FLEETDRIVE
However , lower costs in maintenance and fuel typically translate to long-term financial benefits .
As new market entrants drive down the price of a new EVs and the second-hand market becomes less volatile over time , the TCO for an EV only becomes more favourable . TCO analysis from Europe that factors in fuel and maintenance savings shows that EVs are actually up to 18 % more cost-effective than their ICE equivalents , even accounting for lower residual values .
Why the resale market is not performing as strong
Misconceptions around battery health dominates consumer concerns about second-hand EVs and impacts the resale market . Data from European studies shows that average EV battery degradation is just 1.6 % per year , far less than most consumers expect . In reality , for most EVs , the original batteries are expected to last the useful life of the vehicle . Battery degradation does not lead to the need for battery replacement , it will typically just reduce the useful range of the EV by a relatively small amount over a long time period .
Meanwhile , aggressive price reductions for new EVs from some brands have distorted residual values across the broader EV market , which adds to both volatility and buyer uncertainty .
The limited number of second-hand EVs available for sale in Australia amplifies market fluctuations . For example , one auction house sold just 300 EVs last year compared to over 60,000 ICE vehicles . This low volume means minor shifts in supply or demand can disproportionately affect the statistics .
As the EV market matures in Australia , it is expected that these consumer concerns will be reduced as the public becomes more comfortable with the emerging technology .
Where the work needs to happen
There are a number of measures that have been tested overseas , and in some cases in Australia , to help develop the second-hand EV market . Ultimately , they can be grouped into three main categories :
1 . Educate the market and address misconceptions Misconceptions about range , performance and battery life persist for both new and used EVs so educational campaigns and transparent communication are essential . Although , it is expected that it will take time for consumer sentiment to improve .
ISSUE 51 FEBRUARY 2025 / WWW . AFMA . ORG . AU 23