Today, we’re going to delve into a critical aspect of EV adoption: affordability. One of the biggest concerns with worldwide EV adoption is the aspect of affordability. The majority of brand-new EVs do, in fact, cost quite a lot of money, with most starting in the upper 30k to low 40k mark. That may not sound like a lot to many people, as according to Kelley Blue Book, the average selling price of a car in July of 2023 was $48,334. But, for many, that is far too expensive.
According to a study done in 2019 by The Harris Poll for Ally Financial, nearly 70% of Americans would consider buying their next vehicle used. That’s an extremely high percentage of consumers willing to explore the used car market. So, it’s crucial to consider how prices of EVs are doing in the used market, not just strictly focusing on the price of new vehicles.
EVs Are More Affordable Than You Think
Many people believe that the average cost of a new EV is around $80k. I’ve talked to multiple people who thought a Tesla Model Y costs around $75k brand new, when in reality, a Model Y Long Range Rear-Wheel Drive costs about $37k, including the federal tax credit. But even with that price, it is still too expensive for many people.
So, how do we get the incredible savings and benefits that come with an EV over to the large group of people who may only want to spend $15-20k on a vehicle? Enter the used EV market, a gold mine that so many people just aren’t talking about. Specifically, the used Tesla market, which has a plethora of options and prices to suit almost any potential buyer.
Just a quick search on CarGurus.com, my go-to place to search for used cars, and you can easily find a 2022 Tesla Model 3 RWD with 135k miles for a little over $15k. That’s a steal, especially since this vehicle has the Lithium Iron Phosphate (LFP) battery, which has much higher longevity and durability than many other battery chemistries. A vehicle like this one has many years of life left in it.
But what if you prefer a bigger vehicle like an SUV? Well, good news, because used Tesla Model Y’s don’t cost too much nowadays either. Another quick CarGurus search later, and here’s another, easy-to-find example of a 2020 Tesla Model Y Long Range AWD with only 67k miles for a little over $21k. While a bit more expensive than the sedan Model 3, this is still one amazing deal, especially considering the low mileage as well.
What About Other Brands of EVs?
Unfortunately, at this time, Tesla is realistically the only affordable used EV option, mostly due to the sheer number of Tesla vehicles circulating in the market. There are some other options, such as a Chevy Bolt for around $11k on the used market. But it’s difficult to recommend a vehicle like that due to its extraordinarily slow 55kW max charging rate, which will take you to 80% in about an hour, compared to the Tesla Model 3 and Y’s 250kW max charging rate, which takes only 15-25 minutes to get an 80% charge. This makes road trips in a Chevy Bolt essentially a no-go, but if you want strictly an around-town vehicle for cheap, the Bolt could be a very good option.
What About Tax Credits?
Luckily, in the US, the federal government offers up to a $4k point-of-sale credit for a used EV priced under $25k. That is what makes so many of these low prices a reality. Starting at the beginning of 2024, you don’t have to wait until tax season to get your credit. Instead, the $4k credit is applied at the point of sale. However, keep in mind that many used car listings will list the price of the vehicle with the $4k credit already deducted. So be sure to keep your eyes out for that while searching for a used EV.
Overall, contrary to what many believe, EVs are far more accessible than they used to be. With a used Tesla Model 3 coming in at around $15k, it’s hard to justify purchasing any other type of vehicle.
