Used EVs narrow price gap with ICE

Used vehicle online marketplace Carvana has posted a Q1 EV trends report outlining some encouraging metrics for electrification. According to the data gathered, Carvana saw that its used EV sales mix achieved new highs while the price margin compared to traditional combustion vehicles narrowed.

Carvana ($CVNA) is a Fortune 500 company that has introduced unique ways of revolutionizing the automotive retail segment. In addition to car vending machines, Carvana facilitates vehicle trade-ins, financing, and used car sales in over 300 markets around the US, with the option for local pickup or home delivery of your used vehicle (hopefully an EV).

With such a large footprint throughout the US, offering tens of thousands of vehicles to customers at a time, Carvana has gathered some granular used EV sales data and compiled it into a Q1 2024 report.

The EV trends report combines Carvana’s EV sales data by state plus other metrics from Kelly Blue Book and MarketCheck. The result is a detailed Carvana report that shows used EV sales are not only on the rise but hold plenty of untapped potential for future sales growth.

Carvana saw used EV sales grow as average prices drop

The most significant metric we want to point out from Carvana’s Q1 EV trends report is the increase of all-electric models in its sales mix. As more and more new BEV models hit the US market, the number of used versions has seen a significant increase.

With more options available, Carvana has seen the average sale price of BEVs decrease, dropping from $37,000 in Q1 2023 to $31,000 a year later. The average EV sale price difference compared to ICE is also down year-over-year, from +$13,000 in Q1 2023 to +$7,000.

Used EV sales also hit an all-time high for Carvana in Q1 2024, contributing 4.3% of its total. That’s still a relatively small number, but Carvana believes used EV sales are poised for significant growth going forward. Per Carvana founder and CEO Ernie Garcia:

The significant, multi-year growth in new EV sales is a leading indicator of the potential of the used EV market. As a larger selection of EVs makes its way into the used fleet, prices normalize, and tax credits become available, more used car buyers will have the opportunity to access the EV category. Carvana has always sought to build an inventory that matches the tastes and preferences of our customers. While we maintain a diverse selection across all fuel types, we are proud to now offer more than 50 different models of EVs at a wide range of price points.

As you can see from Carvana’s graphic above, BEV sales have demonstrated encouraging growth in the US in Q1 2024. Florida joined the 4%+ threshold, as 5.2% of Carvana’s sales in The Sunshine State were BEV.

Meanwhile, some states that have been slower to EV adoption delivered record year-over-year growth, including Minnesota (+386%), Arkansas (+383%), and Kentucky (+263%).

Last but not least, Carvana points out that Federal tax credits for used EVs (up to $4,000) have been a contributing factor in improving affordability and thus, increased sales. Of the 50+ EV models Carvana currently sells in the US, 24% met all criteria to become eligible for the Federal Used Clean Vehicle Credit in Q1 2024.

Of those qualifying vehicles, Carvana points out the Nissan LEAF was the top seller, followed by the Tesla Model 3, and Chevy Volt (PHEV). The ill-fated BMW i3 and Volkswagen e-Golf round out the top five.

You can learn more about the Federal Used Clean Vehicle Credit and what EVs qualify here.

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