When the MG dealer told Richard Hilder his new MG 4 EV had finally arrived after six months of waiting, the Derby-based business manager was elated. But then came the shock: a day later, the dealer phoned again to say his Citroën ë-C4 was no longer worth £20,900 but £16,000, so could he please find a £2000 up-front deposit and accept another £36 per month on his four-year PCP deal?
“Having waited for six months and genuinely looked forward to the car, it was like being slapped round the face then punched in the gut,” Hilder told Autocar.
He's one of the many victims of a huge crash in the value of used electric cars in the UK. Just how huge is revealed by data from pricing expert Cap HPI, which has recorded an 18% decline in EV values in the last 12 months.
The worst of the decline happened in the past six months, following a spike in values in September.
”It wasn't out of the norm to see used cars consistently selling above the cost-new price," said Chris Plumb, senior valuations editor at Cap HPI. “This was always going to be unsustainable.”
As car makers started unblocking the production pipeline that had been gummed up by a lack of parts and new cars started returning, suddenly dealers were taking in a load more trade-ins, including EVs.
Since September, values have fallen 20%. Compare that with a normal period, when Cap HPI would expect to see used car values to fall between 3-5% over double the timeframe.
Over the same 12-month period, values of diesel, petrol, hybrid and plug-in hybrid cars actually rose, and all four categories recorded some of their biggest rises in the last few weeks. So clearly this is an EV-only issue.
The problem is that EVs were prioritised by car makers during the parts crisis and in the months beforehand, partly because they were launching new models and partly because they needed the sales to ensure they didn’t get clobbered by tougher average CO2 emissions regulations both in the European Union and the UK.
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I have been seeing what cars on Autotrader are advertised at and putting the REG in We Buy Anycar and Motorway and the gap is huge for electric cars nearly £10000 in some cases
People need to see what their car is worth before commiting to a purchase
Part of the problem must surely also be that whilst EVs are a no-brainer for new company-car purchases because of advantageous tax, this tax benefit doesn't exist for the used car buyer.
I think this is a result of multiple factors. Firstly the fact that supply issues across the board for new cars have eased, and the fact that used car values have subsequently dropped means used electric cars need to compete with lower priced ICE cars. And secondly. Electric new prices are too high, so combine with the above there is no way they can compete at lower levels of depreciation