines that will reduce the amount of EV tax credits available.
According to preliminary projections by Kelley Blue Book, more than 225,000 EVs were sold in the first quarter of 2023, making up around 7% of new-vehicle sales.
New EV sales in US to top 1 mil in 2023
General Motors said Monday it sold more than 20,000 electric vehicles in the first three months of the year in the United States, a record for the company. EVs accounted for approximately 3.4% of GM's first-quarter US sales.
Congress created a $4,000 used EV tax credit in August. Buyers are required to purchase used EVs for $25,000 or less from a dealer to qualify. The maximum credit is 30% percent of the sale price up to $4,000.
The adjusted gross income of used EV buyers cannot exceed $75,000 for individuals or $150,000 for joint filers.
This year, Cox Automotive predicted that new EV sales in the United States would top 1 million units for the first time in 2023, an increase of 5.8% from roughly 807,000 units last year.
Wholesale values of used EVs increased by 3.7% year over year, compared to an overall decline of 2.4%, Cox revealed.
The United States is mulling to ease some regulations in its Inflation Reduction Act (IRA) that would allow the European Union and Japan to be included in the EV subsidies bill, according to an AFP report published in late March.
The IRA, which was signed into law by US President Joe Biden in August 2022, commits $300 billion to deficit reduction, as well as approximately $370 billion in funding for energy security, including tax credits for US-made electric vehicles, batteries, and consumer subsidies, and $80 billion to increase Internal Revenue Service tax enforcement and operations.
New guidelines announced by the US Treasury Department state that EV batteries for vehicles must meet certain requirements to be qualified for a $7,500 consumer tax credit - the highest amount offered under the legislation.
The bill also specifies that a percentage of critical minerals used in the battery must be acquired from the US or countries that it has free trade agreements with, which originally excluded the EU and Japan.