Even iSeeCars Senior Analyst Karl Brauer is surprised by the price jumps for used cars between July 2021 and the same month this year.
A recent iSeeCars study found prices of battery-electric vehicles (BEVs) rose 54.3%, with prices of used internal-combustion-engine (ICE) vehicles rising 10.1%.
“Those buying new and used (BEVs) are generally those who are writing checks for second or third or fourth or even fifth vehicles in their household,” Brauer tells Wards. “But mainstream buyers eventually must be able to buy these vehicles. And at the current prices, that’s not realistic for a lot of people.”
BEV prices had remained high at least since January 2022, when prices jumped 54.1% over January 2021. ICE-powered vehicles rose 36.3% over that same period. The rise in EV prices was due to the sudden spike in gasoline prices and the scarcity of ICE vehicles, says Brauer. (see chart, below)
A brief decline in prices for both ICE and EVs followed, though EV prices recovered more swiftly, soon outpacing ICE pricing. The main reason for EV demand is the Russia-Ukraine conflict’s impact on gasoline prices
The study shows a wide range of EVs with significant price increases, including the Nissan Leaf extended-range electric vehicle, often an afterthought in the market and, more predictably, Tesla models.
“The Bolt is not a cutting-edge vehicle, but it’s shooting up in price because it’s got those two little letters, ‘EV,’” Brauer says. “Tesla appeals to people at a certain income and technological level, that demographic. They’re not price-sensitive. But as gas prices double in a six-month timeframe, it makes it easy for those people who are on the fence about Tesla to say, ‘I’m just going to buy one.’”
The price increases come down to early adopters with sufficient household wealth and confidence in the economy seeking EVs in short supply. But as supplies increase and early adopters have the vehicles they want, prices will start to fall, especially if the economy cycles downward, Brauer predicts.
