Editor's letter: Retailers must focus on used electric cars

Values of used electric cars are plummeting, as Nick Gibbs’ analysis last week laid bare. His report details that values have dropped 18% in the past 12 months and 20% since September, according to Cap HPI data, and worse could be yet to come.

This has fast become the dominant topic of discussion in the car retail world, and is the latest in a series of events that all started with Covid. Car makers stopping production during Covid caused semiconductor chips to be diverted to other industries, and then a shortage of them when car production did return.

This led to car makers prioritising production of EVs to meet CO2 targets, sending used car prices artificially high (sometimes above list price) due to the shortage of new cars. Now comes the correction, which can be painful for EV owners looking to change cars and seeing their car is worth far less than expected on part exchange, and for car makers trying to control residual values. 

Sytner is the UK’s largest dealer group, with new car franchises from the likes of BMW, Mercedes-Benz, Jaguar Land Rover, Audi and Porsche, and also a vast used car business, CarShop. Earlier this week, Sytner Group boss Darren Edwards, a man who knows all there is to know about car retail in this country, discussed the “challenge” facing used electric vehicles, something he is working through with his franchises and their customers now.

He noted that early adopters had seen the benefits of favourable taxation towards electric vehicles, while the rest of the population was waiting to see how the simple equation of range and affordability of electric cars played out. “There is a fear of buying new technology that becomes outdated,” he told me, with the range of an EV holding great sway over its value.

“As technology improves at a rapid pace, a 300-mile range becomes 350, 400, 500 – so what does that do to the 250- and 300-mile cars?”