Prices for used EVs in the US have stabilized after climbing 12 of the last 16 months, according to electric vehicle range analyst company Recurrent’s “Used Electric Car Prices & Market Report – Q4 2022,” which was released today.
Used EV prices are leveling out
This price stabilization is great news because, based on price, Recurrent reports that only 12% of used EVs on the market today would qualify for the tax credits that begin in January 2023 as part of the Inflation Reduction Act (IRA).
The IRA includes a used EV credit that will be applied at 30% of the purchase price with a cap of $4,000.
All used plug-in electric vehicles with batteries that are at least 7 kWh are eligible if the model year is at least two years earlier than the calendar year in which the taxpayer acquires it and the cost of the used EV is under $25,000.
Plug-in hybrids are included in the used tax credit, and 50% of the cars that meet the $25,000 price cap are plug-in hybrids.
Only 17% of used EV sales from the last quarter were under $25,000, and 12% of inventory was listed below that price.
The used EV credits are limited to individuals with an adjusted gross income of up to $75,000, a head of household income of up to $112,500, or joint filers with adjusted gross incomes of up to $150,000. EV purchasers are eligible for the used credit once per three years.
Used EVs must be sold through a licensed dealer in order to qualify for the IRA tax credit. Since about 50% of used car sales today are assumed to be private, Recurrent logically points out that we should expect to see a shift to a more dealer-favored market for lower-priced used EVs.
The EV credits can be applied at point-of-sale starting in 2024.
Scott Case, cofounder and CEO of Recurrent, said:
The US electric car market is on the verge of an inflection point.
If we get this right, and the bill works as intended, the EV targets and combustion engine bans for 2035 look suddenly timid.
Recurrent has a detailed used EV tax credit explainer on its website.
The actual cost of a used EV
The Recurrent report also relays that the average resale age of a gas car is over six years old, while the average age for resale of an EV stands at just four years.
The average price for a used EV listing is $42,700 compared to an average used gas car price of $33,957. But savings on no longer buying gas must be factored in for a total EV cost. NerdWallet writes:
Over the anticipated 15-year life span of a vehicle, the electricity to run an electric vehicle can be as much as $14,480 cheaper than fueling a gas-powered car, according to a study done by the US Department of Energy’s National Renewable Energy Laboratory and the Idaho National Laboratory.
The market report also includes research from August that compares EV adoption projections. Over the course of four years – from 2018 to 2022 – US EV sales projections for 2030 more than doubled, growing from an estimated 21% to 53% over that period. It demonstrates that adoption is already happening much faster than many predicted.
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