Secondhand EVs now cost less than used gas cars - as the electric vehicle backlash accelerates

Secondhand electric cars are now cheaper than their gas counterparts for the first time - and the gap is widening quickly. 

This is according to a new study from comparison site iSeeCars, which found the cost of an average used EV dropped $265 below a typical gas car in February. 

This marked the beginning of the trend - and the price gap has grown to $2,657 as of latest data from May. 

In the last year, average used car values have dropped between 3 and 7 percent, the report found, while used EV values have plummeted between 29 and 39 percent. 

While this price drop may be good news for Americans looking for a cheaper switch to an EV, the price crash is yet another sign of dwindling US demand for the cars.

The price gap between used EVs and gas cars is growing amid demand pullback

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The study analyzed over 2.2 million one to five-year-old used cars sold between May 2023 and May 2024. 

It found that the average used EV price is down 29.5 percent year-over-year, versus 6.1 percent for the average used gas car price. 

In May this year, the average used EV was priced at $28,767 - with the typoca; gas car $31,424. 

These prices show a major turnaround from a year ago, when the figure for  an EV was $40,783 and for gas $33,469. 

'There's no denying the crash in used electric vehicle values over the past year,' said Karl Brauer, executive analyst at iSeeCars.

While EV values appeared to stabilize at the end of 2023, they experienced a substantial drop in February - and have continued to decline over the past four months. 

'It's clear used car shoppers will no longer pay a premium for electric vehicles and, in fact, consider electric powertrains a detractor, making them less desirable – and less valuable – than traditional models,' Brauer said.

A comparison between the BMW 3 Series and the Tesla Model 3 shows how price drops have differed between electric and gas cars in the last year. Both cars are compact luxury sedans with similar features. 

A used Tesla Model 3 was priced $2,635 above a BMW 3 Series in June 2023, the report found. But by May this year the Model 3 was priced $4,806 below the 3 Series. 

The price decline is easier to explain when it comes to traditional gas cars. 

Demand for used cars grew during the pandemic amid shortages in the production of new vehicles. As supply chains have recovered, this demand has slowed. 

But there are various other headwinds when it comes to the EV market - despite President Biden's push for widespread adoption of eco cars. 

In an AAA survey earlier this month, only 18 percent of consumers said they would be likely to buy an EV. 

This was down from 23 percent last year, amid rising concerns around higher costs, so-called 'range anxiety' and a lack of convenient charging stations across the US. 

'Early adopters who wanted an EV already have one,' said Greg Brannon, director of automotive research at AAA. 

'The remaining group of people who have yet to adopt EVs consider the practicality, cost, convenience, and ownership experience, and for some, those are big enough hurdles to keep them from making the jump to fully electric.' 

In the last year average used car values have dropped between 3 and 7 percent, while used EV values have dropped between 29 and 39 percent

The price of a Tesla Model 3 has dropped more in the last year than its gas equivalent, the report found (Pictured: A used Tesla Model 3 for sale in 2022)

The Biden administration has released rules to gradually phase out gas cars by 2032

Instead, Americans are increasingly turning toward hybrid cars as an alternative. 

Data earlier this year revealed hybrid cars are being snapped up three times as quickly off dealer lots than electric cars. 

According to research site Edmunds, the vehicles are also now selling twice as quickly as gas cars. 

A traditional hybrid vehicle has a gas-powered internal combustion engine and an electric motor - a battery - that both work in tandem to run the car.

In February, hybrids typically flew off dealer lots within 25 days, Edmunds found, while electric vehicles took an average of 72 days. Gas-powered cars, meanwhile, typically sold after 52 days.