Will electric car prices go down in 2024?
Grab a used EV bargain while you can
The price of an electric car, especially a new one, is often quoted as being one of the major barriers to the mass-adoption of battery-powered motoring. In general, it’s true that electric cars are more expensive than their combustion-engined equivalents — just try comparing the price of a basic petrol-powered Vauxhall Corsa (£19,275) with the cheapest electric Corsa (£32,445).
Vauxhall, along with other electric vehicle makers, is keen to point out that potential buyers should pay more attention to what’s called the “total cost of ownership” – that includes things such as fuel, depreciation (the amount of value the car loses over time), servicing costs, insurance and tax.
Once those additional costs are factored in, over several years (the exact length of time will vary depending on the vehicle and cost of charging at home, for example) the electric vehicle will cost you less, studies have shown.
However, upfront cost is still a major stumbling block for many. So will the cost of electric vehicles drop next year, and will price parity with petrol ever happen?
Tesla and the Chinese car makers
The prices of new electric cars are starting to reduce, and much of that is because of China.
This isn’t to say that Chinese car makers are turning out cheaper EVs, although that is part of the equation, but there’s also the effect that operating in the Chinese car market is having on European, Japanese, Korean and American brands.
The most obvious example of this is Tesla. Having seen demand in the Chinese market for its cars start to wane — largely because of cheaper local competition — Tesla decided to start cutting the prices of its new models.
In some cases those cuts were quite dramatic, with £5,500 being lopped off the price of a Model 3 saloon last March, while the Model Y crossover saw its price fall by as much as £7,000.
Those price cuts were aimed at the Chinese market but benefitted new car buyers across the world, as Tesla decided to roll out the revised prices for all countries.
Doing so paid off for Tesla and propelled the Model Y to become the best-selling car on the globe in 2023, and the sixth-best-selling car in the UK — as well as the UK’s best-selling EV.
That Tesla price cut forced the hands of others, including Ford; it cut the price of its pure-electric Mustang Mach-E by £7,700.
In the meantime, the Chinese car makers are starting to push down the entry-level prices of their electric models to more palatable levels. The likes of the MG 4, already a successful car in the UK, costs from £26,995 while the newly-arrived BYD Dolphin is even more affordable, costing £25,490 for the cheapest model.
Other carmakers following suit
Headline prices for basic models will fall even further as we head through 2024. Citroën has already previewed the new e-C3, and while that small crossover won’t go on sale until the back end of 2024, it should have a starting price of around £23,000 when it does arrive, with a fairly useable range of 200 miles.
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Volkswagen’s imminent ID.2 should also have a starting price of under £25,000 when it goes on sale, and it’s expected to be joined by an even more affordable model costing as little as £17,000.
It is reportedly working with Renault to co-produce that car with the new electric Twingo. However, neither of those cars will go on sale until at least 2025.
If you can’t wait that long, don’t worry — Dacia is set to launch its Spring electric car in the UK in the summer of 2024, and its price is likely to be just £18,000.
For that you’ll get a range of only 143 miles (and a less than stellar safety rating) but Dacia boss Denis Le Vot told us earlier this year that he would happily “cut the battery in half” because data shows most Spring owners in Europe only cover about 50km per day.
BYD also has a compact electric hatchback called the Seagull; it hasn’t yet been confirmed for the UK, but could cost as little as £10,000 if it were introduced here.
It’s also hoped that Renault’s new retro-styled 5 electric hatch, set to be launched in 2024, will be an affordable car — the French car maker has said that it’s been designed to cost one third less to build than the Zoe hatchback which it will replace.
Great deals on used EVs
For those looking to buy a used electric car in 2024, the news is broadly good — the second-hand values of most electric cars have been tumbling all through 2023.
According to data from Auto Trader, across the board, new electric cars bought in 2022 have lost 21 per cent of their value already, a dramatic drop for one year of depreciation, especially at a time when the values of petrol and diesel models have remained solid.
Such a reduction means that some EVs are actually cheaper to buy used or nearly-new than an equivalent combustion-engined model of a similar age and mileage.
For the dedicated EV buyer, that can mean serious bargains. Big-money models such as the Audi e-tron GT and the Mercedes EQC have lost four-figure sums in their first year of ownership, but even smaller cars — such as the Renault Zoe — have seen significant falls.
Part of the reason for such big reductions is the expectation of obsolescence — buyers of used cars are more cautious with their cash and know that much-improved new EVs are in the offing, so are holding back on an electric purchase for the moment.
Equally, there is currently a gap opening up between the initial burst of “early adopter” enthusiasm for electric cars and the more sceptical, conservative bulk of buyers who are happy to adopt a wait-and-see attitude, or who simply don’t trust electric car tech at all yet (and that means the charging network as much as the cars themselves). There was also a knock-on effect in the second-hand market from Tesla’s new-car price cuts.
However, if you’re looking for a used EV bargain, then the advice is to buy soon as the first signs of the market bottoming out are starting to show.
Richard Walker, Auto Trader’s data and insight director, said: “The continued realignment in used electric pricing is the real stand-out so far in October, with another month of improvement after a year of decline.
“For the moment we’re seeing the stars align for second-hand EVs; greater affordability and rising prices at the pumps is helping to make them a more viable alternative to their internal combustion counterparts which are still increasing in value.”
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