Carwow supply and demand data tells us that there is one conspicuous portion of the used car market where there is a sizeable gap between consumer interest and what retailers are offering: used electric vehicles (EVs).
Despite negative press in some media outlets around consumer appetite, the reality is that EV consideration amongst buyers is fairly high, with 41% of people surveyed by Carwow in September believing it’s likely that their next car will be a plug-in hybrid or EV.
Looking specifically at car reviews, Carwow’s top two in 2023 were both EVs, and that theme has continued through this year, with eight of the top 10 most viewed reviews being on EVs – including our Car of the Year, the Volvo EX30, the Audi Q4 e-tron and Tesla Model Y.
However, this increase in demand for used EVs is not being met with an increase in supply on forecourts and retailers reticent about used EVs could be shunning a ready-made profit opportunity.
In a recent poll of retailers actively bidding in Carwow auctions, 78% said they were currently choosing not to buy used EVs; the primary justification (cited by 30% of respondents) being a ‘lack of demand’. Just over a quarter (26%) of those questioned said they are not stocking used EVs due to ‘market volatility’, while 20% said it is because they simply had no interest in selling EVs. Those who are stocking used EVs say they are doing so in low numbers to protect profit if demand stalls.
However, strengthening retail demand for used EVs in Q2 led to a sharp rise in conversion rates at Carwow’s trade auctions. Indeed, in September, conversion rates at auction for EVs exceeded those of ICE cars by three percentage points, having lagged behind by up to 20 percentage points back in April.
In Q4, the case for adding used EVs to forecourts is becoming more compelling by the day. Retailers who are responding to consumer demand and selling used EVs in larger volumes are reporting higher margins and faster stock turn. The average stock turn for a used EV is 46 days, which is nine days fewer than a typical used petrol model (55-day average).
Furthermore, EVs now comprise a growing proportion of the qualified, higher-intent enquiries that we direct to our dealer partners. In August, it was at 20.7% of all chargeable Carwow enquiries, which is the highest it has been for the last 12 months.
Used EVs undoubtedly offer a good potential profit opportunity for dealers, it’s just whether more are willing to take the plunge to capitalise on them.
Sally Foote is chief commercial officer – Sell My Car, Carwow