Electric Vehicle Tipping Point, has it been reached?

Used electric cars are in greater demand than ever.

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Greg Platt, an electric vehicle salesman in Portland, Oregan, has had extraordinary success with one type of clientele: foreigners. He paid $250 to transport the car north, from where they usually crossed by ferry to western Canada. Other interested parties will fly in from Europe. He’s still not sure why — maybe it’s the exchange rate, local stimulus, or just a sudden enthusiasm for new technology. But the bottom line is clear: people in other countries want these cars, and Americans don’t. So Pratt sells new electric cars in the U.S. and sell used vehicles elsewhere.

That has changed. There is no shortage of demand for electric vehicles right now, whether new or used. For Platt, the problem is supply. His sales haven’t changed much, but now that most buyers are Americans, he thinks he can sell more cars — if he can. “The demand for electric vehicles is astronomical and how much people are willing to pay for it,” he said. “I’ve never seen anything like this, and I’ve been doing it for a long time.”

Used electric vehicles are becoming mainstream. According to estimates from startup Recurrent, one million vehicles could be sold in the U.S. by the end of the year, more than double what it was three years ago. Just a few years ago, used electric cars were hard to sell. There are now more options, more familiarity, less fear of batteries and range, more public chargers, and counting. Platt described the mental shift simply: “For most people, it doesn’t seem to be any different from a regular car.” It also doesn’t hurt that gas prices have risen sharply.

Meanwhile, offers are limited. Fewer new cars are available, in part because of a global shortage of chips, prompting buyers to switch to used cars. The electric vehicle market has also temporarily lost one of its top sellers, the Chevrolet Bolt, as the vehicles are being released from leases and shipped to used car dealers. Overall, the price of used electric cars rose even faster than gasoline-powered cars in the summer, according to data analytics firm Marketcheck.

Used electric cars are in greater demand than ever.

Governments are also stepping in. Local utilities offer incentives for those curious about electric vehicles. States like Connecticut and Oregon offer discounts on used plug-in vehicles. Many programs are aimed at attracting low-income people to Electric Vehicles because Electric Vehicle drivers have traditionally tended to have a certain appearance: male, white or Asian, high-income, highly educated, homeowners. That partly reflects the cost of new EVs; even “entry-level” models like the $44,000 Tesla Model 3 and $31,000 Chevrolet Bolt are out of reach for many. But it’s also about where people live and whether they can charge at home or in cities. In 2020, California drivers accounted for 42% of the 1 million newly registered electric vehicles in the United States. In states like West Virginia and Mississippi, registrations total in the hundreds.

Now Congress is considering something similar. The House version of the Build Back Better Act — still a work in progress on Capitol Hill — could provide buyers with federal incentives to buy a used electric vehicle for the first time. A recent draft provides a $2,000 credit for cars that are at least two years old, and an additional $2,000 credit if the battery has at least 40 kilowatt-hours of battery capacity remaining (including most all-electric vehicles). The bill also includes a loan of up to $12,500 per new vehicle, which has been phased out by large automakers such as Tesla and General Motors that have sold more EVs.

Environmentalists say the tax credit could make new and used electric vehicles more affordable for middle-income people. Electric vehicles, they argue, much more than a luxury subsidized primarily for the wealthy.

However, even among low-income residents, local projects struggle to attract interest. Oregon’s Clean Vehicle Rebate Program for low- and moderate-income households, launched in 2018, resulted in only 516 buyers opting for second-hand electric vehicles, or about 5 percent of vehicles purchased under the program. The rest bought new models.

Alejandra Posada, who manages the used electric vehicle rebate program for a utility company, Peninsula Clean Energy, in San Mateo, California, cited several reasons for slow adoption. Launched in 2019 for low-income residents, most participants are looking for cheaper vehicles, so they have few options for longer-range plug-in vehicles. These buyers are typically single-car families who want a plug-in vehicle as their primary means of transportation — not as a second vehicle for getting around town, which is more common for wealthy buyers. In the first two years, about 30 of the program’s roughly 100 participants opted for an all-electric vehicle, Posada said. Most opt ​​for a plug-in hybrid, which can often travel a dozen of miles before the gasoline engine takes over.

“It’s a high-touch job,” Posada said of people hiring used plug-in vehicles. This includes helping people navigate other incentive programs to make costs more reasonable. She talked about her insecurities about batteries, range and charging logistics. For example, many people don’t know they can plug an electric car into a standard outlet.

Jeff Allen, CEO of Forth, an advocacy and research group focused on electric vehicles, said many Americans are confused about the basics of plug-in vehicles. He still hears a question from motorists: “Can I drive it through a car wash safely? Spoiler: yes,” he said.

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Used electric cars are in greater demand than ever.
Used electric cars are in greater demand than ever.