The used EV market remains at risk of volatility due to the impact of new market trends, the remarketing industry has been warned.

In recent months, some stability has returned to used EV values, following a couple of years of heavy falls.

However, Auto Trader senior insight manager Louis Maxwell has warned that despite the recent picture looking more optimistic, the used EV market still faces risks.

Addressing the Vehicle Remarketing Association’s (VRA) annual seminar, Maxwell said: “Whilst there is positive news about used EV prices increasing – in November it looks pretty good and we expect that to continue for the next couple of months – unsurprisingly there is still risk within the used EV market, and all of it is driven by the new car market.

“There is of course a return to push activity, where manufacturers are offering steeper and steeper discounts on new electric models, especially as the technology improves so quickly and consumers are turning to those newer models as they come to market, so incumbent models are seeing bigger discounts.

“There’s also been more pre-reg activity, up about 35% more than the market, [although] it’s worth saying generally that pre-reg is a long, long way back from pre-pandemic levels.”

Maxwell said that the market was also being affected by increased new car market competition, arising simply from the increasing number of manufacturers selling cars in the UK.

He said: “Despite the new car market being smaller there are 17 more brands selling new cars in the UK than back in 2019. Just to highlight that, if every brand back in 2019 had equal market share, and if they all had equal market share today, every brand would have a 39% drop in new car sales.

“So, there’s a drop in the overall market, and in that there are more brands selling new cars. There are more brands now selling EVs than there are selling pure ICE cars, that’s how much the market is changing.”

While there are still risks facing remarketers, Maxwell did also note how the availability of more affordable used EVs had improved for buyers. 

He said: “About 3% of all used EVs were under £20,000 two years ago. Now, it’s a third of all used EVs. That shows you just how much the market has changed, and of course many EVs have reached price parity as well. 

“Two years ago, a three-year-old Tesla Model 3 was £20,000 more expensive than a BMW 3 Series. Now, they are at price parity.”