Growing second-hand market could accelerate EV adoption
High deprecation of second hand BEV prices makes vehicles increasingly attractive to consumers, says consultancy report
A growing market for used EVs could help lower costs for first time buyers, according to research by PwC’s consultancy business Strategy&.
High purchase prices are often cited as a major barrier preventing consumers from purchasing new EVs. But the growing adoption of these vehicles in major markets such as Germany is leading to a greater availability of cheaper second-hand models.
And analysis carried out by the consultancy group suggests that on average BEVs lose almost 10pc more value than ICE vehicles in the first three years after manufacture.
“This presents consumers with an enticing alternative to a new BEV, where the high upfront cost is often a major reason to avoid a [purchase],” says Strategy& in its Q4 EV sales review. “Currently, the total cost of ownership (TCO) for a used BEV can look much better compared to a used petrol or diesel car due to the accelerated initial depreciation.”
As well as lower upfront cost, the immediate availability, lower registration fees and lower ownership taxes of used EVs are also attractive to buyers.
The report notes that, while consumers are still concerned about the longevity of batteries in used vehicles, nearly all manufacturers offer an eight-year or longer warranty for the battery — significantly longer than the two to three years of cover typically offered for a petrol or diesel car.
And OEMs such as Volvo are planning to improve the monitoring of batteries used in their vehicles by using cloud based technologies. This would enable them to have better oversight of how well the battery will perform for a new owner, and provide a guarantee for a further period of time if it can.
As well as first time buyers, existing BEV owners are also likely to be interested in used vehicles. A Strategy& survey of such owners in 18 countries across the world found that on average 60pc of them had an interest in buying a used BEV. That percentage rises to 75pc in North America and 71pc in the Europe.
However the report notes that some downsides to used BEVs remain – such as higher insurance premiums and outdated battery technologies.