Vehicle Market Plunge! Used EV Prices Still High – When Will They Hit Rock Bottom?

San Francisco, CA – The used vehicle market in the United States has seen a significant decrease in prices, with auctions reporting a 0.6% drop in June from May. According to the Used Vehicle Value Index by Manheim, prices have fallen by 8.9% year-over-year, hitting the lowest point since March 2021. This decline has been attributed to a decrease in demand and an oversaturation of supply.

The wholesale prices of used cars, SUVs, pickup trucks, and vans have also experienced a downturn, falling by 2.2% in June from May and 10.0% year-over-year. This decline marks a significant shift from the spike seen between January 2020 and May 2022, with prices dropping by $5,640 for adjusted sales.

The decrease in prices has impacted all major vehicle categories, with notable drops in full-size vans, sportscars, EVs, and full-size cars. Dealers who rely on auctions to replenish their inventories are feeling the effects of the market shift, as supply continues to outweigh demand.

One of the contributing factors to the current decline in prices could be the temporary shutdown of dealerships following a ransomware attack on a cloud-based management system. This disruption may have led to a decrease in purchasing power from major dealers, impacting the overall market dynamics.

Despite the recent price drops, used electric vehicle (EV) prices are still significantly higher compared to January 2020, showing a 61% increase. On the other hand, prices of used internal combustion engine (ICE) vehicles have also surged during the pandemic but have not experienced the same level of decline as EVs.

In particular, prices of used pickup trucks have seen fluctuations, with full-size light-duty trucks experiencing a spike in prices before a gradual decline, while compact pickups remain relatively stable. The market for SUVs, compact cars, and vans has also shown signs of stabilization, with compact cars becoming more affordable for consumers.

Overall, the current trend in the used vehicle market reflects a rebalancing of supply and demand, with prices adjusting to align with pre-pandemic levels. As the market continues to evolve, consumers and dealers alike will need to stay informed and adapt to the changing landscape of the automotive industry.