An imbalance between supply and demand in the used electric vehicle (EV) market could push prices down by up to a further 10%.

That’s according to Dean Bowkett of Bowkett Consulting, who says that consumer interest in EVs remains minimal against a backdrop of rising supply.

Used EVs have now fallen by 21.2% over the first four months of 2023 (from January 1 to May 1), according to analysis by Indicata. 

In fact, according to recent analysis by the AA, some used EVs, with less than 10,000 miles on the clock, can now be bought for half the price of a new electric car. 

Bowkett told the latest Vehicle Remarketing Association (VRA) member meeting: “We could soon be in a situation where for mainstream cars that are available with both petrol and electric drivetrains, the latter is marginally cheaper.”

Rupert Pontin, vice chair at the VRA, says that the future of EVs in the used car market is very much a live debate within its organisation.

“Indeed, there are those who believe that supply and demand are now balanced and can point to rising values for some models that appear to be underpriced," he said.

“However, others believe that further falls in value will happen, and given the swingeing reductions seen over the last year, there is an extreme degree of caution in the market.”

He added: “Fighting the forces of supply and demand is tremendously difficult, and vehicle values are very much a dynamic outcome of those factors.”

The meeting also heard from Alastair Cassels of MHA on the three key issues facing motor manufacturers during the immediate future – the forthcoming zero emissions vehicle (ZEV) mandate, distribution costs and competition from new entrants.

He says that the ZEV mandate could have huge implications for manufacturers selling cars in the UK, including some of the biggest mainstream names.

“It is possible that for those who don’t meet the mandate’s targets, fines of £15,000 per vehicle could be imposed, which is a dramatic figure," explained Cassels.

“Carmakers who don’t have sufficient EV representation in their ranges will be in very difficult positions and may have to do everything from buy credits from other manufacturers to strangling supply of petrol and diesel vehicles to balance their sales.”

The VRA meeting was held at the premises of VRA members City Auction Group in Peterborough, and also featured Rob Severs of iVendi looking at the impact of the new Consumer Duty regulations on motor finance, while there was a panel discussion looking at data issues currently affecting the remarketing sector featuring Jonathan Hartley, sales and marketing director, Jepson; Jeremy Raggett, account director, Autotek21 and Mark Rose, managing director, Tracker.

Pontin concluded: “Our members are living through a time when our sector is perhaps seeing more change than at any point during their working lives and the VRA is playing a crucial role in helping businesses keep abreast of the latest developments, something that can be seen in our growing membership base.”

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