Used EVs Are in Hotter Demand Than Ever

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few years Previously, Greg Platt, an electric vehicle salesman in Portland, Oregon, was having extraordinary success with one particular type of customer: foreigners. For a $250 fee, he sent the cars north, where they usually crossed western Canada by ferry. Other interested buyers will fly in from Europe. He’s still not sure why—it could be exchange rates or local incentives or a sudden enthusiasm for new technology. But the takeaway was clear: People in other countries wanted those cars, and Americans didn’t. So Platt sold new EVs in the US and used them elsewhere.

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That’s all changed. Now, there is no dearth of demand for new or used electric vehicles. The problem for the plot is supplied. His sales haven’t changed much, but now most buyers are American, and he thinks he can sell more vehicles—if he can. “The demand for EVs is astronomical, what people are willing to pay for them” is remarkable, he says. “I’ve never seen anything like this, and I’ve done it for a long time.”

Used EVs are going mainstream. Half a million could be sold in the US by the end of the year, according to estimates from startup Recurrent, more than double the sales from three years ago. A few years ago, used EVs were a tough sell. There are more options now, more familiarity, less fear about battery and range, more public chargers, and more on the way. Platt describes the psychological change simply: “It doesn’t seem that different from a normal car to most people.” It also doesn’t hurt that gas prices are rising.

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Also the supply is interrupted. Fewer new cars are available, partly due to global chip shortages, pushing buyers towards older cars. The EV market temporarily lost one of its bestsellers, the Chevy Bolt, to a widespread recall, just as those vehicles were being released from leases and relegated to older cars. Overall, prices for used EVs climbed faster than their gas-powered counterparts in the summer, according to data analytics firm MarketCheck.

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Governments are jumping in too. Local utilities have provided incentives for the EV-Curious. States including Connecticut and Oregon provide exemptions for pre-owned electric vehicles. Many programs aim to bring low-income people into EVs as electric vehicle drivers until now tend to look a certain way: Male, White or Asian, High Income, Highly Educated, Homeowner. To some extent, this reflects the cost of new EVs; Even “entry-level” models like the $44,000 Tesla Model 3 and $31,000 Chevy Bolt are out of reach for many people. But it’s also about where people live and whether they have charging facilities at home or around town. In 2020, California drivers Representation 42 percent Out of 1 million new EV registrations in the US. In states such as West Virginia and Mississippi, total registrations numbered in the hundreds.

Now Congress is thinking something similar. The House of Representatives version of the Build Back Better bill — a work still in progress on Capitol Hill — could give first-time buyers a federal incentive to buy a used electric car. A recent draft includes a $2,000 credit for a car that is at least two years old and then another $2,000 credit if its battery still has at least 40 kWh of battery capacity, which includes most electric vehicles. . The bill also includes a credit of up to $12,500 for any new electric vehicle, up from the old $7,500 federal credit that has been phased out for larger automakers like Tesla and General Motors as they sold more EVs.

Environmental advocates say the tax credit could make EVs—new and used—more attainable for middle-income earners. He argues that EVs need to be more than a luxury commodity, mostly subsidized for the wealthy.

And yet local programs have struggled to attract takers, even among low-income residents. Oregon’s Clean Vehicle Rebate Program for low- and middle-income households began in 2018 with only 516 buyers choosing a used EV or about 5 percent of vehicles purchased through the program. The rest bought new models.

Alejandra Posada, who manages the used EV rebate program for Peninsula Clean Energy, an electric utility in San Mateo, Calif., cites several reasons for the slowdown. Most of the participants in that program, which launched in 2019 for low-income residents, were looking for cheaper vehicles, leaving them with few EV options with an expanded range. Those buyers were often single-car homes and wanted an EV as their primary vehicle – not as a second car for getting around town, a more common situation for wealthy buyers. Posada says that in the first two years, about 30 of the 100 or so takers of the program opted for fully electric cars. Instead most opted for plug-in hybrids, which typically have an all-electric range of a few dozen miles before the arrival of gasoline engines.

“It’s a high-touch job,” Posada says of setting people up with a used EV. This includes helping people navigate other incentive programs to make costs more reasonable. She talks about their uncertainties regarding the logistics of the battery and range and charging. For example, many people don’t know that they can plug an EV into a standard outlet.

Many Americans are confused about the basics of EVs, says Jeff Allen, executive director of Fourth, an advocacy and research organization focused on electric mobility. One question he still hears from drivers: “‘Can I safely take it through the car wash? Spoiler: Yes,'” he says.

The apprehension about EV batteries is also reducing. “The batteries in these cars actually performed better” [car companies] Thought they would,” says Luke Walch, who owns Green Eyed Motors, a used electric vehicle dealership outside Boulder, Colorado. A cottage industry of battery health diagnostic companies has emerged to assess used cars. Together permission from the owners, recurrently collects data from 6,000 EVs on the road. “Transparency here helps accelerate the market,” says cofounder and CEO Scott Case.

Stephanie King, who lives outside Portland, Oregon, bought her second electric vehicle—and the first used—this month, her old car after an accident. Her used 2019 Kia Niro was more expensive than the new one she bought two years ago, but just wasn’t available as much, she says. For King, electric driving is non-negotiable, especially because she’s a full-time ride-hailing driver who puts a lot of miles on her car. “I couldn’t do that on my planet,” she says of gas-powered cars. She’s now doing the paperwork to take advantage of Oregon’s exemption program.

Policy experts are divided on the value of EV incentives, especially for used cars. To reduce greenhouse gas emissions, “it’s not a well-aimed solution,” explains economist Dave Rapson, who teaches at the University of California at Davis. EVs are more green than traditional cars, but they still use a dirty electric grid, and the money spent to adopt them is used to get utilities and large industries to clean up the energy supply. can be done in a better way. Tax credit programs for new EVs have proven costly, with part of the profits absorbed by automakers who may use this as an opportunity to raise prices. That kind of padding might have made more sense a decade ago, when carmakers were reluctant to build any electric vehicles, but less so now, with a dramatic shift to the all-electric lineup. (This is why the initial federal tax credits were phased out when an automaker sold 200,000 vehicles.) And as those exemptions help drive down the prices of electric vehicles, additional incentives for used cars result in additional incentives, according to Rapson. “Double dipping” occurs, as the incentive for new EVs is reduced to resale values.

But if the mission is only to get more people driving electric cars? In that regard, incentives work, Rapson says — as long as they’re designed well. The existing incentives for new EV buyers are not helpful to many as these incentives are structured to reduce the tax burden on higher incomes. A recent House of Representatives draft of the Build Back Better bill will help address that problem by applying a discount to buyers when they buy their vehicle so that it goes towards their final car payment. The dealership will be reimbursed by the IRS.

Pete Slovic, a senior researcher in the Electric Vehicle Program at the International Council on Clean Transportation, believes incentives are important to bring more and different types of people into EVs. “Our research shows that financial savings from EVs relative to household income are significantly higher for low-income households,” he says, largely because poor people spend a large portion of their income on fuel. These customers are more responsive to incentives than wealthy buyers who were going to buy a new car anyway.

Posada argues that encouraging EV sales is as important as ever because EVs are not only good for the planet, but also for those who make the switch from gas-powered cars. Provided they can find a car. In August, Posada’s program in San Mateo resumed without income requirements, and now has about 200 people queuing up, she says, with a shopping period that doubles as shoppers struggle to find the ideal vehicle. Is. It’s a pleasure to see the interest, and they hope the lack of supply is a problem that won’t discourage buyers. Because the world needs them so much. Even in the heart of the electric-happy Bay Area, EVs remain a small fraction of new vehicle registrations — too few to reach an imminent carbon-free future, in his view.


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