Used Tesla Model 3 demand drives electric vehicle values higher

The high demand for used Tesla Model 3s has contributed to greater bid volumes and higher conversion rates for electric vehicles (EVs) at auction during May and June, according to Aston Barclay.

It saw the Tesla Model 3 top its June EV desirability index with recent price corrections in both the new and used markets further creating demand for the all-electric saloon.

The June EV desirability index confirms dealers are generally buying the lower value used models with the Renault Zoe and Nissan LEAF achieving the top two places.

Tesla’s Model 3 and the Renault Zoe were also placed one and two in the overall desirability index Aston Barclay publishes each month of more than 250 used cars which reinforces their popularity among buyers.

Aston Barclay has seen EV prices begin to settle down in April and May with prices falling by 4.8% (£1,087) to an average of £21,342 at 30 months and 20,741 miles.

This compares with average used EV prices during Q1 of £22,429 at 30 months and 21,135 miles.

However, while prices are now much lower than their peak of £31,378 in Q3 2022, the market fall has slowed down and there is renewed hope they are now finding their ‘new normal’ in the market, says Aston Barclay.

“2023 has certainly seen used EV prices start to stabilise and used car dealers have responded with more bids and higher conversion rates,” explained Nick Thompson, Aston Barclay’s director of sales.

“While the price reductions announced by Tesla haven’t been widely popular in the industry it has made the Model 3 more affordable to second-hand buyers which has fuelled demand.

“It’s early days and there is still a degree of caution from dealers around EVs, but it has been a positive start to the summer,” he added.

Aston Barclay's optimism around the market for used EVs comes amid growing concern that the poor performance of EVs in the used market could force leasing companies to increase monthly rentals on new electric cars.

Used EV values have collapsed in recent months, with 12-month reductions of 20-25% not uncommon as Tesla’s price cut in January spooked an already volatile market.

Indicata reported used EV values had fallen by 21.2% in the first four months of 2023 alone. 

Paul Hollick, chair of Association of Fleet Professionals (AFP) told Fleet News at 10: "The lease co's are massively concerned about EV remarketing performance.

"They are holding the line as best they can to try and make sure that they don't upset the applecart, particularly with lease rates for our members and for fleet managers across the country.”

Aston Barclay’s monthly index takes into consideration three key metrics: web views prior to sale, number of physical and online sale bids, and sale price achieved as a percentage of CAP average.