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With the Rising Demand for Electric Vehicles, Where Is the Used Car Industry Heading?
Yong Lee • March 26, 2022
The increased presence of electric vehicles on our roads raises an obvious question: how will this expansion affect the used car industry? Better yet, should your next car be an EV or are you better off sticking with a used gasoline-fueled vehicle?
Although driving an electric vehicle is believed to be better for the environment, the reality is that for most people battery-powered vehicles are out of their normal vehicle purchase price range.
As of 2022, the average price of an electric vehicle has gone up 22 percent year over year. Meanwhile, prices of conventional gas-powered vehicles have increased by only 14 percent. With gas prices expected to drop in October, the average American driver is more likely to choose a conventional gasoline-powered (and much more affordable) used car as their next vehicle.
Even if roads are dominated by electric vehicles 20 or 30 years in the future, those electric vehicles will almost assuredly still be bought and sold on the used car market.
Why Are Electric Vehicles So Expensive?
The average price of a brand-new electric vehicle is $66,000—an unattainable valuation for the average American driver.
If you’re wondering why electric cars are so expensive, here are a few reasons:
- Expensive batteries: Electric vehicles run on lithium-ion batteries. Manufacturing these batteries is much more expensive than manufacturing the engines of fuel-powered vehicles. Metals like lithium, cobalt and nickel, which are used to make the batteries, are often expensive to mine, process and convert into usable components.
- Microchip shortage: The pandemic-related global chip shortage is still wreaking havoc on the auto industry. As EVs cannot run without these chips, the shortage is delaying the production of new models, resulting in increased demand for electric vehicles.
- Luxury items: Many EV makes, such as Tesla and Lucid Air, are considered symbols of wealth. As a result, these and many other electric vehicles are price and quantity controlled to maintain the exclusivity of these expensive luxury items.
- Limited tax credit: Buyers looking to purchase an EV are promised a tax credit, but the credit applies to only the first 200,000 vehicles sold by the manufacturer (several manufacturers, like Tesla, have already exceeded that limit).
Eventually, as the chip shortage ends and the supply of lithium expands, EV prices could plummet, although it’s difficult to forecast when this may happen. There’s also the possibility that new manufacturing methods or technologies will make the EV industry less reliant on certain scarce materials, like lithium, in the future.
Are Prices of Used Cars Declining?
Yes. Since reaching their peak in December 2021, used car prices are steadily declining. To illustrate this trend, the average price of a used vehicle toward the end of last year was a whopping 29,969. In July 2022, that number had dropped to $23,500—still high, but a significantly less intimidating price for many drivers shopping for their next car.
If you have a used car you’re considering selling, now may be the right time to do so. In fact, as used car prices are likely to continue falling, the last few months of 2022 may be your last call for selling or trading in your vehicle while the relatively high used car prices are still in your favor.
Reasons to Purchase a Used Vehicle
If you’re looking for your next vehicle, purchasing a used gasoline or electric car over a brand-new traditional or electric vehicle has many long-term advantages:
- Less depreciation: All vehicles depreciate, but used cars retain more value than brand-new vehicles. New vehicles depreciate by as much as 20 percent as soon as they’re driven off the dealership lot. When you purchase a used vehicle, chances are it’s already undergone most of its depreciation.
- Lower insurance premiums: The cost of auto insurance depends on several factors, including your vehicle’s value. As used cars tend to be cheaper than brand-new ones, the cost of insurance is likely to be less as well.
- Warranty: Many used cars come with the remainder of their original warranty. You can also use any left over money in your budget to extend your used car’s warranty or purchase a new warranty.
- Saving money: A used vehicle will cost you a lot less than a new one. This means your monthly car payments will likely be much lower and you’ll be able to pay off your vehicle faster, saving you potentially thousands of dollars.
Sell of Trade in Your Used Car with Direct Car Buying
If you’re in the DMV area and looking to sell or trade in your used vehicle, Direct Car Buying is here to help. Our simple and straightforward car buying process allows you to get a competitive and firm offer within three business hours.
Are you looking for a used vehicle? Browse our rich pre-owned inventory to find your perfect ride.
For more information, call 877-927-6093.
Whether you’re running errands or commuting to work, you have probably noticed the increased presence of electric cars on the road. Despite the recent coronavirus pandemic, electric car sales have been on the rise. Just last year, global sales rose by 43%, which equates to more than three million electric cars sold in 2020. Even the steep prices of some electric vehicles have not deterred people from giving them a go. The technology behind these vehicles seems to justify and outweigh their higher purchase cost. After all, electric cars are extremely quiet, generate no pollution and have no gas fuel costs. The latter means that buyers save money they would otherwise spend on gas. As the world continues to move toward a safer and greener future, the goal of the automotive industry is to spearhead this movement by producing millions of electric vehicles, with vehicle options for every type of person and business. GM Is on Its Way to an All-Electric Future General Motors, one of the manufacturers trying to lead the charge in electric vehicle technology, is committed to releasing 30 new global electric vehicles by 2025. GM is shaping up to be one of the trailblazers in designing, engineering and producing EVs for every style and customer. The company is building a competitive advantage in batteries, software, vehicle integration, manufacturing and customer experience. The Detroit automaker has adopted a bold all-or-nothing strategy. GM has set an ambitious target to completely phase out gas and diesel engines for all light-duty vehicles by 2035. Additionally, 2035 will also be the year when GM goes completely carbon neutral at all facilities worldwide. GM’s Ultium Batteries and Platform GM’s focus on innovation and efficiency may be what sets them apart from competitors. The manufacturer’s Ultium batteries are big step forward in the EV industry. These large-format, pouch-style batteries can be stacked vertically or horizontally inside the battery pack. This can significantly optimize battery energy storage and layout for different vehicles, such as Buick, Cadillac, Chevrolet and GMC. The battery packs can house six, eight, 10, 12 or up to 24 modules depending on what the vehicle type requires. This grants more freedom in the product design process. With no need to design around gas tanks, engines, radiators or exhaust pipes, the Ultium battery packs can be arranged to optimize the vehicle’s design, comfort, quality of driving and storage. Moreover, Ultium energy options range from 50 to 200 kWh, which could enable an estimated range of up to 400 miles or more on a full charge and 0 to 60 mph acceleration in as little as 3 seconds. As GM further improves their Ultium battery solution, vehicles manufactured with them will be increasingly efficient, comfortable, aesthetically pleasing and benefit from prolonged battery life. GM Fleet GM’s plans to go all electric include enticing businesses to transition from traditional fleet vehicles to electric vehicles only. No matter their size or segment, GM promises businesses many benefits to investing in their products: Versatile electric vehicles for any business segment Front, rear and all-wheel drive options Low battery costs Outstanding vehicle performance GM’s multi-faceted strategy emphasizes cost efficiency. As long as electricity continues to be more affordable than fossil fuels, electric fleet vehicles that boast adequate range will become increasingly appealing. Shop for Used Electric Vehicles at Easterns Automotive Group Have you considered test driving an EV to see what the hype is all about? Or maybe you’ve already made the decision to transition from a fuel-powered vehicle to an electric-powered car? Whether you’re just curious or are resolute in your decision, Easterns Automotive offers a diverse array of used electric and hybrid cars for you to explore. If you’re in Maryland, Virginia or the DMV, call us at call us at (877) 867-0641 or visit one of our dealership locations.
Pickup trucks are an American staple. Other than their perceived magnificence and cultural significance, there are several reasons why so many people choose them over regular cars. Pickup trucks are perfect for hauling large objects, like furniture, lumber or heavy tools. They make driving in the snow a not-so-nerve-racking experience and, thanks to the generous ground clearance and optional four-wheel drive, pickup trucks are go-to vehicles for off-roading. Because of their all-encompassing functionality, quality-built pickup trucks don’t depreciate as much as other vehicles and, if cared for, retain their value for many years. However, with rising gas prices and more urban living, many people are ditching their beloved pickups for smaller and more affordable vehicles. Is it possible to have your cake and eat it too? The answer might lie in the electric pickup truck. While it retains the functionality of a traditional pickup, the electric truck relies on a rechargeable battery to power it, making it an environmentally friendly and money-saving alternative. If you’re looking to purchase an electric pickup truck, or another electric vehicle, there are several things to consider. What Is the Future of Electric Pickup Trucks? As the auto industry heads toward an all-electric future, automakers are taking the plunge and launching their own electric pickup truck models. While the release details of many models are currently somewhat vague, there is talk of seven brand-new models hitting the auto market within the next few years. Ford, Chevrolet, GMC Hummer and Tesla are trailblazers in the electric pickup truck revolution, but other lesser-known manufacturers like Bollinger and Rivian are also coming up with their own designs. Appearance-wise, electric pickup trucks will range from traditional and mainstream looking, like the Ford F-150 Lightning, to futuristic-looking, like the highly anticipated Tesla Cybertruck. Will Electric Pickup Trucks Be as Powerful as Traditional Trucks? Since hauling and towing power are fundamental features of a truck, many buyers may be skeptical to give electric variants a chance. Because so many people buy trucks for work, they want to make sure their vehicles are powerful, reliable and can get the work done without requiring an inconvenient mid-day charge. Electric pickup trucks are supposed to be equipped with large battery packs with a 200-to-500-mile range depending on the make and model. This means you can drive your truck for hours before running out of electricity. How Much Will Electric Pickup Trucks Cost? Another perceived barrier to electric pickup trucks is their cost. While electric vehicles do tend to be pricier than regular cars, their costs are likely to go down. This is largely due to the cost of electric car batteries going down, which constitutes almost half of the price of an electric vehicle. The tentative base prices for the seven upcoming models range from $40,000 for the Tesla Cybertruck to $125,000 for the Bollinger B2. The average base price for an electric pickup truck is estimated at $67,000. However, these prices are likely to drop within the next six years. Will Electric Pickup Trucks Make Good Commercial Vehicles? The short answer is yes, they will. Commercial use of pickups comes with many incentives. Work trucks are often used as commercial vehicles. Their often-predetermined routes will make it easy for drivers to locate charging stations and incorporate them into their busy schedules. Their generous mile range will allow them to drive for at least a day, if not longer, without recharging the vehicle’s battery. Commercial use of electric pickup trucks also comes with a tax credit because of their emission-free status. Shop for Used Electric Vehicles at Direct Car Buying If you’re thinking about purchasing an electric pickup truck or an electric vehicle but are not sure where to start your search, Direct Car Buying offers you a pressure-free introduction. We offer a diverse array of used electric and hybrid cars for you to explore, and we make it easy for you to sell your electric or hybrid vehicle fast and for a great price. If you’re in Maryland, Virginia or the DMV, call us at call us at (877) 867-0641 or visit one of our dealership locations.
In 2016, hybrid (HEV) and electric vehicles (EV) accounted for just one percent of all the vehicles sold worldwide. The industry estimates that by 2025 about 30 percent of all vehicles sold will be EVs and HEVs. Global sales for electric vehicles were up to 3.27 million as of 2019, and are expected to reach about 27 million by 2030. The rapid growth of electric and hybrid vehicle popularity is considered by many in the industry to be a cataclysmic shift in the auto market. Government incentives, pollution regulations and the affordability of electricity as a fuel source are driving rapid EV adoption. Auto Makers Committing to EV and HEV In January 2021, General Motors made history by being the first major U.S. manufacturer to make a total commitment to EV. Their goal is to eliminate gasoline and diesel car, van and SUV production by 2035. GM also wants to be a carbon neutral company by 2040. This switch will require a projected $27 billion investment into EV technologies and products between 2020 and 2025. At their current rate of change, GM is projecting that about 40 percent of their new vehicles will be pure EV by the end of 2025. Many other manufacturers are committing huge sums of money into electrifying existing and future models. Volkswagen has plans for roughly 70 EV models by 2030 and aims to increase EV production to 22 million with a $33 billion investment. Ford, already a leader in the HEV and EV market, will have spent $11.5 billion on new EVs by the end of 2022. One of President Joe Biden’s first actions in office was an order for the federal government’s fleet of roughly 645,000 vehicles to be converted to HEVs or replaced with EVs. Making that happen isn’t as easy as signing an order, but the symbolic gesture is an indication of where his administration wants to go. Consider the Postal Service, which accounts for about 228,000 of those vehicles . The average age of a Postal Service truck is an astonishing 28 years, and the agency spends about $2 billion a year on maintenance. The new Postal Service truck design released in February 2021 isn’t completely electric, but the trucks are designed to be retrofitted for total EV in the future. Maryland Is Outpacing Virginia in EV Adoption The electric vehicle use rate in Virginia is still less than two percent, in large part due to a limited inventory of EVs and HEVs on new and used vehicle lots and a lack of purchasing incentives. Maryland, on the other hand, was offering a limited quantity of $3,000 state excise tax credits for the purchase of a plug-in EV. The only problem is that money ran out in June 2020. There’s currently a local state bill, the Clean Cars Act of 2021 (HB 44), to extend $26 million worth of EV and HEV purchase credits per year through 2023. The new Clean Cars Act would offer a $3,000 tax credit for plug-in or fuel cell EVs and a $1,500 tax credit for plug-in HEVs (with a minimum battery capacity of 5 kilowatt-hours). The legislation also includes $1.8 million per year in rebates for people and businesses that install Electrical Vehicle Service Equipment (EVSE). Is There Really Any Cost Savings for Drivers with an HEV or EV? Absolutely – a 2018 University of Michigan study found that the average cost of powering an EV vehicle in the United States is only $485 a year compared to $1,117 for gasoline powered vehicles. Fuel costs in the United States have vacillated wildly over the past 15 years, ranging from $1.50 to $4.00 a gallon. During that period EV drivers were paying about $1.20 on average for a gallons-worth of distance. Can You Find Pre-Owned Electric and Hybrid Vehicles in Baltimore and Washington D.C.? Yes, you can browse Easterns Automotive’s diverse selection of EVs and HEVs here . EVs and HEVs represent the inevitable future of vehicle ownership. Based on some loose climate goals, 90 percent of the nation’s vehicles should be electric by 2050. None of these mandates or estimates are codified in permanent laws, but there’s no telling what types of EV and HEV regulations or requirements will be passed over the next 10 to 20 years. There’s nothing to stop you from getting an electric or hybrid electric vehicle today and cutting your fuel costs in half. Depending on where you live you may also qualify for tax credits or other purchasing incentives. Call your nearest Easterns Automotive location at (877) 867-3613 to learn about pre-owned electric and hybrid electric vehicles for sale near you .
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