Latest News

No One Wants Used EVs, Making New Ones a Tougher Sell Too


S&P Futures




Dow Futures




Nasdaq Futures




Russell 2000 Futures




Crude Oil
















10-Yr Bond
















Bitcoin USD




CMC Crypto 200




FTSE 100




Nikkei 225




(Bloomberg) — The shift away from cars with dirty combustion engines is running into a new hurdle: Drivers don’t want to buy used electric vehicles, and that’s undermining the market for new ones, too.

Most Read from Bloomberg

Hyperloop One to Shut Down After Failing to Reinvent Transit

Harvard Financial Pain Grows as Blavatnik Joins Donor Revolt

Tencent Leads $80 Billion Rout as China Rekindles Crackdown Fear

Vilified Zero-Day Options Blamed by Traders for S&P Decline

Giuliani Files for Bankruptcy After $148 Million Defamation Loss

In the $1.2 trillion secondhand market, prices for battery-powered cars are falling faster than for their combustion-engine cousins. Buyers are shunning them due to a lack of subsidies, a desire to wait for better technology and continued shortfalls in charging infrastructures. A fierce price war sparked by Tesla Inc. and competitive Chinese models are further depressing values of new and used cars alike, threatening earnings at rivals like Volkswagen AG and Stellantis NV.

Because most new vehicles in Europe are sold via leases, automakers and dealers who finance these transactions are trying to recover losses from plummeting valuations by raising borrowing costs. That’s hitting demand in some European markets that were in the vanguard of the shift away from fossil fuel-powered propulsion. Some of the biggest buyers of new cars, including rental firms, are cutting back on EV adoption because they’re losing money on resales, with Sixt SE dropping Tesla models from its fleet.

“When a car loses 1% of its worth, I make 1% less profit,” said Christian Dahlheim, who heads VW’s financial services arm. The issues with secondhand EVs, he said, have the potential to destroy billions of euros in earnings for the broader industry.

The problems are expected to intensify next year, when many of the 1.2 million EVs sold in Europe in 2021 will come off their three-year leasing contracts and enter the secondhand market. How companies tackle this problem will be key for their bottom lines, consumer confidence and ultimately decarbonization — including the European Union’s plan to phase out sales of new fuel-burning cars by 2035.

“There isn’t used-car demand for EVs,” said Matt Harrison, Toyota Motor Corp.’s chief operating officer in Europe. “That’s really hurting the cost-of-ownership story.”

Companies can funnel battery-powered cars into mobility offerings and ride-sharing startups, but there’s limited demand from these businesses. Unwanted combustion cars often end up in Africa, where their poor state causes pollution issues. That market is largely shut to EVs because it has no viable infrastructure to charge them.

China offers a cautionary tale. Lucrative subsidies turned the country into an EV giant, but also produced weed-infested graveyards of abandoned battery-powered vehicles. Any similar eyesores in Europe or the US may strengthen calls from conservative politicians to roll back aid for the industry, with key elections coming up in the US and Europe in 2024.

Read more: China’s EV Graveyards Show Dark Side of Frenetic Development

Warning signs around EVs appeared early this year when Tesla started aggressively cutting prices in an effort to prop up sales. That sparked a price war as other manufacturers followed, eating into profitability for some and pushing up already steep losses for others.

Prices for secondhand EVs slumped by around a third in the year through October, compared with a decline of just 5% in the overall used market, according to sales data from, a website that ranks cars and dealers. Used EVs take longer to sell than gasoline models even after significant price cuts, the group said.

In Germany, Europe’s biggest auto market, most new vehicles are first sold as company or fleet cars and then re-enter the private secondhand market one to three years later. But with orders even for new EVs slowing, more and more used models are sitting on lots longer than 90 days, meaning they’ve become “risk inventory,” according to the Deutsche Automobil Treuhand market researcher.

“One has to slash prices significantly just to get customers to look at EVs,” said Dirk Weddigen von Knapp, who heads a group representing VW and Audi dealers.

Part of the problem is that the industry is handling secondhand EVs for the first time. While combustion-engine cars can be quickly valued via their age and mileage, there are no tests in widespread use that determine the quality of a battery, Weddigen von Knapp said. The battery represents around 30% of an EV’s value, a share that is expected to decline in the coming years, according to BloombergNEF.

To be sure, some EVs are performing well years after their introduction, with less-than-expected battery degradation, said Mike Tyndall, an analyst at HSBC. Teslas can sell quickly in the secondhand market because of the brand’s reputation as a technology leader and its regular wireless software updates. The quirky i3 electric car BMW AG introduced a decade ago has even developed a cult following.

Still, most consumers remain reticent buying used EVs. Manufacturers are already working on new battery technologies including solid-state that promise cheaper cars with longer ranges and faster charging. The likes of Mercedes-Benz Group AG and BMW have announced plans to introduce several next-generation EVs around mid-decade, while Volkswagen, Stellantis and Renault are developing models costing €25,000 or less.

Read more: VW Shows €25,000 EV to Compete Where Tesla Has Left an Opening

Ayvens, a fleet management company handling around 3.5 million vehicles, said the uncertainty around EV technology will convince more customers to lease rather than buy — accelerating a shift away from owning a car to driving it for a fee.

“EVs are a booster of the transition of ownership to usership,” said Annie Pin, Ayvens’ chief commercial officer.

–With assistance from Craig Trudell.

Most Read from Bloomberg Businessweek

One Man’s Longevity Obsession Now Includes Fountain-of-Youth Injections

What Dermatologists Really Think About Those Anti-Aging Products

The Most Secretive Longevity Lab Finally Opens Its Doors

What the Oldest Lab Rodents Are Teaching Humans About Staying Young

Michael J. Fox and Sergey Brin Take Their Push for a Parkinson’s Cure to the Next Level

©2023 Bloomberg L.P.

Musk Blasts Public Markets, Says Indexing Has ‘Gone Too Far’

Previous article

Cybertruck designer says Tesla stainless steel pickup is no experiment

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News