There is a significant focus on Electric Vehicles (EV) at present and the rise in popularity in the last 12 months has been meteoric for some brands/models. For now, the bulk of consumer EV intention relates to new cars, the latest and greatest, and while not entirely out of reach, the fact is these vehicles remain considerably more expensive than non-EV alternatives.  

This makes it all the more important that as an industry we can have a strong understanding of the value of these electric vehicles as they age and progress through the near-new and used cycle. 

Every month, our local team of analysts review the data and modelling, prescribing price ahead values across the entire Passenger and Light Commercial Vehicle (LCV) marketplace. Increasingly, RedBook is being asked as to what we should, (as an industry) expect from EV future values. 

The short answer, while a little disconcerting for some, is it is still evolving.  

To give context to the above, we need to consider the effective used marketplace for EVs locally.  

According to VFACTS from 2017 through 2022, over 62,800 Battery Electric Vehicles (BEV) were registered for the first time. If we assume a realistic definition for a used vehicle as one being more than two years old, that brings the effective used BEV market down to around 12,000 vehicles, i.e., all vehicles pre-2021.  

As the chart below reveals, this limits the available brands and models, so much so that you could say that the Australian used BEV marketplace is one brand, Tesla with 70% share via two models.  

Source: VFACTS & RedBook

 

For there to be an effective used market, there needs to be more choices; more body styles, varied price points and application/ usages. Additionally, and specifically in the case of BEVs, uncertainty around battery health (the remaining usable charge for the second and third owner) needs to be cleared up.

Innovation and advancement in battery chemistry and technology is evolving rapidly, contributing to an additional degree of concern around premature obsolescence for earlier generation EVs. This also needs to be addressed to build confidence as global data indicates that EV battery health is holding up better than anticipated – at least for established EV brands.

During 2023 we will see a doubling of new EV models launching, with more to follow in 2024. Pending arrivals of key locally coveted body styles, especially seven-seat SUVs and LCV options in the form of Utes and Vans, will also significantly change the used EV marketplace. So will new vehicle RRPs that are sub $50K. Let’s also not forget the impact that Government policy can play in all of this, both positively and negatively. Beyond the infrastructure required, policy needs to be consistent and balanced. The key is not favouring one option at the cost of another. Here, observations from more advanced EV markets like Europe and China can bestow valuable learnings.

Introduction and then subsequent removal of programs or subsidies encouraging EV adoption has a direct impact on new EV sales, in turn flowing through to the used marketplace, as OEMs and other key stakeholders adjust to the volatility.

Australia need not navigate this path blindly, but until such time as there is clarity on many or most of these factors, the road to an effective Australian used EV market and the stability of used EV values will remain uncertain.