Second-hand sales of BEVs rose by over two thirds in the UK in the first quarter, according to data from the country's automotive lobby, as all-electric vehicles claimed a record high share of the resale market.
"Increasing numbers of battery electric vehicles (BEVs) are now entering the used sector, with Q1 sales up by more than two thirds (71pc) to 41,505 — posting a new record market share of 2.1pc," says the Society of Motor Manufacturers and Traders, or SMMT.
The strong growth seen for BEVs is compared to just 6.5pc growth seen in the entire used car market, as in total, a shade under 2mn cars were bought second-hand in Q1.
"This makes BEVs the fastest-growing powertrain as more buyers are attracted to the potential cost-saving and environmental benefits," SMMT says.
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A strong second-hand market has long been considered a vital step towards towards widespread EV adoption. However, the UK's EV resale market has been weak in recent years, however, and residual values of EVs dipped to 30pc below their pre-pandemic levels last year.
The disparity between fleet and private purchases of EVs in the UK — catalysed by a a lack of private purchase incentives — has flooded the second-hand EV market with an oversupply of vehicles as they have reached fleet refreshment age, resulting in depressed residual values for EVs.
“The surge in secondary market supply is coming from the previous increase in new sales several years ago, as well as the liquidation of several leased portfolios in the UK which have been placed into the market," a report from Kroll Bond Rating Agency said in October last year. "With an underdeveloped second-hand car market for BEVs, the increase in supply has put downwards pressure on pricing.”
As a relatively nascent technology, second-hand BEVs also suffer from quicker depreciation, as innovation occurs more quickly in a younger market than in an older one like ICE vehicles.
To sustain strong demand for second-hand BEVs, SMMT CEO Mike Hawes suggests that more must be done to incentivise private EV purchases, in line with SMMT's repeated calls on the UK government to cut VAT on battery vehicles.
"A reinvigorated new car market is delivering more choice and affordability for used car buyers and, increasingly, they are choosing to go electric," Hawes says. "To enable even more drivers to enjoy the benefits of zero emission motoring, ensuring both supply and demand remains robust is essential."
Ciaran has written about finance, politics and culture. He is passionate about e-mobility and what it means for our way of life.
Ciaran has a Masters in Ancient Philosophy from Oxford University.
