The rise of the used electric vehicle (EV) market in the US is creating buzz, unmistakably influenced by the increasing volume of pre-owned Teslas becoming available. This is a significant shift worth exploring, especially when you consider the trajectory of EV sales, particularly those from Tesla, which surged in late 2018 as production ramped up.
Quarters from 2018 pale in comparison to the recent explosion in EV purchases, with a distinctive uptick in sales over the past few years. This indicates that the wave of Teslas, along with other EVs from 2021, will soon be entering the used market as owners traditionally sell after three to five years of use.
Why Hertz’s Inventory Could Reshape the Used EV Market
Hertz’s decision to divest thousands of electric cars, including an intended fleet of Teslas that never reached the planned 100,000 by 2022, is reshaping the used car landscape. Rental companies operate on a model of fleet renewal, which typically means their cars are newer and replaced more frequently.
However, operational challenges have also influenced Hertz’s sell-off. From excessive tire wear to higher-than-expected maintenance costs and renter education issues, these factors have culminated in a substantial offering of used EVs to consumers.
Shopping for used electric vehicles is now more accessible, with Hertz indicating an availability of over 1,700 EVs in one region alone. The selection ranges from Tesla Model 3s to Chevy Bolts. However, it’s prudent to consider these cars may have encountered more wear-and-tear than the average used car, highlighting the need for a careful assessment before purchase.
The Big Picture: What Does Hertz’s Used EV Sale Indicate for Future Buyers?
The emergence of a significant pool of used EVs presents a dual effect on the automotive market. For one, it indicates a maturation of the EV market, creating more choices for buyers. More available used options introduce increased competition, likely accelerating depreciation for new car sales as well.
In the new car sphere, manufacturers may face pressure to be competitively priced as consumers have the option to choose from a broad spectrum of less expensive, gently-used EVs. The allure of used EVs is underscored by their more attractive price points, with some of Hertz’s Teslas being offered below $25,000, a steep discount from the new model price tags.
Xcelerate Auto‘s Perspective on the Trend: Milad Davoodi of Xcelerate Auto highlights the affordability of EVs due to the burgeoning supply and manufacturing efficiencies. Yet, the sticker shock of new models still steers many towards the pre-owned market.
There’s also the concern about battery degradation — a central consideration for used EV shoppers. Xcelerate Auto steps in to alleviate such fears, noting that while EVs typically require less maintenance due to fewer components, any necessary repairs could be costly as they usually necessitate part replacements rather than fixes.
The sentiment is echoed by KJ Gimbel, CEO of Xcelerate Auto, who emphasises the need for industry adaptation, with services evolving to support direct-to-consumer models that are prevalent in the EV market.
The shifting sands of the EV landscape, with Hertz’s actions and companies like Xcelerate Auto adapting to new consumer needs, are steering us into a transformative phase of the Electric Vehicle Era. As we witness this transition, it’s an exciting period filled with learning curves and tempting offers in the EV sector.
