Substantial Depreciation in Used Electric Vehicle Market Shows Signs of Stabilisation, Reveals Cap HPI

In recent car dealer news circulating in the UK, a considerable decrease in the valuation of used electric vehicles (EVs) has been documented, albeit with signs pointing to a slowing down of this trend, according to a recent report detailed by cardealermagazine.co.uk.

Exclusive insights shared by trade price specialists, Cap HPI, have cast a spotlight on the steep depreciation of certain electric car models over the past year, with some vehicles experiencing a decrease in value by nearly half within a span of just under a year. Vehicles such as the Seat Mii electric have been particularly affected, witnessing a decline of 50.3% since October 2022. Moreover, the recent motor trade news indicates that in monetary terms, the Audi e-tron GT and the Mercedes Benz EQC have faced significant depreciations, dropping by £27,629 and £20,275 respectively.

The downturn in used EV prices began around October last year, catalysed by factors including the cost of living crisis, turbulent financial markets following Liz Truss's mini budget, and escalating energy prices. Negative press surrounding the prolonged wait times at charging stations further exacerbated the situation. However, August witnessed a notable reduction in the downward pressure on prices, with many models aligning more closely with the depreciation seen in other fuel-type vehicle sectors.

Cap HPI’s director of valuations, Derren Martin, highlighted a resurgence of interest in electric vehicles, with both consumers and dealers demonstrating cautious optimism. Despite the precipitous declines earlier in the year, a silver lining appears on the horizon as the market begins to exhibit signs of stabilisation, offering some attractive bargains in the retail sector. It is posited that the falls were propelled by a concoction of range anxiety, adverse press narratives, and escalating energy prices, which led many dealers and financial establishments to adopt a risk-averse stance.

Whilst the initial part of the year saw a dramatic decrease in Tesla values following price cuts on their new Model 3 and Y ranges, these models did not feature in the top ten list of the largest depreciations, both in percentage and monetary terms. The industry now awaits incentives, possibly in the form of plug-in car grants, to rejuvenate the market and alleviate the escalating finance costs associated with purchasing new EVs, as noted by a concerned car dealer group boss.

As the market seeks to recalibrate, Richard Walker, the data and insights director at Auto Trader, observes this as a natural correction following a significant influx of electric vehicles into the market. He maintains a hopeful outlook, suggesting potential strong profit margins for retailers who adeptly navigate the data to source appropriate electric stock for their forecourts.

To read the original article, please visit cardealermagazine.co.uk.

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