Electric car stockpiles hamper resale market in Europe

The European market has not been able to absorb stocks of electric cars at the same speed as hybrid and combustion models. According to a study by Indicates –a company specializing in automotive sector data– the waiting time in stocks of 100% electric cars is 52.5% longer than a gasoline vehicle. Compared to plug-in hybrids, the interval for dealerships to sell electric cars is 29.1% longer. Read the full of the study (PDF – 8 MB).

The report, from August 2024, uses as a basis an important piece of data for the sector, the MDS (acronym in English for “days in stock”). Based on this number, automakers make their plans to serve local markets and try to balance the demand for new vehicles with the used car segment. This balance is important to boost sales and keep the market buoyant, while the imbalance makes consumers rethink their choices.

High stocks of electric vehicles tend to reduce the price of the car (supply greater than demand), which is initially a positive factor for consumers, but what is observed in Europe is that the owner of an electric vehicle faces difficulties in getting rid of his vehicle and exchanging it for a new one.

This scenario can be explained by the fact that electric cars lose value faster than their competitors, especially because there is still resistance from customers to buying vehicles with used batteries. According to the study, despite accounting for around 12.6% of sales in Europe, this share of the pre-owned and used car market was 5.18% in July.

“Just 1 month ago, demand for used BEVs (Battery Electric Vehicles) appeared to be on the rise, with BEVs’ market share in the online B2C used vehicle marketplace improving from 4.01% in January to a record high in June. However, the market in July saw BEV sales freeze and even decline, with their share falling to 5.18%.”the report says.

In addition to this user uncertainty, high inventories are also putting downward pressure on the price of new cars – this price drop has been held back by the increase in import tariffs on Chinese electric and hybrid vehicles in the European market – and the market value of a used battery-powered car is plummeting. Another factor that makes resale difficult is the technological nature of electric cars.

In addition to the decarbonization banner, automakers are betting on technological innovations with each new launch. The comparison is like a cell phone model, in which the next model will have better power, processing speed and cameras. The logic applied is the same: the older vehicle, in addition to having a used battery, is outdated in technology.

As shown by the Poder360monitoring hybrid and electric vehicle stocks is a concern for Anfavea (National Association of Automotive Vehicle Manufacturers). To this digital newspaper, the president of the entity, Márcio Lima, declared that the stock of Chinese cars in Brazil is close to 80,000, which could lead to a scenario similar to the European one.

In the Brazilian market, the trend tends to be even worse, because in addition to the distrust in purchasing a used battery, the charging infrastructure for these vehicles is another concern for consumers.

There are several cases of batteries that did not meet drivers’ expectations, as autonomy indicators can be affected by the use of air conditioning, humidity and slope of the road, as shown in the Poder360 in August.

To this digital newspaper, the president of Fenabrave (National Federation of Automotive Vehicle Distribution), José Maurício Andreta Júnior, stated that it is still too early to evaluate the market for used and semi-new electric vehicles in the country. So far, negotiations of battery-dependent vehicles correspond to only 0.03% of the segment.

Despite not mentioning difficulties in the country’s domestic market, Andreta said that the European scenario is also being observed in the USA. “American customers have been complaining about the depreciation of used electric vehicles and are returning to dealerships to buy combustion-powered cars again. However, we do not have precise volumes and time of storage in these dealerships, and we must consider that each market may react differently.”he stated.