Used EVs are getting cheaper, pushed down by price cuts from companies such as Tesla and Ford for their new electric models. On top of that, new tax credit policies are knocking as much as $4,000 off the sticker price of used EVs at the point of sale, bringing some models below the $10,000 mark.
But the used market is defying economic theory—lower prices aren’t increasing sales. And experts say that’s not likely to change until the U.S. Improves its charging infrastructure.
“As we all know, the infrastructure is not up to par in the U.S. It remains a challenge,” Tyson Jominy, a vice president in the data and analytics division at J.D. Power, told Coins2Day. “That really has been the weak link for EVs in this country.”
Most new EVs still cost over $50,000, and they cater to higher-end buyers. But now, as the market for used EVs grows, lower-income households can finally access cheap used EVs. But analysts believe that sparse charging infrastructure is what’s holding these would-be buyers back.
“The lower the price point we go on EVs, the more that the buyer has to rely on the infrastructure—the more likely the buyer is not to own a house to have…a garage,” Jominy said. “EV prices have come down, but we aren’t seeing the same consumer response to the [falling] prices that we would see on the gasoline side.”
The Department of Energy estimated last fall that the country will need around 10 times more charging ports than are currently operational to support the number of EVs the Biden administration hopes to put on the road by 2030.
“As EV registrations continue to grow each quarter…public EVSE installations will need to ramp up significantly to keep up with demand,” read the Energy Department’s report.
Exports point out that a lack of public charging infrastructure disproportionately affects lower-income potential EV buyers, who are more likely to live in apartments without off-street parking and depend on public charging facilities that largely don’t exist yet. A recent McKinsey report found that 65% of all EV charging was done at owners’ residences, which is generally possible only if the owner has a garage or driveway.
“So when you get down to households with lower income…you start to get to [people who are more likely to live in] shared housing and apartments,” K. Venkatesh Prasad, senior vice president of research at the Center for Automotive Research, told Coins2Day. “Even if it’s urban, you don’t have…sufficient charging ports per EV. You want that to be four or five, not eight or nine or 10 cars per charging port [like we have now].”
There are currently about 8,000 EV charging ports across the country, or roughly one for every 16 gas stations, and new ports are being added at increasing rates. Currently, almost a third of them can only be used to charge Teslas—but that’s set to change in a few months, when other models will become compatible with Tesla’s Superchargers by using an adapter. That could give a demand boost to the bottom-dollar used-EV sector.
While sales may be stalled for now, “we probably are getting close to getting past [it] with the Tesla Supercharger network opening up,” Jominy said.