‘Significant mismatch’ between supply and demand as EVs pile up in used car market

Australia’s used car market is filling up with a glut of unsold electric vehicles, as wary consumers steer clear amid concerns about battery life and resale values plummet.

Australia’s used car market continues to see a glut of unsold electric vehicles, as wary consumers steer clear amid concerns about battery life and resale values plummet.

New figures from the Australian Automotive Dealer Association (AADA) and automotive insights company AutoGrab showed there were 4013 used EVs up for sale in May compared with 1647 sales, the lowest ratio of listings to sales of any category.

By comparison, there were 179,477 petrol cars listed and 120,912 sold, while the diesel category saw 101,398 listings and 61,518 sales.

Hybrids also fared much better than EVs with 10,928 listings and 7168 sales, while plug-in hybrids saw 315 listings and 176 sales.

“If you look at all fuel types, EVs are by far the most oversupplied of them all — how many are for sale versus how many are selling,” said AADA chief executive James Voortman.

“I guess that’s just the product of people not being certain about battery life, there might be a range of older EVs on the market like those first-generation (Nissan) Leafs.”

The Nissan Leaf first launched more than a decade ago. Picture: Supplied

It comes after the data published by the AADA earlier this year suggested used EVs see a dramatic drop in their retained value after two years.

EVs less than two years old retained 82.8 per cent of their original value when resold in December 2023, but this plummeted to 57.6 per cent for EVs between two and four years old, while EVs five years or older were worth less than one quarter of their original purchase price.

“What’s happening in the EV market is no different than what happened when hybrids were first brought to the market around 20 years ago,” said Mr Voortman.

“It takes time to accept these new technologies. We saw hybrid sales struggling initially, there were questions around adequate servicing and repair, battery life, the price premium. These are all the things we’re seeing in EVs. I think it’s a little bit unfair to expect customers to make the step into new technology so quickly, when it does have some changes in terms of the way you live your life. It’s a big ask.”

It wasn’t all bad news, however, as sales of used EVs increased by 8 per cent in May to 1647 compared with 1525 the previous month, beating out hybrids on 6.6 per cent, diesels on 6.2 per cent and petrol cars on 3.3 per cent.

Tesla electric cars stationed in a storage area in Belgium. Picture: John Thys/AFP

And EVs were the only fuel type to experience a reduction in supply, down from 4331 listings in April to 4013 in May, which Mr Voortman said was “to be expected given the significant mismatch between demand and supply of used EVs”.

Overall used car listings grew 7.2 per cent on the previous month to 296,542 while sales increased 4.4 per cent to 191,625.

Just under two thirds of listings and sales were private versus dealer.

The continued growth in used cars for sale over the past 12 months has put downward pressure on prices, in turn leading to an uptick in sales.

The average time to sell has increased slightly to 45.5 days.

Australia’s best-selling used car remains the Ford Ranger, followed by the Toyota HiLux.

Retained values continue to gradually decline, with passenger vehicles holding their value best in the two to four year age bracket at 84.1 per cent.

“Vehicles with the strongest retained values are largely sought after and reliable Japanese makes in both the passenger car and SUV segments as well as in the two- to four-year and five- to seven-year categories,” Mr Voortman said.

AADA chief executive James Voortman. Picture: Jamila Toderas

He added that in the run-up to end of financial year “we’re seeing increased activity in both new and used cars, but we’re seeing especially now the supply of used cars is really coming back”.

“At the start of the Covid period the used car market was very tight, it meant there were higher prices,” he said. “We’re now seeing a 12-month or longer trend of supply coming back, prices coming down, cars taking a little longer to sell. It’s not a bad time to be in the market for a used car.”

But the AADA has warned that consumers should be on the lookout for scams when buying private, which also comes with the risk of odometer fraud and the lack of statutory protections.

“Car buying scams generally are perpetrated by non-dealer, private individuals who are operating on classified sites on social media or other publications,” Mr Voortman said.

“With the proliferation of online car scams, buyers need to look out for some of warning signs such as prices that are too good to be true, suspicious odometer readings, sellers wanting payment prior to inspection, unusual email addresses or unrecognised phone numbers, and sellers only willing to communicate via email or text message.”

Originally published as ‘Significant mismatch’ between supply and demand as EVs pile up in used car market