Germany's Used Electric Car Market Is Dead

tendata blogTrade Trends News

ten data blog23-01-2024

When it comes to used electric cars, Tania Erges' emotions hit the freezing point. The used car seller from St. Imbert in Saarland currently has two purely electric cars in her yard. They will probably stay there longer because, "The used electric car market in Germany is dead. There's zero demand," Erges says.


That's why she's trying to sell the two EVs abroad. "There is still a demand for cars in Scandinavian countries and Switzerland. People just have a lack of trust in Germany," says Erges.


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Ownership of Used Electric Cars Remains Virtually Unchanged

Only about 97,000 used electric cars were sold in Germany last year, according to the Federal Motor Transport Authority. That's just 1.6 percent of the entire used car market. What are the reasons for this skepticism? One reason: high prices. On November 23, the average price of a used electric car on the mobile.de platform was around 38,000 euros, nearly 10,000 euros more than the average price of a used diesel or gasoline engine.


For most potential buyers, this is too expensive. According to a market analysis by mobile.de, they would like to spend around €14,000 less on average. Supply and demand hardly match. For internal combustion engines, the gap between the cost of the car and the dealer's charge is much smaller, at around 8,500 euros. mobile.de spokesperson Nils Möller says: "We believe that prices will have to be lowered even further this year in order to once again meet consumers' expectations."



Electric Used Car Prices Fall Even Further on Average

Real sales prices are already under pressure at the end of 2023. According to data from the trade association DAT, electric cars in use for three years are selling for 4.3 percent cheaper than at the beginning of the year. Prices for gasoline engines (0.5 percent) and diesel engines (2.7 percent) of the same age have fallen less.


Used car prices will also continue to fall as some manufacturers are now offering higher discounts on new EVs. However, this may further increase customer reluctance, as the resale value in a few years' time cannot currently be realistically quantified. This is why, according to mobile.de, four times as many customers opt for the leasing model when buying a used electric car as for a combustion-engine vehicle.


Prices are still high, residual values are unclear, plus the variety of used cars is still small: a big problem for dealers is the fact that the number of lease returns and used company cars is set to increase significantly this year. Used car dealer Elgess explains that every car in a dealership's yard puts a strain on the balance sheet, especially electric cars. "The residual values set at the beginning of the lease were correct. But they are no longer suitable for the current market. That means it's obvious from the start that you're losing money."



Batteries, an Unknown Market

The biggest uncertainty for customers is the drive itself - especially the battery. It is a core component of the car and can account for almost half of its value. Most manufacturers now offer an eight-year warranty. That said, ADAC recommends checking the "health" of the battery before buying a used EV, explains ADAC spokesperson Micha Gebhardt: "That way you know with relative accuracy whether you're buying a pig in a poke or whether the car is still in good working order. "


There is no standardized test for battery health. Usually dealers can only read their own brands. But the initial system can check almost any model. By the middle of this year, the Motor Vehicle Umbrella Association wants to work on a uniform rapid testing solution for all dealers and repair shops. Experts recommend insisting on a battery certificate when buying a used car.



Charging Also Still a Problem

According to the Motor Vehicle Umbrella Association, in addition to prices and batteries, Germany still lacks a high-performance charging infrastructure. This is why electric vehicles have had such a difficult transition to the private sector and remain a niche product. According to official statistics, 80% of grant applications since the introduction of the Eco Bonus have been submitted by companies. Electric company cars are particularly attractive thanks to tax incentives.


The federal government actually has very ambitious plans. German Chancellor Olaf Scholz announced in December 2021 that by 2030 there should be 15 million electric cars on German roads. Experts agree that without a functioning second-hand market, this goal is utopian.


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