Few takers for used EVs, with new ones now a tougher sell

Lack of subsidies, waiting for better tech, charging woes among reasons hitting sales

BERLIN - The shift away from cars with dirty combustion engines is running into a new hurdle: Drivers do not want to buy used electric vehicles (EVS), and that is undermining the market for new ones too.

In the US$1.2 trillion (S$1.6 trillion) second-hand market, prices for battery-powered cars are falling faster than for their combustion-engine cousins.

Buyers are shunning them due to a lack of subsidies, a desire to wait for better technology, and continued shortfalls in charging infrastructures.

A fierce price war sparked by Tesla and competitive Chinese models are further depressing values of new and used cars alike, threatening earnings at rivals like Volkswagen (VW) and Stellantis.

As most new vehicles in Europe are sold via leases, automakers and dealers which finance these transactions are trying to recover losses from plummeting valuations by raising borrowing costs. That is hitting demand in some European markets that were in the vanguard of the shift away from fossil fuelpowered propulsion.

Some of the biggest buyers of new cars, including rental firms, are cutting back on EV adoption because they are losing money on resales, with Sixt dropping Tesla models from its fleet.

"When a car loses 1 per cent of its worth, I make 1 per cent less profit," said Mr Christian Dahlheim, who heads VW's financial services arm.

The issues with second-hand EVS, he added, have the potential to destroy billions of euros in earnings for the broader industry.