US used electric vehicle sales jump as prices drop

US sales of used electric vehicles rose 32 percent in the first three months of 2023 as prices fell, data provider Cox Automotive said on Friday.

The group said average retail prices for used EVs were about $43,400, down 4 percent from the same quarter last year and well below the average new EV price of about $59,000.

The group said used electric car prices were likely driven down by Tesla’s aggressive price cuts for new vehicles.

“When the market leader lowers the prices of new electric cars, the prices of used cars will follow,” Cox said.

Tesla on Thursday cut prices in the United States from 2 percent to nearly 6 percent, the fifth such reduction this year. Washington will implement stricter battery procurement requirements on April 18, limiting many tax credits for electric cars.

In the first quarter of 2023, according to Kelley Blue Book’s preliminary estimates, more than 225,000 electric cars were sold, which corresponds to about 7 percent of new vehicle sales.

General Motors said on Monday that it sold more than 20,000 electric cars in the first three months of the year in the United States, for the first time. Electric cars accounted for approximately 3.4 percent of GM’s first quarter sales in the United States.

In August, Congress created a $4,000 used electric car tax credit. Buyers must purchase a used EV for $25,000 or less from a dealer to qualify. The maximum credit is 30 percent of the sales price up to $4,000.

Adjusted gross income for buyers of used electric vehicles cannot exceed $75,000 for individuals or $150,000 for joint filers.

Cox Automotive predicts this year’s sales of new electric cars in the U.S. in 2023 will top one million units for the first time, up from about 807,000 last year, or 5.8 percent of all U.S. sales.

Cox said wholesale values for used EVs were up 3.7 percent from a year earlier, compared to an overall decline of 2.4 percent.

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