Electric vehicles "underperformed the market significantly" in 2023 second hand values

The Australian Automotive Dealers Association (AADA) and AutoGrab have compiled 2023’s used car sales data into the Automotive Insights Report (AIR) which paints a picture of the current market.

Throughout 2023, the pandemic’s effects lessened and used car prices slowly dropped in response to improved new car supply. For the most part, used car values are up compared to a decade ago – you can read the full breakdown here – but the market for electric vehicles isn’t so promising.

Of the used cars listed for sale, 96 per cent were petrol and diesel models, while hybrids made up 3.1 per cent of the pie. Plug-in hybrid (0.1%) and electric vehicles (0.7%) accounted for less than one per cent.

Compare that to new EVs, which made up 7.2 per cent of 2023’s record sales, and it’s clear there’s a long way to go before a mature used electric vehicle market emerges.

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As in new electric car sales, of the 12,051 used examples sold it was Tesla that dominated (36.4 per cent) followed by MG (14.6 per cent) and Nissan (8.2 per cent). Expect this year to bring more turbulence with the advent of even more affordable options from China.

Beyond the smaller pool of choice, used electric vehicles were also valued much lower than combustion-engined counterparts.

Two to four year old combustion-engined cars retained 85.9 per cent of their value, compared to EVs which kept just 57.6 per cent of their value. The AIR described the residuals as “incredibly low” and noted EVs had “underperformed the market significantly.”

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Some of the used electric vehicles you might be able to pick up for a bargain

From the start of 2023, retained values dropped 15.6 per cent for electric vehicles under two years old, and a huge 23.4 per cent for those between two and four years old.

By the end of the year, the average time from list to sale of an EV had climbed to 75 days – the longest of any category in the AIR.

The AADA’s report notes a few factors in this, chiefly changes to the fringe benefits tax (FBT) structure that made leasing a new electric car far more attainable, as well as the influx of affordable options from China and the ensuing price wars.

There are also the unknowns of electric vehicle maintenance. While there may be far fewer moving parts and less brake wear, there’s a big cost if the battery goes boom (though most are covered by eight year/160,000km warranties), and Tesla only offering a four-year warranty will affect residuals.

While this might all sound like doom and gloom for prospective EV buyers, it could be a win for those on a tighter budget willing to chance a used vehicle. If you're after a sedan under five years old for about $60K, for example, you're remarkably well served by Tesla Model 3s in the classifieds.