Study: Average Used EV Values Fall Below Gas Cars For the First Time

Used EV prices have plummeted over the past several months, according to an iSeeCars study.

Over the past few months, the industry at-large has pivoted away from its headlong charge toward complete electrification in light of cooler-than-expected demand. While EVs accounted for about 9% of all US new car sales in 2023, they’re still a long way off from supplanting their internal combustion stablemates — and that reality continues to play out in the used car market.

Research firm iSeeCars analyzed 2.2 million 1- to 5-year-old used cars sold between May 2023 and 2024. The study concluded that the average used EV price is down a substantial 29.5%, while gas cars fell just 6.1% in the same time period. While several factors play a rule in that major gap, one major consideration is that used gas cars continue to be in heavy demand because transaction prices for new vehicles broke records at the beginning of 2023.

Overall, ATPs have dropped from that high point, but data from Cox Automotive showed an upward tick in April, with the average new vehicle sold for around $47,433. That’s still a hefty amount of cash, and that trend explains how used gas-powered cars have stayed relatively stable over the past several months — even increasing in value from December 2023 after sliding downward the whole preceding year — while EV values have dropped precipitously.

iSeeCars visualizes the crash in a chart below:

The latest few months’ worth of data shows another precipitous drop, even after used electric car prices stabilized near the end of 2023. In part, that’s likely down to Hertz’s decision to dump 20,000 2- to 3-year-old Teslas into the market. Several automakers (including Tesla itself, actually) have also had to rethink their new EV pricing, resulting in remarkable cuts that, in turn, affect the used market.

Some EV models lose value far faster than others

The study also singles out particular models that fall far faster than most gas-powered models. Even as the used EV market continues to drop, some examples are on an accelerated slide, with the worst being the Jaguar I-Pace. Among the top 10 used cars with the biggest year-over-year price drops, Jaguar’s flagship (and only commercially available EV, so far) lost over 30% of its value over the past year. Used I-Paces now trade hands for $32,651 on average, representing a $14,053 — or $1,171 each month — between May 2023 and 2024.

Other EVs don’t fare much better. The Chevrolet Bolt, which has also seen a glut of used inventory hit the marketplace, lost 28% of its average value over the past year. The Hyundai Kona Electric dropped 26.5%, the Niro EV lost 24.8% and the Nissan Leaf (one of TFL’s favored choices if you want a dirt-cheap EV) lost 24% of its value.

One important takeaway from iSeeCars‘ data is the other side of the “some cars depreciate faster than others” coin. While the I-Pace is on a downhill luge toward rock-bottom prices, Tesla models do fare better than most. The Model 3 lost 23.9% of its value year-over-year, according to this study, while the Model X dropped 18.8% and the Model S dropped 15.8%.

In the short-term, this downward trend is likely to continue, as iSeeCars points out. Some models are still too new to determine used values over five years, like the Hyundai Ioniq 5 or the range of EVs from luxury automakers like BMW or Mercedes-Benz. Relatively cheap gas prices, which at the moment continue to drop despite being in the summer travel season, and a renewed focus on hybrids over pure EVs will likely see used EV values fall throughout the coming months.

If you want to buy an EV, going used is a far more appealing option

Taking the EV market crash at face value, it’s certainly tough to justify buying any new battery-electric car while prices remain well above their gas-powered counterparts. That’s long been part of the narrative whenever folks discuss EV adoption: The only way it will actually happen at-scale is for EVs to get much, much cheaper.

In the used section of the market, at least, that is actually coming to pass. It is undeniably a value crash that punishes early adopters, but one angle the study doesn’t cover is the opportunity for those who may be on the fence about getting into an EV. “It’s clear used car shoppers will no longer pay a premium for electric vehicles,” says iSeeCars executive analyst Karl Brauer, “and, in fact, consider electric powertrains a detractor, making them less desirable — and less valuable — than traditional models.”

That thesis definitely touches on the “over my dead body” portion of the market who are dead set against ever buying an electric car, under any circumstance. However, for a lot of folks it’s an economic question more than anything, and that’s where the first part of Brauer’s statement should come into sharp focus.

No matter what sort of vehicle you’re shopping for, it’s inadvisable to pay a high premium if you’re looking to get at least some of your cash back when it’s time to sell. That’s especially true for EVs, so a tanking market that brings prices down to earth (or even right into the ground and beyond) makes them a smarter second-hand buy.

Maybe not right this second, as prices will likely continue to drop over the coming months, but it looks like the stars will soon align for those looking for a cheap and simple-to-run commuter or are actively seeking to ditch their conventional gas-engined car. That said, you absolutely should not buy any electric car under the impression it will keep its value or even appreciate. That obviously isn’t going to happen, but if you’re just looking for something to run for a couple years, while it’s still under the original battery warranty, a used EV may be a compelling way to go. However, even a cheap EV doesn’t fit everyone’s lifestyle, so it’s important to remember that you should buy the best kind of vehicle that fits your budget and your use case.