Car retailers who suffered “significant pain” as a result of a recent slump in used electric vehicle (EV) values could soon be seeking out zero emission forecourt stock once again, according to Cap HPI.

In a market review with AM this morning (February 14) the car valuation specialist’s director of valuations Derren Martin revealed used EV values are down 6% month-to-date, compared to a 1% rise for petrol and diesel cars (at three years and 30,000 miles) in a “very strong” February for retailers.

But he said that there was an end in sight to the decline in EV values seen in recent months.

'Once bitten, twice shy'

“For those car retailers that stocked up on used EVs in September and October – and I know many did – they will have suffered significant pain through depreciation,” he said.

“Those retailers will rightly be nervous about stocking EVs again. For them it will be a case of once bitten twice shy, but I’d say that the hit has already been taken and we’re starting to see values stabilise again.

“While there have been stocking bans on EVs in recent times I think they’ll soon be part of the scrap for stock we’re seeing elsewhere in the sector once again.”

Martin indicated signs that retailers were ready to take a hit on used EV stock and move on from recent value declines by pointing out a number of attractive offers online.

Used Tesla Model 3s are now being offered for less than £27,000 at three years and less than 40,000 miles, while the Audi etron SUV has dipped below £30,000.

He said that the arrival of greater volumes of new cars into the sector and an increase in defleet activity had triggered the EV market’s realignment, adding: “That will feed into the wholesale sector and when retailers see EVs being offered at a much cheaper price they will start buying again.”

ICE models running hot

Diesel and petrol cars are performing well for used car retailers in a market still starved of stock, making for buoyant values an strong margins.

Martin said that a strong January, which picked-up halfway through the month’s trading, had been followed by a “very strong” February for retailers.

Increases in internal combustion engine (ICE) vehicle prices can be seen across the board, with the premium sector’s diesel-powered BMW X3 seeing a 4% rise month-to-date, while the affordable petrol-powered Dacia Sandero was up 5%.

“ICE remains the bulk of the market and, while the movement in EVs has been the big story that everyone wanted to know about in recent months, there’s another really positive story to tell,” said Martin.

“The market is really strong right now and it proves what an essential purchase a used car is.

“The used car market always does well in or around a recession and the current cost-of-living crisis is no different. People need to change their cars through necessity and, increasingly, this is where they will turn.”

Competition for stock is hotter than ever, meanwhile, with no signs that a decline in demand will impact values across the sector.

“You only have to look at the TV adverts from the likes of WeBuyAnyCar, Motorway and Cazoo to see how hard people are scrapping for stock,” Martin said.