The resale market for used electric vehicles (EVs) is facing significant challenges, as dealers report that these cars are notably more difficult to sell compared to traditional petrol vehicles, with depreciation rates being considerably steeper.
In Singapore, this trend has become increasingly evident, even as the popularity of EVs in the new car segment continues to surge, accounting for a remarkable 53 percent of all new vehicle registrations in October.
"SELLING EVS IS A STRUGGLE"
At Euro Performance Asia, located in Ang Mo Kio, electric cars make up less than 10 percent of the 90 second-hand vehicles available. The dealership has chosen to be very selective about accepting used EVs, citing weak demand in the resale market. While petrol cars typically find buyers within three weeks, an electric vehicle might linger on the lot for as long as six months, and one particular model has remained unsold for over a year despite multiple attempts to attract buyers.
Anson Lee, the managing director of the company, explained, "I generally avoid taking in used EVs because they are extremely challenging to sell. There’s a lack of demand, and many dealers share this sentiment." He pointed out that BYD, a Chinese manufacturer, stands out as the only EV brand performing relatively well in the resale market, largely due to its more affordable pricing.
Another pressing issue is the significant depreciation faced by used EVs. These vehicles can lose up to 40 percent of their value, whereas conventional internal combustion engine (ICE) vehicles typically depreciate by only about 10 percent. Mr. Lee noted that many consumers treat EVs similarly to electronic gadgets, eager to upgrade to the latest models as advancements in range, performance, and features become available.
"There’s a strong tendency for individuals to want the newest model. When they do decide to upgrade, older models flood the market," he added.
AN UNDERDEVELOPED RESALE MARKET
The second-hand vehicle marketplace Sgcarmart echoes these observations, revealing that it takes approximately one-third longer to sell an EV compared to traditional vehicles. Out of around 15,000 total car listings on the platform, only about 900 are electric cars, accounting for roughly 6 percent of all listings.
Desmond Chan, the editorial manager at Sgcarmart, highlighted that many potential buyers remain uncertain about the maintenance and long-term reliability of EVs. Concerns exist regarding whether there are sufficient repair workshops capable of handling EV issues when they arise.
"There are still uncertainties surrounding maintenance, particularly whether enough workshops are equipped to service electric vehicles if problems occur," he remarked. Chan further emphasized that the resale market is still developing, with most used EVs being relatively young—typically two to three years old—reflecting the period when a large influx of new electric cars entered the Singapore market.
"Understandably, there are numerous questions regarding residual values for these cars and how well they will perform over time. Currently, no one can provide clear answers," he explained. However, he remains optimistic: "If we look ahead four to five years, as these vehicles age, we will have more data points and factors that buyers can consider."
Chan believes that as the overall automotive landscape evolves, the demand for used EVs will increase. Singapore has plans to cease the registration of new petrol cars by 2030 and aims for a 100 percent cleaner-energy vehicle fleet by 2040.
LOOKING TOWARD THE FUTURE
Analyst Walter Theseira emphasized the importance of the resale market for budget-conscious buyers, especially in light of high Certificate of Entitlement (COE) premiums. Additionally, as supply chain costs decline, new EVs are becoming more affordable, particularly those manufactured in China.
"When contemplating a new EV versus a used one, you may discover that the new model is better priced and offers more capabilities than the second-hand EV from three or four years ago," noted Theseira, who is an associate professor at the Singapore University of Social Sciences’ School of Business.
He predicted that resale prices for EVs could rise shortly, especially as government incentives for EV adoption begin to decrease starting January 1, which may lead to increased demand for second-hand vehicles.
Looking forward, he observed that the rapid pace of technological advancements in EVs is slowing down, which could stabilize resale values. "Any EV purchased today will undoubtedly outperform an EV from a decade ago, but it’s not so certain that it would surpass one from five years ago," he stated. "Thus, the rate of change has dramatically slowed. This is encouraging news for current EV buyers who are concerned about future resale values."
As the conversation around the viability and future of electric vehicles continues, where do you stand? Do you think the resale market for EVs will improve, or are there underlying issues that need to be addressed? Share your thoughts in the comments!
