EV values expected to plateau
Experts at cap hpi have predicted a stabilising of electric vehicle values in the second half of the year.
The market has been disrupted in the first half of the year as a result of high values, high energy costs and cheaper fuel prices, but cap hpi believes EVs are now close to reaching a plateau.
Dylan Setterfield, head of forecast strategy at cap hpi, said: “Many EV models are now looking good value, with trade values for the majority of models, where a comparison is possible, actually now below ICE equivalents. There is potential for some to increase from their current used value position. We assume further deflation in future and have factored this into our forecasts. There are small positive adjustments for the handful of models which have seen the heaviest falls.”
Meanwhile, used car volumes are expected to slowly increase in the coming months, as fleets receive replacements for some long overdue vehicles.
Setterfield, said: “Used car prices are not generally correlated with GDP growth, partly because there is a substantial element of core ‘needs purchases’ and also because reductions in consumer confidence and disposable income result in changes in used car buying, rather than preventing it; buyers may turn to older, smaller or higher mileage cars or turn to the used market instead of buying new.
“It is extremely hard to predict how retail demand will progress through the second half of 2023, especially given the complex economic situation. However, we still expect a gradual market adjustment over the next several months or so and certainly not a ‘mirrored’ fall from the earlier high point. The used value increases on some models have effectively set a new market and may not return to previous levels.”
