EV Prices Old and New Are Coming Down

You know what they say about the global automobile industry these days: something old, something new, something tariffed, something subsidized (yes, that doesn’t rhyme, shut up). 

On Monday, executives at Stellantis and Renault struck a cheery tone at the Paris Auto Show, saying they believe the market for electric vehicles is about to see a rebound in demand as prices come down. That’s for new vehicles. In the used EV market, prices have already been coming down, according to a Monday report in The Wall Street Journal — sometimes to the chagrin of EV owners. And the market reset for new EVs could make matters worse for them. 

A New Hope

Over the past year or so, the EV industry reached its awkward teenage phase, economically speaking. All the monied early adopters were already kitted out with their electrified rides and the next tranche of demand was a little out of reach, as most new EVs still aren’t quite cheap enough to be classified as mass-market consumer cars (with the exception of Chinese EVs, the cheapness of which has caused quite a bit of geopolitical wrangling).

As a result of the flinching demand, automakers have scaled back some of their plans for EV production, so 2024 has been a slightly pallid year for the industry. But auto executives in Paris were pretty upbeat, pinning their hopes on upcoming affordable vehicles:

• “We may be getting close to a tipping point,” Thierry Koskas, head of Stellantis-owned Citroën, told reporters. Citroën debuted a €23,300 ($25,411) EV in September, and says it will introduce a cheaper model that costs around €19,000 next year.
• Meanwhile, Stellantis CEO Carlos Tavares told the Financial Times that companies pulling back on their EV investment could be walking into a “cost trap,” as drawing out the energy transition would just cost them more in the long run.

While automakers wait for the demand pendulum to swing back on new EVs, the used EV market has done a complete U-turn on pricing. In August, used EV prices actually fell below the average for used gas-guzzling cars, whereas just two years ago used EVs cost roughly the same as a brand-new EV. 

Undercut: This is great news for the energy transition, but less-great news for people who’ve leased EVs only to find that dropping prices — for example instigated by companies like Tesla, which has been slashing all year — have punched a hole in their car’s value. One Tesla owner told the WSJ he bought a new Model 3 in 2023 for $35,000, but Tesla’s discounts meant that at the start of this year it was worth $10,000 less than what he owed on his lease. Ultimately, he traded it in for a Kia.