Article Type: Long Read

What was the most popular EV worldwide in 2023?

Autovista24

The global electric vehicle (EV) market broke records throughout 2023. Leading this charge was the Tesla Model Y. José Pontes, data director at EV-volumes.com, unpacks the year and its most popular performers.

New EVs, consisting of battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs), saw global registrations jump 35% year on year in 2023. This allowed the electric market to end above the 13 million mark for the first time.

Plug-in models made up a record 22% of the entire new-car market in December, with BEVs accounting for 15% alone. This pushed 2023’s total EV share to 16%, a small rise from 14% in 2022. BEVs made up 11% of registrations worldwide last year, up from 10% in the previous year. It is worth considering that the overall global new-car market experienced double-digit growth in 2023.

PHEVs (up 47%) saw registrations grow more quickly across 2023 than BEVs (up 30%). This meant the hybrid powertrain increased its share of the EV market, reaching 31%, up from 28% in 2022. The PHEV share has been fluctuating between 26% and 31% since 2018, supporting the notion that the technology could remain relevant for a while.

Best-selling car in 2023

The Tesla Model Y recorded 1,211,601 registrations across 2023. This made it the best-selling model in both the new EV and the overall new-car market. The BEV saw deliveries grow 57% year on year, up from 771,000 units in 2022. The crossover can be expected to stay a market leader in 2024.

EV

The BYD Song secured second place, as the Chinese SUV ended the year with 636,533 registrations, up 33% on 2022. Meanwhile, the Tesla Model 3 hit a new record of 529,287 registrations, putting it in third.

But despite its recent refresh, the Model 3 has reached full maturity. The sedan has seen its market share erode from 14% in 2019 to 12% in 2020, then 8% in 2021, 4.7% in 2022 and 3.9% last year. Sales have struggled to maintain momentum since hitting over 500,000 units in 2021.

Compared with 2019, last year’s result represents growth of 6% for the Model 3. But in the same period, the EV market more than doubled from 6.6 million units to nearly 13.7 million units, illustrating the BEV’s market limits.

BYD’s block

Below the top three, there was a block of BYD models. This included the Qin Plus in fourth, the Yuan Plus/Atto 3 in fifth, and the Dolphin in sixth. The BYD Seagull ended the year in seventh, profiting from a great performance in December and jumping two places. This meant the top seven places were dominated by just two carmakers.

The BYD Han won another full-size category title, followed by its sibling, the Tang. But both models saw declining sales in 2023, by 17% for the Han and 7% for the Tang. It will likely be much harder for the Chinese brand to retain the full-size category title in 2024.

In the second half of the table, the Volkswagen (VW) ID.3 was up one position to 15th. Last year was a great one for the hatchback, as its sales jumped 79% year on year to 139,268 units. Thanks primarily to its success in China, this is the first time the BEV crossed the 100,000 mark.

GAC Aion also had a good year with its Y and S BEVs, with sales almost doubling. This put the models in ninth and 11th respectively. But Li Auto made even greater strides, as the startup placed all three of its full-sized EVs in the top 20.

Four models from legacy OEMs made it to the top 20 in 2022, namely the VW ID.4, the Hyundai Ioniq 5, the Ford Mustang Mach-E, and the Kia EV6. But this count fell to just two in 2023, with the VW ID.4 in 12th and ID.3 in 15th. Considering the Audi Q4 e-Tron finished in 21st, the top three models from a legacy OEM all belonged to VW Group.

Success by segment

Chinese models took the EV A-segment by storm in 2023. Coming seventh in the overall EV ranking, the BYD Seagull took the category title from the eighth-place Wuling Mini EV. The Seagull is a top contender to repeat its success in 2024. The Changan Lumin came third in the category, far from the top two.

The B-segment also saw many Chinese models succeed. The category was led by the BYD Dolphin which came sixth overall, followed by the Wuling Bingo in 13th. The Peugeot e-208 came next but at a great distance from the top two with some 51,000 registrations. This was more than 100,000 units below the Bingo and some 300,000 units behind the Dolphin.

The C-segment was led by the BYD Yuan Plus/Atto 3. The crossover ended 2023 at 418,994 units, double its 2022 result. The GAC Aion Y came next with 235,861 deliveries, followed by the VW ID.4 with 192,686 registrations. Expect an exciting competition between the top two this year. However, the BYD Yuan Up, a smaller and cheaper sibling of the Yuan Plus, could provide a surprise.

Tesla’s D-segment

Tesla ruled over the D-segment in 2023. The Model Y was the clear leader, while the Model 3 came third. Between the two was the BYD Song. However, the Model Y already looks set to secure the category win again in 2024.

Three Chinese models commanded the E and F-segments. The BYD Han recorded 228,007 registrations, the BYD Tang 141,581 registrations, and the Li Auto L7 134,089 registrations. Should Li Auto or Aito want to compete for a top spot this year, a minimum production capacity of 150,000 units a year will be the bare minimum. Even so, the category leader will likely end up past the 300,000-unit mark.

Pickup trucks saw a second year of relevance in 2023 with around 52,000 deliveries, up 44% year on year. The Ford F-150 Lightening posted roughly 25,000 deliveries while the Rivian R1T managed some 15,000. Geely’s Radar RD6 took third with 4,736 units. In 2024, the Tesla Cybertruck is likely to disrupt this trio.

A total of 9,511 fuel-cell electric vehicles were registered in 2023, down 38% on 2022. This followed a drop from 2021, the year FCEVs reached a peak of 15,434 registrations. In 2023, the Hyundai Nexo (5,000 units) beat the Toyota Mirai (4,000 units).

Best-selling brands in 2023

In terms of brand volumes, BYD beat Tesla by a significant margin in 2023. With a 56% year-on-year growth rate, the Chinese company was the fastest-growing marque in the top three, allowing it to increase its lead to over one million units.

However, this trend is unlikely to continue into 2024. BYD is running out of room to grow in its domestic market, meaning the demand ceiling is closing in. Yet this supports the company’s overseas strategies, plans which could come to define the EV market in 2024.

In 2023, the Chinese brand started to export its EVs in significant volumes. Israel saw 15,000 units, Brazil 18,000 units, and Thailand 30,000 units.

EV sales

In second place, Tesla’s market share continued to suffer erosion. This sat at 17% in 2019, 16% in 2020, 14% in 2021, and then 13% in 2022 and 2023. This could potentially stabilise around 10% in the future. The US carmaker will need to diversify its line-up if it wants to retake the brand title.

Due to a slow first half of the year, SGMW ended in sixth allowing BMW to take third. It may be difficult for the German carmaker to hold on to this position in 2024, considering the pack of fast-growing Chinese brands behind it.

In fourth, GAC Aion grew 78% to some 484,000 units, however, this growth will be difficult to sustain. So far, the brand has not found a way to replicate the success of its S and Y models.

This puts the carmaker in the sights of the rapidly-growing Li Auto in seventh. Its three current models will reach maturity in 2024. Then there are the upcoming launches of the Mega and the L6, which could mean the brand will deliver up to 700,000 units next year.

Benefitting from a slow December for Toyota, Nio was also able to climb up the ranking in the last month of 2023. The carmaker ended the year in 16th, a five-position jump from its previous year’s standing. However, it could be difficult for the startup to remain in this spot given a lack of new models for 2024 and a sluggish export performance.

The other two brands to benefit from Toyota’s downfall were Ford, climbing one position to 17th, and Jeep, up to 18th. Out of all the legacy marques on the table, Jeep was the fastest growing, having seen its sales jump 53% compared to 2022. It ended the year as Stellantis’ best-selling brand, 23,000 units ahead of Peugeot in 22nd.

Outstanding OEMs in 2023

Gathering EV sales by automotive group, BYD claimed a 22% market share, with 3,012,070 registrations. Tesla came second with an 13.2% share and 1,808,652 deliveries. This puts the two OEMs in a league of their own, controlling over a third of the market together.

electric vehicle

VW Group remained in third, with a 7.3% market share, making it the leading legacy OEM. Meanwhile, Geely–Volvo (6.8% share) took fourth from SAIC (5.8% share) towards the end of the year. This means the fight for third in 2024 will be one to watch.

Stellantis (4.2% share) stayed in sixth but has lost half a percentage point compared to the end of 2022. However, the OEM delivered nearly 600,000 units last year. This means it should reach the one-million-unit scale for EV profitability by 2025, or possibly 2026.

BMW Group (4.1%) rose to seventh place and the German OEM should be competing for sixth throughout 2024. Hyundai Motor Group (3.7% share) dropped from seventh in 2022 to ninth in 2023, losing almost a full percentage point from 4.6%. The Korean OEM was also surpassed by GAC, which ended the year with a 3.8% share.

Battle of the BEVs

Looking only at BEVs, Tesla took the 2023 OEM title with 19.1% of the global market. This was up from 18.2% in 2022 but was down from the 23% it commanded at the end of 2020. Second went to BYD with a 16.5% share of the BEV market.

BEV

While Tesla’s market is likely to erode slightly in 2024, BYD will keep gaining share. This will be thanks to a larger number of BEVs in BYD’s line-up, including the Yuan Up and Sea Lion. Additionally, exports will be more focused on BEVs, with PHEVs only being used in select markets.

VW Group took third with an 8% share, while SAIC took fourth with a 7.9% holding. In fifth, Geely–Volvo claimed 6.2% of the market. Sixth-place GAC was a sizable distance behind, with a 5.3% share. Nevertheless, the OEM had a positive 2023, up from 4% in 2022.

BYD nears local limit

There are a number of trends already emerging which provide a good insight into what the automotive market can expect from the EV segment in 2024 and beyond.

The BYD brand is already close to its demand ceiling in China, meaning the OEM is increasingly focused on its premium brands. This includes Yangwang, Fangchengbao and Denza.

With a higher average price, margins are expected to improve. This will give BYD more options when pricing its mainstream models. But with competition heating up in the Chinese EV market, BYD will need to keep its line-up fresh to hold on to its share, while also considering pricing.

As such, growth will have to come from overseas markets which is something BYD has been preparing for. As well as buying and chartering its own vehicle vessel, it is building factories in places such as Thailand, Indonesia, Brazil, and Hungary.

Tesla’s production planning

Tesla delivered 1,808,652 units in 2023, but with little in the way of new offerings, the carmaker is unlikely to see rapid growth in 2024.

Tesla’s current issue is its lack of product planning. The Model S is now 12 years old, making a second generation rather overdue. The Model X is in its ninth year, meaning a new version should have been presented by now.

Meanwhile, the Model Y (2020) has reached maturity as has the Model 3, which launched in 2017 and only saw a refresh in 2023. Their successors should, therefore, be on the drawing board. However, this does not appear to be the case. The carmaker would do well to consider how it manages the lifecycles of its products.

VW Group and Geely

While suffering some management changes in recent years, VW Group is still the best-performing legacy OEM by far. With close to one million EV deliveries in 2023, its long-term survival is well assured.

Moving into 2024, the OEM’s leading models will mature. The only new models will be the VW ID.7, the Cupra Tavascan, the Skoda Elroq, the Porsche Macan, and the Audi Q6/A6 e-Tron.

Meanwhile, Geely has been steadily gaining ground in the EV OEM ranking in the last few years, ending 2023 in fourth with 925,111 registrations. This was only some 69,000 units below VW Group.

SAIC the export expert

While SAIC excels at exporting, it could do better locally. The OEM aims to sell around 1.4 million vehicles abroad this year. However, this does include models powered by internal-combustion engines.

With 14 new EVs expected by 2026, SAIC hopes to replicate the MG4’s success with other launches. This includes venturing into the premium end of export markets with its new IM brand. Therefore, 2024 is likely to see a new MG5 station wagon, a ZS crossover, and a flagship SUV model.

Another monthly title for Tesla

The Tesla Model Y took another best-seller position in December, with 128,410 deliveries. The crossover can be expected to keep racking up monthly titles this year as it has reached full maturity. With a refreshed version coming around April, it is likely to be the best year of the current generation.

BEV sales

In second place, the BYD Song hit a record 76,086 registrations. This could be its peak, with the recently-arrived Song L ready to cannibalise a significant volume of its sales in 2024, as will the upcoming Sea Lion.

Third place in December went to the Tesla Model 3, which posted more than 56,896 deliveries, ending well ahead of the BYD Qin Plus in fourth (44,701 units). Further down the ranking the Wuling Bingo came eighth (27,458 units), thanks to its continuous production ramp-up. The small EV seems ready to compete with BYD’s leading models for a top spot in 2024. 

The VW ID.3 finished the month in 15th. The model recorded 17,861 registrations globally in December, its best score since the end of 2020 when VW delivered units to dealerships to comply with emission requirements.

Thanks to price cuts in China, the ID.3 saw its fortunes change completely in the market. This helped compensate for its milder performance in Europe. Elsewhere in the compact category, SAIC’s MG4 (Mulan in China) scored 12,964 registrations in December, its second record score in a row.

Made in China

Some of December’s most significant figures were recorded in the full-size category. The entire Li Auto line-up reached record heights. The L7 marked 20,428 registrations, the L8 saw 15,013 deliveries, while the L9 marked 14,913 units.

December’s best-selling full-size model was the Aito M7, which took ninth place in the EV market with 25,545 deliveries. With Huawei putting its weight behind the brand, sales increasing rapidly.

Every model in December’s top 20 was made in China. A total of 16 belonged to Chinese carmakers, with seven coming from BYD alone. This illustrates the importance of the Chinese market in the broader EV industry.

Successful SUVs

Outside of December’s top 20, the Geely Panda Mini was close to joining the table, having ended the month fewer than 300 units behind the BYD Tang in 20th. The compact Audi Q4 e-Tron was also close, with 11,260 registrations.

In the midsize category, SUVs were trending with several record-breakers. After several years on the market, the Volvo XC60 PHEV hit a best-ever global total of 7,868 registrations. Deliveries of the Lynk & Co 08 PHEV reached 10,055 units, while SAIC’s IM LS6 posted 9,878 units, and the Changan’s Deepal S7 11,360 units.

However, the recent Wuling Starlight from SGMW proved that success is not restricted to SUVs, recording 8,050 deliveries in December. In the full-size category, the Jeep Grand Cherokee PHEV reached a record 7,299 registrations.

The BMW i4 achieved another registration record, with 11,203 units delivered in December. This made it the best-selling EV produced outside of China. However, the i4 only posted a fifth of the registrations achieved by its competitor, the Tesla Model 3.

The BMW iX1 also achieved a new best of 8,775 deliveries, its third record in a row. Meanwhile, the iX also shined, with 7,027 registrations.

A record month for brands

BYD managed another record month in December, this time with 320,928 registrations. It once again beat Tesla, which posted 195,265 deliveries.

global EV sales

SGMW came third thanks to a best-ever monthly tally of 69,912 registrations. Its three models (the Mini EV, Bingo, and Starlight) contributed decisively to this performance. In fourth with 59,480 deliveries, BMW had a record month thanks largely to the success of its i4 fastback (11,203 registrations), but also the iX1 (8,775 units) and iX (7,027 units).

VW came fifth with 52,042 registrations, followed closely by Li Auto with a new best of 50,356 units. In the same month last year, it posted 21,233 registrations. In eighth, Changan recorded 43,095 deliveries, its second-best performance in a row, thanks to the Lumin and Deepal S7.

MG4 boosts SAIC

SAIC made it to 11th with a record 35,334 registrations. This was owing to the performance of its star player, the MG4. Aito rocketed up to 12th with its M7 SUV and even larger M9. The brand hit a record 30,108 units in December.

In 13th, Audi also registered its best month with 28,024 deliveries in December, thanks to the Q4 e-Tron. XPeng came 17th, with 7,673 registrations of its G6 midsize SUV in December. This allowed the carmaker to hit a total of 20,105 units in the month, almost catching Hyundai in 16th (20,631 units). Chery came 20th thanks to the positive results of the QQ Ice Cream (7,462 units).

Jeep landed in 21st, making it the best-selling US legacy brand as well as Stellantis’ best-selling marque. With 17,723 registrations, it achieved a new record. This was down to the continued success of the Wrangler PHEV and Grand Cherokee PHEV.

Lynk & Co came 22nd with a new best of 17,505 deliveries. The 08 SUV accounted for the bulk of the registrations (10,055 units), allowing the Chinese brand to end close to the table.

This content is brought to you by Autovista24.

Monthly Market Update: European used-car markets pick up speed in June

Many European markets saw drivers purchase a used car more quickly in June. While absolute residual values (RVs) remained stable, RVs presented as a percentage of retained list price (%RV) saw greater fluctuation.

The average number of days needed to sell a used car shrank across many European markets last month, bucking a recent trend. Compared with May’s figures, Austria, Germany, Italy, Spain and the UK all saw speedier transactions take place for 36-month-old vehicles at 60,000km.

The UK witnessed the fastest turnaround at 38.5 days, falling by 0.1 days month on month. Austria recorded one of the longer periods at 74.1 days, although this was still a drop of 2.4 days on average compared with May. The exceptions were Switzerland and France, with used cars waiting for an additional 3.7 and 3.4 days on average to find a new owner.

Absolute residual values were stable across Europe in June, with the majority of markets enjoying positive momentum. Italy saw the strongest rate of month-on-month RV growth at 3.9%, meaning 36-month-old cars traded for an average of €20,815. At the other end of the spectrum, the UK saw absolute trade RVs dip by 3.3% to £17,792 (€20,775).

Most of the markets under review saw %RVs decline month on month, if only by a marginal amount. The UK took the largest drop at 3%, down to 64%, while France and Italy saw %RV increases. Recording month-on-month growth of 0.5% and 0.3% respectively, both markets hit a %RV of 55.9%.

Comparing the sales-volume and active-market volume indices reveals that used-vehicle supply is still overshadowed by demand. However, this trend was far less pronounced than in May, with only four of the seven markets under review affected.

For example, while France’s active-market volume index saw one of the greatest month-on-month drops at 4.7%, this was still outweighed by its 12.6% fall in demand. But demand did outstrip supply in Italy, Spain and Austria, where the sales-volume index saw respective inclines of 23%, 18% and 6.9%.
Click here to open the interactive dashboard

The interactive monthly market dashboard examines Austria, France, Germany, Italy, Spain, Switzerland, and the UK. It includes a breakdown of key performance indicators by fuel type, including RVs, new-car list prices, selling days, sales volume and active-market volume indices.

Scenario analysis

The current base-case scenario of low supply and falling demand has both positive and negative ramifications. Used-car prices and demand would come under pressure should Europe’s economic situation deteriorate.

If new-car supply suddenly improved as supply-chain issues ease, this outcome would worsen. While the semiconductor shortage appears to have improved, McKinsey analysis points towards a shortage of specific chips persisting until at least the summer of 2025, if not longer.

On the other hand, if new-car supply was disrupted again, the used-car market would likely benefit in the short term as consumers explored alternatives to factory-fresh models. This could occur if supply chains took a hit due to economic turbulence or exceptional energy prices. Conflict would have the same impact, as has been seen with the war in Ukraine.

However, in the longer term, a lack of new car supply would result in a shrivelled supply of young used cars, pushing consumers towards older models. This would create an issue, as environmental regulations look to discourage the uptake of more polluting models.

Austria’s mounting RV pressure

Compared with 2022, living costs continued to climb in Austria as used-car transactions sank. The sales volume index did reveal stronger demand in June compared with May, increasing 6.9% month on month. However, the sales volume index was down 1.9% year on year.

Meanwhile, the supply volume of passenger cars aged two-to-four years was around 11% higher in June than a year earlier. But in 2022, supply was significantly lower than before the COVID-19 pandemic at the beginning of 2020.

Following a steady increase earlier in the year, the average number of days it took to sell a used car decreased to 74.1 days in June, confirming a slowdown in demand. Petrol cars sold the fastest, averaging around 72 days, followed by hybrid-electric vehicles (HEVs), diesel cars and plug-in hybrids (PHEVs) with around 74 days. Battery-electric vehicles (BEVs) took longer to move at around 89 days.

With weakening demand and improving supply, %RVs of 36-month-old cars decreased slightly by 0.2% compared to May, reaching 54.3% on average. This marked a 2.8% year-on-year gain but shows that pressure on RVs is increasing.

HEVs are currently leading with a %RV trade value of 57.6% followed by petrol cars (55.3%), diesel cars (54.4%) and PHEVs (53%). Meanwhile, 36-month-old BEVs retained the lowest value, at 48.4%. As demand is expected to weaken while supply recovers, further pressure on RVs can be expected. Therefore, RVs of 36-month-old used cars will remain relatively high but on a decreasing trend.

‘The market’s average %RV of a 36-month-old car at 60,000km is forecast to end 2023 approximately 2.4% down compared to December 2022. For 2024, %RVs are expected to decrease by around 3.4% year on year due to weakening demand and increasing supply,’ said Robert Madas, Eurotax (part of Autovista Group) regional head of valuations, Austria, Switzerland, and Poland.

Postponed purchasing in France

The French used-car market was stable in June. A slight increase in absolute RVs was observed, likely due to marginally higher list prices. But the sales volume decreased, with the time needed to sell a used car rising. The fastest-selling models were the smallest and cheapest vehicles, such as the Dacia Sandero with less than 30 days. This was followed by A and B-segment cars.

‘Recent high prices on the used-car market have resulted in postponed purchase decisions, a trend which has become more visible each month. This will likely lead to decreasing residual values in the coming months,’ said Ludovic Percier, Autovista Group residual value and market analyst for France.

Petrol-powered models are following the global trend, with a slight increase in absolute RVs. Yet these vehicles did see %RVs stabilise month on month. The RVs of diesel and hybrid powertrains also remained stable in June, but there was a decrease in sales volumes.

Only diesel kept a consistent number of average days to sell, while hybrids took longer. Even with their tarnished reputation and the implementation of low-emission zones, diesel RVs have not fallen very far. High-mileage drivers are not affected by these zones, and they only take effect in cities with 150,000 inhabitants or more. However, from late 2024 and into 2025, the diesel market will be more heavily impacted.

PHEVs saw absolute RVs begin to fall month on month, with a higher volume of sales and cheaper cars on average sold. Compared with May, BEVs saw stable RVs, while sales volumes and average days to sell increased. Fewer private buyers purchased a used vehicle in June. Those who did were budget conscious and looked to older vehicles or a lower segment. Cars over 12 years of age suffered the least.

Government offering needed in Germany

May saw a large increase in new-car registrations, with fleets performing particularly well. The significant increase compared to 2022 was fed by all drive types apart from PHEVs.

In recent years, these vehicles have benefited from a combination of new-car bonuses, tax advantages for the driver and minimal adjustment in day-to-day use, without the obligation of using the electric drive to cut emissions. But this has now changed, and demand has dropped accordingly.

If Germany’s registration recovery continues, petrol could suffer on the used-car market in 2026. This is because, when measured against pre-crisis levels, there were significantly more new petrol cars taking to the roads in May.

Diesel cars remain unaffected and continue to generate less supply, consequently stabilising prices during remarketing. The increasing number of stock days – regardless of fuel type and age – suggests that willingness to buy is dwindling and customers are becoming more reluctant to opt for younger used cars.

However, the resulting price pressure is only likely to have a temporary effect. In the short term, the continued lower market volume will not offer the opportunity to compensate for falling prices, resulting in margins with higher unit numbers.

‘In the coming year, prices are expected to rise again, especially for the currently weak electric vehicles (EVs). A government offering is urgently needed to stimulate demand for used vehicles with plugs,’ said Andreas Geilenbruegge, head of valuations and insights at Schwacke (part of Autovista Group).

‘Previous measures, which were almost exclusively aimed at new purchases, now need to be replaced by effective support for EV operation and maybe even PHEVs. As long as energy costs, for example, do not become more attractive, it is possible that demand will lag behind rapidly growing supply,’ he added.

Slow turnaround in Italy

In June, the Italian used-car market recovered slightly from the decline observed in May. But with %RVs only increasing by 0.3% month on month, this should be considered as a sign of stability, rather than an indicator of recovery.

‘Year-on-year growth can be expected to slow in the second half of 2023,’ said Marco Pasquetti, head of valuations, Autovista Group Italy. ‘While many crises observed over the past couple of years are fading, such as long new-car delivery times, this turnaround is taking longer than originally hoped. Accordingly, the RV outlook for 2023 has been adjusted marginally to a year-on-year increase of 5.9%.’

Average days to sell sped up in June to 48.3. This is 10.5 days less than a year ago and 14.4 fewer than in May. BEVs, PHEVs and HEVs recorded a particularly good performance, taking less than 40 days on average to sell.

The RVs of BEVs were among the few to fall in June, dropping by 0.8% month on month, with an absolute trade value of just over €16,000. With the same absolute RVs, it might appear buyers are prepared to pay the same amount for a BEV as a petrol model. However, this is where %RVs need to be accounted for.

Petrol cars retained 53.6% of their list price in June, whereas BEVs only managed 37.5%. So, three years ago a new petrol model might have cost €30,000, but a new BEV would have cost roughly €13,000 more. This suggests that many Italians still fail to recognise the benefits of owning an all-electric vehicle.

Price pressure in Spain

For the fifth consecutive month, new-car sales in Spain were up, growing 8% year on year in May. Accumulating 404,337 registrations in the first five months of 2023, the country saw a 27% increase on the same period in 2022. But uncertainty remains as the private channel is still very subdued.

As in previous months, the rental channel has shown significant growth, with one out of four sales in May going to this market. This impacts the dynamics and profile of the used-car market in terms of age, make and model. The used-car market grew by 4% and did so through younger cars.

The situation also influenced the scenario of best-selling brands and models. This means the promotion of vehicles with a rental profile and brand models such as MG, which are widely available and have a strong presence among rental companies.

‘The greater availability of young used cars puts more pressure on prices, visible in the absolute RVs of cars up to 12 months old. Despite high availability, the older the model, the better its residual value held up. Vehicles over 15 years old still accounted for 40% of transactions,’ commented Ana Azofra, Autovista Group head of valuations and insights, Spain.

In terms of powertrains, the negative evolution of BEVs has intensified, with all-electric cars depreciating faster than any other technology, including PHEVs. The market has not reached maturity in terms of infrastructure and the price war initiated by Tesla is likely to have put downward price pressure on other manufacturers, especially those in the mainstream market.

This slowdown in demand for BEVs was also reflected in stock turnover. A used BEV currently takes 81 days on average to sell. This is 20 days longer than a petrol car and almost twice as long as a HEV at 44 days. Hybrids continue to enjoy positive momentum, with three Toyota models at the top of their respective rankings, taking the least time to sell.

Opposed supply and demand in Switzerland

Switzerland has seen increasing levels of supply in recent months, except for young-used cars when compared with pre-COVID-19 years. Additionally, transactions have slowed since the beginning of this year, with little sign of recovery from a weak 2022.

However, the active market volume index did see a 2.4% month-on-month increase, and a 40.1% incline on June 2022 across all two-to-four-year-old passenger cars. The sales-volume index dropped by 1.7% compared to May but is still up 11.2% year on year.

With increased supply and declining demand, the average %RV of a 36-month-old car hit 50.5% in June, falling 0.7% month on month, but still up 1.5% year on year. PHEVs aged 36-months retained 48% of their original list price. Slightly above this were BEVs (48.2%), diesels (49%), and petrol cars (51.4%). HEVs posted a particularly strong year-on-year %RV gain of 11.4%, reaching 54.6%.

Passenger cars aged two-to-four years were in stock for 81 days, up 3.7 days from May. HEVs sold the quickest after an average of 43 days, followed by petrol cars after 79 days, then diesel cars and BEVs after 84 days, and finally, PHEVs after 98 days.

‘As used-car demand is expected to weaken amid overall high and stable supply, a further and slightly accelerated decreasing trend can be expected, although values of three-year-old used cars remain relatively high,’ said Hans-Peter Annen, head of valuations and insights, Eurotax Switzerland (part of Autovista Group). ‘The %RV is forecast to finish 2023 down roughly 4% on December 2022. In 2024, RVs are expected to fall by around 3.9% year on year due to constant supply and lower demand.’

Seasonal change for UK

The average volume-weighted RV of a three-year-old car in the UK sat at £17,792 in June. This represents 64% of the original cost-new price, which is down from 65.9% in May.

The intensity of used-car activity has slowed in recent weeks too. However, this is a fairly typical market trend in the summer months, with consumer focus seeming to switch to other priorities over the holiday period.

‘The sales-volume index certainly points towards slowing activity,’ said Jayson Whittington, Glass’s (part of Autovista Group) chief editor, cars and leisure vehicles. With May’s transactions represented as 100%, the index indicated 91.2% observed retail sales in June.

‘It is therefore unsurprising to see the volume of cars being offered by dealers increasing, with 4.5% more units advertised compared to the previous month. It is encouraging to see, however, that 4.3% more retail sales were generated compared to the same period last year,’ Whittington added.

The average movement of a three-year-old BEV followed the general market trend last month, settling at a new price point and falling from 47% of the cost-new price in May to 45% in June.

The average absolute RV now sits at £19,962, which is still £2,170 greater than the average value of combined fuel types. This is despite BEV %RV sitting at 45% in June, compared with all combined fuel types which retained 64% of the original list price.

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Monthly Market Update: Demand overshadowed by supply in May

Absolute residual values (RVs) in many European markets maintained a trend of double-digit year-on-year growth last month. Values represented as a percentage of retained list price (%RV) also rose when compared with May 2022, although this was primarily at a slower, single-digit rate.

Meanwhile, month on month, RVs were broadly stable. Italy saw the highest absolute growth at 0.8% and France felt a %RV improvement of 0.8%. Absolute RVs in Switzerland’s used-car market took the greatest fall at 1.3%. However, RV fluctuations do not tell the full story of how European used-car markets performed in May.

As indicated by the sales volume index, demand saw double-digit year-on-year drops in France (down 38.4%), Spain (down 23.6%), Italy (down 22%) and Austria (down 19.7%). While Germany, Switzerland and the UK saw demand rise, up 15.6%, 4.3% and 1.6% respectively, this was still below their respective levels of supply.

Switzerland (up 36.4%), Austria (up 19.7%), Germany (up 16.1%) and Spain (up 8.3%) saw greater supply than in May 2022. While France and Italy noted negative year-on-year results from the active market volume index, down 28.9% and 11.6% respectively, supply to their used-car markets still outstripped demand. The UK was the only country to see this trend inverted, with supply falling 12.4% year on year.

Compared to May 2022, the average number of days needed to sell a used car last month increased in Austria, France, Germany, Spain and Switzerland. This further confirms the observed trend of falling used-car demand.

Carmakers are continuing to surmount supply-chain challenges initiated at the beginning of the COVID-19 pandemic. This means the volume of young used cars entering the market will likely keep growing. However, if demand does not keep pace, RVs will face increasing pressure as more models hit the market.

Click here to open the interactive dashboard

The interactive monthly market dashboard examines Austria, France, Germany, Italy, Spain, Switzerland, and the UK. It includes a breakdown of key performance indicators by fuel type, including RVs, new-car list prices, selling days, sales volume and active market volume indices.

Scenario analysis

Defined by undersupply and falling demand, the current base-case scenario contains the potential for positive and negative outcomes. Should Europe’s economic situation worsen, used-car prices would experience greater pressure, with demand taking a bigger hit. Should the supply situation suddenly experience significant improvement, this would only compound the situation.

The semiconductor crisis is still sending sizeable ripples across the automotive industry. However, if this situation were to become inverted by lower demand for consumer electronics, carmakers could see a deluge of essential electronic components. This would mean a greater supply of vehicles, but without a corresponding upswing in demand, RVs would suffer.

On the other hand, if new-car supply was disrupted, the used market would benefit as more consumers explore available alternatives to factory-fresh models. Should automotive suppliers hit economic turbulence, this could also happen.

Conflicts around the world threaten stability too, with the war in Ukraine a key example. Europe’s already weakened supply chains would see additional disruption should the war escalate even further.

RV pressure increases in Austria

In May, Austria saw the continuation of a trend of rising living costs and slowing used-car transactions compared to 2022. The sales volume index confirmed demand shrank, declining 9.4% compared to the previous month and a drop of 19.7% compared to May 2022. Conversely, the supply of passenger cars aged two-to-four years was around 19% higher in May 2023 than a year earlier. But last year, supply was significantly lower than before the COVID-19 pandemic.

Average days to sell increased again to 75.7 days, confirming a slowdown in used-car demand. Hybrid-electric vehicles (HEVs) sold the fastest, averaging around 49 days, followed by diesel cars and plug-in hybrids (PHEVs) with 75 days. Battery-electric vehicles (BEVs) sold slightly slower at around 76 days, only just ahead of petrol cars with 78 days.

‘Despite weakening demand and improving supply, RVs of 36-month-old cars have remained stable compared to April,’ said Robert Madas, Eurotax (part of Autovista Group) regional head of valuations, Austria, Switzerland, and Poland. ‘The retained percentage of original list price was 54.4% on average. This marked a 4.5% year-on-year gain but shows that pressure on RVs is increasing.’

With a %RV trade value of 57.4%, HEVs are currently leading the way, followed by petrol cars (55.3%), diesel cars (54.3%) and PHEVs (53.5%). Meanwhile, 36-month-old BEVs retained the lowest value, at 49.5%. As demand is expected to weaken while supply recovers, further pressure on RVs can be expected. The RVs of three-year-old used cars will remain relatively high but with a decreasing trend.

‘The %RV is forecast to end 2023 down approximately 2.4% on December 2022,’ said Madas. ‘In 2024, %RV is expected to decrease further by around 3.5% year on year, due to weakening demand and increasing supply.’

Electric RVs to drop in France

Stability continued for France’s used-car market last month, with higher absolute RVs and marginally larger values in %RV terms. Climbing prices in the past did not influence RVs owing to the steep nature of increases. The average time to sell was slightly longer, as price continued to influence buyers. Those who did pursue a purchase were budget conscious and looked to older vehicles or a lower segment. Cars over 12 years of age suffered the least.

‘A homogeneously priced range of EVs entered the used-car market in May, which explains the lower absolute RVs and list prices compared with April,’ said Ludovic Percier, Autovista Group residual value and market analyst for France. ‘Regarding Tesla, absolute RVs will likely drop in the coming months, especially for the Model 3 and Model Y. Other manufacturers have already dropped their list prices to stay competitive, which will result in an overall decrease in their absolute RVs as well.’

Petrol and diesel RVs remained stable month on month in both absolute and percentage terms. Diesel models did see a marginal RV increase, with figures stable globally, but sales volumes experienced a drop. As new-car buyers have been switching from diesel to petrol (or other powertrains), the fuel type’s availability has been lower on the used-car market due to this drop in registrations. However, lower used-car demand for the powertrain has compensated for this.

Diesel RVs have seen little movement, even with the fuel type’s tarnished reputation and the implementation of low-emission zones (ZFEs). These zones only impact cities with 150,000 inhabitants or more and high-mileage drivers are unaffected. Diesel vehicles will be more heavily impacted from late 2024 and into 2025.

Once again, HEVs saw RV stability, with %RVs growing marginally and absolute RVs dropping because of lower list prices. PHEVs saw steady volume, but more premium and SUV models were present. These vehicles are capable of longer ranges in full-electric mode which explains the higher RVs in absolute and percentage terms. A major decrease is still expected in the coming months.

High-price points in Germany

New-car figures in the first four months of 2023 show that production appears to be recovering slowly. With just under 8% growth compared to the previous year, there is a glimmer of hope. However, this should not obscure the fact that with some 870,000 units, the first four months of 2023 are still far below the seven-digit figures recorded before the COVID-19 pandemic.

In particular, the number of PHEV registrations, which collapsed due to the discontinuation of government incentives at the turn of the year, are weighing on the overall balance. Meanwhile, internal-combustion engine (ICE) vehicles continue to see production and market demand. BEVs are also increasingly joining the roads and continue to benefit from the country’s eco-bonus.

There are, however, a few registration losers. First, the Tesla Model 3 has seen its numbers halved, while its stablemate, the Model Y, was registered three times as often. On the upside, some newcomer brands such as BYD, Lucid, Maxus, Nio, Ora and Wey, are now appearing and will enrich the used-car market.

‘A few older-generation models that used to see strong registrations have finally been phased out, such as the BMW i3 and Smart forfour, so that they will only be encountered on the used-car market,’ said Andreas Geilenbruegge, head of valuations and insights at Schwacke (part of Autovista Group).

‘RVs of expensive used cars are declining, which could be due to their low age, premium brands, or expensive segments. However, their more premium prices are straining already reduced purchasing power,’ he added.

Meanwhile, used cars with lower prices and combustion engines continue to see demand and are capable of maintaining their price position. The declining inflation forecast after 2023, rising new-car prices and ongoing low volumes mean the used-car market is likely to see higher prices remain in the coming years, and maybe even rise further.

Signs of trend reversal in Italy

While months of steady growth brought double-digit year-on-year %RV increases (up 11.4%) in May, a small, but expected, change is worth highlighting. Compared to April, May saw %RVs drop by 0.2%. This is too slight a change to indicate a rapid return to pre-crisis levels, but it is likely the first sign of a reversing trend that will be monitored closely in the coming months. Nevertheless, the decline is proving slower than expected, which has informed a revision in the 2023 RV outlook to an increase of 4.7%.

This trend is observable across almost all fuel types, with the exception of HEVs and PHEVs, both of which grew by 0.5% compared to April 2023. PHEVs saw their list prices increase 44% year-on-year, which is significant compared to an average growth of 9.5%.

‘However, this is not due to any particularly aggressive pricing strategies, but rather that the technology features in larger and more expensive segments, where its advantages are easier to appreciate,’ explained Marco Pasquetti, head of valuations, Autovista Group Italy. ‘Even if transactions are few, it is not surprising that the Porsche Cayenne or BMW X3 are among the fastest-selling models.’

Compared to April, the average sale time increased by 10.7 days, so that the cars sold in May remained in stock for around two months. Finally, the second-hand market for CNG-powered cars is becoming increasingly difficult, with models taking 140 days on average to be sold.

Rentals reign in Spain

The end of April saw new-vehicle sales stay on a positive trajectory established in the first few months of 2023, with an accumulated growth of 34%. According to ANFAC data, sales of EVs continued to rise, up 45% compared to 2022.

This means they are already equal in weight to petrol vehicle sales, although this is still far from the government target. By channels, fleets brought stability, while rental channel renewals brought dynamism to the second-hand market.

‘Rental sales have sustained the second-hand market in recent months, which continues to rapidly absorb these in-demand young vehicles,’ said Ana Azofra, Autovista Group head of valuations and insights, Spain. ‘Despite this, the market is down 2%, due to a shortage of stock in the other channels.’

Meanwhile, previously reported transaction price trends continued, with some stability amidst small negative adjustments for petrol and diesel vehicles. There were improvements in the average transaction price of HEVs and slightly positive adjustments for BEVs. This was more related to the change in mix, with additional weight from premium models and better performance.

In recent weeks a negative trend in PHEV offer prices has been observed. But PHEVs are not alone, with BEVs also coming under pressure. This will eventually be reflected in a fall in transaction prices.

‘This early trend is already being observed in other important European markets, such as Germany and neighbouring Portugal, a market that is further down the electric road than Spain,’ Azofra added. ‘The need for brands to comply with emissions targets, meet infrastructure requirements to enable electric-vehicle development, alongside a certain price war in the new market, might be behind this drop.’

Switzerland sees transaction slump

The Swiss used-car market has experienced significantly increasing supply for several months and is only at a lower level for young-used cars when compared to the pre-COVID-19 era.

The active market volume index for two-to-four-year-old passenger cars was 1.3% lower in May than in April, but 36.4% higher than a year earlier. Additionally, as the cost of living increased, used-car transactions dropped at the beginning of 2023 and show no clear sign of making a recovery from a weak 2022.

Compared to April, the sales volume index dropped by 12.3% but went up 4.3% year on year. With higher supply and diminished demand, the average value retention of a 36-month-old passenger car fell once more to 50.9% in May, down 0.4% month on month, but up 3.6% year on year.

The %RV of HEVs posted a particularly strong year-on-year gain of 18.6%, to 55.7%. This was followed by petrol cars (51.7%), diesel models (49.6%) and BEVs (48.6%). 36-month-old PHEVs retained 48.4% of their original list price.

The average days to sell increased slightly in May, with a passenger car aged two-to-four years in stock for 77 days. HEVs sold the quickest after an average of 43 days, followed by diesel cars after 74 days and petrol cars after 77 days, then PHEVs with 81 days and finally, BEVs after 91 days.

‘As used-car demand is expected to weaken amid overall increasing supply, a further and slightly accelerated decreasing trend can be expected, although values of three-year-old used cars remain relatively high,’ said Hans-Peter Annen, head of valuations and insights, Eurotax Switzerland (part of Autovista Group). ‘The %RV is forecast to finish 2023 down roughly 4% on December 2022. In 2024, RVs are expected to fall by around 3.7% year on year due to increasing supply and lower demand.’

UK used market stays strong

‘The UK’s used-car market remained strong in May,’ said Jayson Whittington, Glass’s (part of Autovista Group) chief editor, cars and leisure vehicles. ‘An average three-year-old car retained 65.9% of its original price, an increase of 8.2% compared to a year ago. That said, compared to April, RVs fell by 0.5%, although this is below the depreciation normally expect at this time of year.’

The sales volume index reveals that retail activity calmed a little in May, falling 4.1% compared to April. The active market volume index showed 5.5% more used cars were available month on month, so the market appears to be slowing slightly which is not uncommon in the run up to summer. At 38.9 days, the average days to sell indicator backs up this change, although this is only an increase of one day.

The %RV of BEVs fell again in May, but this time by only 1.4% month on month, so it could be that they are beginning to find a new price level. BEV models still appear to be a retail challenge, however, with their average days to sell increasing by 5.6 days, up to 58.7 days. That is over 25 days longer than May last year. Their rate of sale also suffered in May, falling by almost 19%, although 256% more BEVs were sold than last year, so it is clear that there remains reasonable demand, just not enough to cope with the increased supply.

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Monthly Market Update: Pressure mounts on RVs as supply outweighs demand in March

In absolute terms, residual values (RVs) of three-year-old used cars rose year-on-year across European markets last month. While values represented as a retained percentage of the original list price (%RV) also grew, it was to a lesser extent across the board.

Austria saw the greatest increase in %RV at 13.6%, with Italy and Germany following closely behind, posting 11.4% and 10.7% respectively. Meanwhile, the UK was the outlier with a growth of just 0.5% in %RV terms compared to March 2022.

This was not the only instance where the UK went against a larger market trend. Alongside Italy, both countries saw demand outstrip supply. Other European markets experienced the reverse with a greater number of used-car adverts than sales, putting more pressure on RVs.

The %RV of battery-electric vehicles (BEVs) increased across markets, except in the UK where a 9.6% decline was recorded. However, some carmakers recently lowered new-BEV prices to attract consumers outside the early-adopter sphere.

This will most heavily impact the absolute RVs of directly comparable used cars, including very-young used models, demonstrators, and rental vehicles. While older models will also be affected, it will take longer for this effect to cascade.

More broadly, the continual acceleration of electric vehicle (EV) technology means consumers of both new and used cars may hold out for longer as they wait for the latest technological developments and improved ranges. This could mean both lower supply and demand for the used-BEV market.

Click here to open the interactive dashboard

The interactive monthly market dashboard examines Austria, France, Germany, Italy, Spain, Switzerland, and the UK. It includes a breakdown of key performance indicators by fuel type, including RVs, new-car list prices, selling days, sales-volume and active market-volume indices.

Scenario analysis

The base-case scenario of low supply and falling demand comes with positives and negatives. If the economic situation in Europe continues to diminish, used-car prices will experience greater pressure as demand drops. Big improvements to supply would only serve to compound this effect.

For example, the automotive industry is still struggling with supply-chain constraints and semiconductor shortages remain. However, a sudden reversal caused by lower demand for consumer electronics could mean a faster solution for carmakers.

VNC Automotive pointed out that the ‘semiconductor drought could soon become a flood of chips.’ If that were the case then supply would likely increase while demand continues to drag, weighing down RVs.

Any increased disruption of new-car supply would benefit used-car prices. This could happen if automotive suppliers suffer from increased costs and economic difficulties. The possibility of the war in Ukraine escalating further also remains. This could damage Europe’s already fragile supply chains. RVs might also climb if there is an unexpected improvement in used-model demand. If new-car deliveries take a hit, more consumers might veer away from the market and buy used cars instead.

RV pressure expected in Austria

Living costs continue to rise in Austria and used-car transactions are slowing compared to 2022. The sales-volume index highlights the weakening demand with a 27.4% decline compared to March last year. Hybrid-electric vehicles (HEVs) were hit hardest once again, suffering a 32.4% year-on-year drop.

Meanwhile, the supply of two-to-four-year-old passenger cars was 28% higher in March 2023 than a year earlier. Yet supply was lower in 2022 than prior to the COVID-19 pandemic, which started affecting the market at the beginning of 2020.

After a slow February, average days to sell decreased to a total of 68.5, confirming the weakening in used-car demand. HEVs and plug-in hybrids (PHEVs) sold the fastest, averaging around 48 days, followed by diesel cars with 67.8 days, then petrol models and BEVs with around 71.7 days.

‘Despite weakening demand and improving supply, residual values of 36-month-old cars have remained stable,’ explained Robert Madas, Eurotax (part of Autovista Group) regional head of valuations, Austria, Switzerland, and Poland. ‘The %RV remained almost unchanged in March with cars retaining 55.4% on average. This marked a 13.6% year-on-year gain.’

HEVs currently have the highest %RV trade value at 60.2%, followed by petrol (55.8%), diesel (55.3%) and PHEVs (55.1%). Meanwhile, 36-month-old BEVs retained the lowest value at 52.2%. While supply recovers, demand is expected to weaken. Therefore, pressure on RVs can be expected. Prices of three-year-old cars will remain relatively high, with just a slightly decreasing trend.

‘The %RV is forecast to end 2023 approximately 2.6% down compared to December 2022. For the year 2024, %RV is expected to decrease further by around 3.4% year on year due to weakening demand and increasing supply,’ Madas added.

BEVs shaken in France

The used-car market was stable in France last month, with slightly lower absolute residual values but marginally higher values in %RV terms. Climbing prices have not influenced RVs as increases have been too steep in recent months.

Fewer private buyers purchased a used vehicle in March. Those who did focused on older models or a lower segment, mainly led by budget. Cars above the 12-year age bracket suffered the least, highlighting that consumers are not following list-price increases.

‘BEV residual values decreased in March. The market has been shaken by lower Tesla list prices, as the brand acts as a BEV reference point,’ said Ludovic Percier, Autovista Group residual value and market analyst for France. ‘Big list price decreases have been followed by drops in %RV, although this has been more severe in absolute terms. Some manufacturers are already following the trend and lowering prices to stay competitive.’

Compared to February, petrol followed the marginally declining market trend in March, while diesel was stable in list price and residual value terms. As new-car buyers have been switching from internal-combustion engine (ICE) models to other powertrains in recent years, used-car market availability is lower.

Despite the implementation of low-emission zones (ZFE) and the diesel’s blemished reputation, their RVs did not drop by much compared to February. ZFEs only impact cities with 150,000 inhabitants or more and does not affect drivers covering high mileages. However, from late 2024 and into 2025, diesel will be more heavily impacted.

‘Hybrid RVs remained stable with a very slight increase in absolute terms,’ Percier said. ‘PHEVs experienced an increase month on month, as there were a lower number of vehicles compared with February. There were also more premium models present on the used-car market, with higher ranges in full-electric mode. A major decrease is still expected in mid-2023.’

Market sensitivity in Germany

Looking back at new-vehicle registrations over the past six months from February, production capacity appears to be slowly recovering. Compared to the previous year, more than 200,000 additional units were registered, which was driven in no small part by the expiry or reduction of PHEV and BEV subsidies.

‘Tactical registrations are also picking up speed again, growing by 13% over the same period. At least 60% of this growth is due to electrified powertrains and foreshadows growing price pressure on the young-used-car market,’ said explained Andreas Geilenbruegge, head of valuations and insights at Schwacke (part of Autovista Group).

The consequences are already visible with stronger price corrections for PHEVs and BEVs, while registrations of ICE models are up slightly again. However, this should not obscure the fact that the total number is still well below the pre-COVID-19 level and will contribute to the stability of RVs in the long term.

‘Overall, offer prices across all ages and drive types remain high, but increasing stock days will encourage some sellers to lower prices,’ Geilenbruegge said. ‘The used-car market’s usually strong summer months are set to follow. Inexpensive mobility seems to be in particularly high demand, considering the continuous positive developments in the small and mini segment.’

In general, classic body types are doing better than their SUV counterparts thanks to their usually lower price. This highlights the market’s current sensitivity and level of consumer exhaustion in terms of purchasing power and willingness to buy.

Stability indicated in Italy

Last month’s new-car market sales volumes confirmed the recovery observed in January, with an increase of 18.4% compared to the first two months of 2022. However, the sales-volume index highlights that transactions on the used-car market are still not declining, with a growth of 1.4% compared to February, and even 25.7% compared to a year ago. In general, almost all fuel types are seeing sales up compared to February or are at least relatively stable.

‘The only exceptions are HEVs and PHEVs, down 10.3% and 5.4% month-on-month respectively. Meanwhile, CNG suffered the biggest drop at 56.4%. The fact that most manufacturers have abandoned this fuel type, alongside its rising cost per kilogramme, is certainly influencing this trend,’ commented Marco Pasquetti, head of valuations, Autovista Group Italy.

‘In %RV terms there was weak growth (up 0.3%), indicating a more stable situation. This is probably the prelude to a trend reversal that has not yet materialised, but which some remarketing professionals are beginning to detect and report,’ Pasquetti said.

From Q4 2022 onwards, however, the price has been falling sharply. This trend is likely to have a positive influence on %RVs, which currently stand at 44.3% compared to an average of 55.6%, down 4.4% compared to March 2022.

Breathing space for Spain

With more caution than optimism, the first quarter of 2023 gave Spain’s automotive sector a little breathing space. New-vehicle registrations were up 20% year on year in February. Although some of these deliveries come from orders placed in 2022, supply capacity has improved. This increase helps fulfil demand from fleet operators, enabling renewals and injecting young used vehicles into the market.

‘In this respect, used-vehicle transactions improved month on month and year on year. Although the overall variation is slight – up 3% in both cases – the age of these vehicles is significant. Sales of used models less than a year old and those between one- and three-years-old grew more than 20% and over 10% respectively,’ said Ana Azofra, Autovista Group head of valuations and insights, Spain.

‘This rejuvenation of supply is a relief to professionals who have capitalised on most of these sales. In any case, the market has quickly absorbed these young vehicles and the active supply of used models is again down by 20%, so the outlook remains optimistic,’ she added.

The month saw almost imperceptibly small negative adjustments to the transaction prices of petrol and diesel vehicles compared to February 2023. BEVs saw a slightly positive correction, more related to the change in the mix, with an increasing share of premium models featuring better performance.

The winners continue to be HEVs, with a growth of 2.3% compared to the previous month. Toyota led the ranking of models but this was not only among hybrids, where it is more logical to find them due to the weight of the brand, but also in the general ranking of all fuels. The five fastest-selling models in March were the Toyota RAV-4, Yaris, C-HR, Aygo and Citroën C4.

Meanwhile, the volume of used PHEVs on offer rose 75% compared to 2022. But they are not performing well in terms of turnover, with the number of days needed to sell increasing and transaction values showing a negative trend.

Transactions slow in Switzerland

The Swiss used-car market continued to see rising supply, with young used cars the only exception compared with the pre-COVID-19 period. The active-market volume index was 1.8% higher for two-to-four-year-old passenger cars in March compared to February, and 40.7% higher year on year.

‘With the rising costs of living, used-car transactions continued slowing compared to 2022,’ said Hans-Peter Annen, head of valuations and insights, Eurotax Switzerland (part of Autovista Group). ‘The sales-volume index remains on the growth path with a 4.2% increase compared to February, and a 3.2% increase year on year.’

As supply rose and demand sank slightly, the average value retention of 36-month-old passenger cars decreased to 51.3% in March, down 0.8% month on month, but still up 7.5% year on year.

HEVs posted a particularly strong year-on-year %RV gain of 20%, retaining 54.7% of their list price value. This was followed by petrol (52.1%), diesel (50%) and BEVs (49.4%). Meanwhile, 36-month-old PHEVs retained the lowest value, at 48.9% of their original list price.

The average days to sell remained unchanged in March, two-to-four-year-old passenger cars in stock for 76.5 days. HEVs sold the quickest, after an average of 66.7 days, followed by BEVs after 73.7 days and PHEVs at 75.2 days, then petrol and diesel cars after 76.5 and 77.4 days respectively.

‘Used-car demand is expected to weaken amid stable supply, a further decreasing trend is to be expected although values of three-year-old used cars remain relatively high,’ Annen said. ‘The %RV is forecast to finish 2023 around 3.1% down on December 2022. For 2024, RVs are expected to fall by around 3.7% year on year due to increasing supply and weakening demand.’

Mixed electric fortunes in UK

The UK’s used-car market was buoyant in March, with the number of days to sell falling by 4.8 days compared to February. At just 39.3 days, this was 15.9 fewer than last year. The sales-volume index confirms that strong retail demand was present, with 17.3% more cars sold compared to March 2022. At the same time, supply slowed, as confirmed by the active-market volume index which shows 25.1% fewer cars were available compared to March 2022.

‘As a result of increased demand and diminished supply, the average residual value of a three-year-old car grew by 2.4% compared with February,’ explained Jayson Whittington, Glass’s (part of Autovista Group) chief editor, cars and leisure vehicles. ‘Although a proportion of the uplift is due to March’s registration plate change effect, a direct comparison with the same plate last year still shows an increase of 0.5%.’

Petrol cars experienced a %RVincrease of 1.8% year on year, meanwhile, diesel models fell by 1.3%. HEVs were down by 0.3% and PHEVs increased by 0.5%. BEVs experienced the largest movement, falling 9.6% in %RV terms compared to March 2022.

All-electric models remain under serious pressure in wholesale channels, with RVs expected to continue to decline in the short term. But BEVs do continue to see very good retail demand. The sales-volume index shows a massive 386.6% year-on-year increase in sales. However, demand is failing to keep pace with the increase in supply.

‘One factor of concern for dealers is the length of time it takes to sell a BEV, which is currently 52.5 days on average, versus the general average of just 39.3. Therefore, with the potential risk of two costly book drops before retailing a BEV, it is easy to understand why dealers have become cautious and auction hammer prices have been in decline,’ Whittington added.

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Monthly Market Update: European used-car prices resilient in January amid challenges for BEVs

The average residual value (RV) of a three-year-old used car increased across most European markets in January, except for modest corrections in France and Switzerland.

Used-car prices outpaced list-price developments in most markets. Accordingly, values of three-year-old used cars, represented as a retained percentage of their original list price (%RV), either held firm or gained last month, except in Austria and France. This aligns with double-digit year-on-year declines in the sales-volume index in the two markets.

Although there are grounds for cautious economic optimism, the cost-of-living crisis will invariably erode consumer demand for used cars, which would ordinarily put pressure on RVs. However, in addition to new-car supply challenges, the COVID-19 pandemic significantly derailed the European new-car market from March 2020 onwards. This will acutely reduce the volume of cars de-fleeting after three years.

So, undersupply into the used-car market is expected to persist, which will compensate for diminishing demand. Accordingly, Autovista Group forecasts that the %RV will not decline significantly across European markets in 2023 and 2024.

Battery-electric vehicles (BEVs) face unique challenges. On one hand, the surge in registrations in Germany at the end of 2022 does not bode well for RVs in the short term. Furthermore, Tesla has reduced list prices, which is having a ripple effect across the prices of its used models and BEVs in general. On the other hand, values stand to gain with lower incentives available in France and Germany and as countries introduce more low-emission zones.

Nevertheless, their low share in new-car markets such as Italy and Spain, and even weaker used-car presence, limits their potential, along with concerns over charging infrastructure.

Click to open the interactive dashboard

The interactive monthly market dashboard examines Austria, France, Germany, Italy, Spain, Switzerland, and the UK. It includes a breakdown of key performance indicators by fuel type, including RVs, new-car list prices, selling days, sales-volume and active market-volume indices.

Scenario analysis

There are upsides and downsides to this base-case scenario of undersupply and diminishing demand. Used-car prices will come under greater pressure if the economic situation deteriorates in Europe, with a greater negative impact on demand. This would be compounded if there are significant supply improvements.

For example, lower demand for consumer electronics could see a quicker resolution to the semiconductor shortages in the automotive industry. According to VNC Automotive, the ‘semiconductor drought could soon become a flood of chips.’

Conversely, there are risks of greater disruption to new-car supply, which would benefit used-car prices. Automotive suppliers could succumb to mounting costs and economic headwinds. The risk of the war in Ukraine escalating remains too, with potential consequences for Europe’s fragile supply chains. Any unforeseen improvement in used-car demand, either if fewer new models can be delivered or consumers defect to buying used instead of new, would also push RVs higher.

Modest pricing decline in Austria

Living costs are rising in Austria and used-car transactions are slowing down compared to 2022. The sales-volume index clearly shows weakening demand in January, with a year-on-year decline of 20.5%. Conversely, the supply volume of passenger cars aged two-to-four years was 22.2% higher year on year. Average days to sell have increased to 73.5 days.

Hybrid-electric vehicles (HEVs) are currently selling the fastest, averaging 50.6 days, followed by BEVs with 59.7 days, petrol cars with 73.2 days and diesel cars with 73.6 days. Plug-in hybrids (PHEVs) are selling the slowest, averaging around 104 days.

Despite weakening demand and improving supply, RVs of 36-month-old cars have remained relatively stable. The average %RV decreased by 0.6% month on month in January, with cars retaining 54.9% of their list price on average. This marks a solid 17.7% year-on-year gain.

HEVs are currently leading with a trade value of 58.4% of their original list price, followed by PHEVs (55.8%), then diesel cars and petrol cars (both 54.9%). 36-month-old BEVs retain the lowest value, at 53.6% of list price.

As demand is expected to weaken while supply recovers, pressure on RVs is anticipated. Robert Madas, Eurotax (part of Autovista Group) regional head of valuations, Austria, Switzerland, and Poland, forecasts that the %RV will end 2023 approximately 3% down on December 2022. Nevertheless, prices of three-year-old used cars will remain relatively high. For 2024, Madas predicts that the %RV will decrease by a further 3.6% year on year due to weakening demand and increasing supply.

Buyers await lower prices in France

The French used-car market has seen drastic changes since 2021, with rising RVs amid list-price increases and limited availability of new and, in turn, used cars. The market stabilisation since the end of 2022 was confirmed in January 2023 with the %RV falling 1.5% month on month.

‘Higher list prices are no longer influencing used prices, which is reflected in the poor development of the sales-volume index as buyers are holding back, expecting lower sales prices. Private buyers are focused on older vehicles or lower segments than usual, mainly led by budget. Accordingly, values of used cars aged over 12 years are suffering the least,’ explained Ludovic Percier, residual value and market analyst, France, at Autovista Group.

The %RV of all fuel types is either stable or in decline, except for healthy price growth for BEVs. ‘Vehicles available on the used-car market now offer a higher range, which previously limited the usability of vehicles and the number of customers,’ Percier commented. Nevertheless, BEVs still have the lowest values in both absolute and value-retention terms.

RVs of petrol and diesel cars are subtly declining after ongoing increases in recent months due to new-car shortages, long delivery times, and higher list prices. Furthermore, as new-car buyers have been switching from internal-combustion engines (ICE) to other fuel types over the last two years, this reduced their availability on the used-car market and drove prices higher.

Even with the rollout of low-emission zones (ZFEs) and a tarnished image, RVs of diesel engine cars are falling slowly. ZFEs are only in towns and cities with at least 150,000 inhabitants and do not target high-mileage drivers, but will have a bigger impact on diesel from late 2024 and into 2025.

PHEV values should remain stable for the time being but they already decreased slightly at the end of last year and Percier anticipates further declines from mid-2023 onwards.

EVs under pressure in Germany

The high volume of new-car registrations in December ‘is a prime example of how extraordinarily the German new-car market has been distorted by external influences in recent years and how the implicit mechanisms of supply and demand are being undermined,’ explained Andreas Geilenbruegge, head of valuations and insights at Schwacke (part of Autovista Group).

The prospect of a lower environmental bonus for BEVs and the end of incentives for PHEVs from 1 January meant every eligible car coming off the production line with registration papers, was taken to registration offices to receive the subsidy. January is therefore expected to be a well below-average month, due to the huge number of registrations that were brought forward.

‘For used electric vehicles, this means that the high price level will come under increasing pressure but experience a strong rebound in the coming months. However, residual values for most vehicles continue to stabilise at a high level and show only slight signs of fatigue due to the loss of purchasing power and reluctance to buy. Stock days are also still in a moderate to favourable range,’ Geilenbruegge noted.

Since January is not known for unusual activity from a used-car point of view, it will only become clear from the spring onwards how far values may decline. This will depend not least on the recovery of production and supply before prices presumably take another slight upturn later in the year.

ICE cars will continue to become increasingly rare and the absence of incentives for used electric vehicles (EVs) will maintain stable prices. The soaring prices of new cars will also keep used cars very attractive.

Meanwhile, Tesla has recently caused quite a stir in the industry with a move in the opposite direction. ‘Ultimately, this does a disservice to value retention and not only of the company’s own models,’ Geilenbruegge concluded.

‘Awareness of BEVs is growing’ in Italy

The new year started in the same way 2022 ended in Italy, with RVs increasing sharply, especially compared to a year ago. ‘Suffice to say that a 36-month-old used car with 60,000km on the clock has an average residual value of around €18,900, i.e. almost €2,000 more than in January 2022,’ commented Marco Pasquetti, head of valuations, Autovista Group Italy.

The volume of sales recorded through the main portals, represented by the sales-volume index, also indicates a growing used-car market (up 9.5% compared to December), even though vehicles remain in stock 24 days longer than a year ago.

Used BEVs enjoyed especially strong value growth in January, up 14.8% year-on-year, with the sales-volume index rising by a phenomenal 160.5% year on year. ‘Awareness of BEVs is certainly growing in Italy, but it is still advisable to remain cautious as their share remains very low in the new-car market, at 3.7% in 2022, and especially in the used-car market,’ said Pasquetti.

Pasquetti expects RVs to be higher at the end of 2023 than in December 2022 due to inflation and supply problems, albeit with significantly slower growth than last year.

Lack of stock ‘weighing down’ Spain

The Spanish new-car market closed 2022 with 813,396 registrations and a year-on-year decline of 5.4%. In addition to established supply issues, transport problems constrained the sector further. In 2023, registrations are expected to improve but this depends on what happens to inflation, interest rates, energy prices and, ultimately, how the war in Ukraine develops.

ICE vehicles account for 64% of new-car registrations in Spain. Of the remaining 36%, HEVs capture the largest share (25%). BEVs and PHEVs account for only 9% of the market, in line with Italy, which is clearly below the European average (19%) and neighbouring countries such as Portugal, where they already have a 21% share.

The used-car market also finished 2022 below forecasts, with a string of declines throughout the year. In total, 1,885,553 units were transacted according to the Spanish dealers’ association GANVAM, resulting in a ratio of 2.3 used cars for each new car registered.

‘The lack of stock is weighing down the possibilities of a market that tends to benefit in times of crisis. The limited availability of product mainly applies to younger vehicles, which tend to be in the hands of the dealer network, while the weight of vehicles over 10 years old continues to increase considerably,’ explained Ana Azofra, Autovista Group head of valuations and insights, Spain.

With regard to average RVs, after the usual adjustments at the end and beginning of each year, Azofra expects stability in the coming months. ‘There is a modest downward trend for petrol cars but HEVs are escaping this fate as they are in high demand, with quick turnaround times, as they will benefit from the implementation of zero-emission zones in almost 150 Spanish cities.’

‘It would be expected that BEVs could also benefit from this development but, for the time being, they do not even command a 1% share of the used-car market. As long as the charging infrastructure does not improve, the chances of developing a second-hand electric market are slim,’ Azofra concluded.

RVs stable in Switzerland despite demand

‘The Swiss used-car market has experienced increasing supply for several months, but it is still lower than before the pandemic, especially for younger used cars. Moreover, with rising costs of living, used-car transactions continue to slow down compared to the first half of 2022,’ noted Hans-Peter Annen, head of valuations and insights, Eurotax Switzerland (part of Autovista Group).

Across all two-to-four-year-old passenger cars, the active-market volume in January was 1.8% higher than a month earlier, and 39.2% higher than in January 2022. On the other hand, the sales-volume index has retreated further, with a 10.5% decrease compared to December, albeit with only a small 0.2% decline year on year.

Despite cooling demand, the average value retention of 36-month-old passenger cars grew slightly to 52.6% in January (up 1% month on month and up 13.5% year on year). BEVs posted particularly strong year-on-year %RV gains of 21.4%. Nevertheless, petrol cars are currently leading, retaining 53.4% of their original list price, followed by HEVs (52.0%), BEVs and diesel cars (both 51.2%). 36-month-old PHEVs retain the lowest value, at 49.8% of their original list price.

The average days to sell clearly increased in January, with a passenger car aged two to four years in stock for 73 days. Petrol cars are selling the quickest, after an average of 72 days, followed by diesel cars after 73 days, PHEVs after 79 days, BEVs after 81 days, and HEVs after 84 days.

As used-car demand is expected to weaken amid recovering supply, Annen foresees a slightly decreasing trend but values of three-year-old used cars will remain relatively high. He forecasts that the %RV will finish 2023 around 3% down on December 2022. For 2024, Annen expects RVs to fall by around 3.7% year on year due to weakening demand and increasing supply.

RVs strengthen in UK, except for BEVs

‘The UK’s used-car market returned to seasonal norms in January, with an uptick in demand. Although the month began slowly, wholesale activity ramped up as the month progressed. The Glass’s editorial team observed auction conversion rates approaching 80%, something not seen regularly throughout 2022,’ explained Jayson Whittington, Glass’s (part of Autovista Group) chief editor, cars and leisure vehicles.

RVs for all fuel types strengthened in January, except for BEVs. There has been an especially sharp increase in available volumes of used BEVs according to the active-market volume index, which shows a rise of 41.7% compared to December. BEVs also performed poorly in the last quarter of 2022 and, as a result, values have fallen sharply in recent weeks. The average value of a three-year-old BEV now sits at 59% of the original list price, a fall of 6.6% compared to December.

‘As values have fallen sharply, there is a risk that dealers may become reluctant to buy BEVs speculatively, in fear that prices will continue falling and wipe out any profit margin. This will of course affect demand further. Tesla’s recent move to reduce new-car prices is also likely to affect used values and may lead to other brands suffering more depreciation as consumers evaluate what they can now get for their money,’ commented Whittington.

However, it is worth remembering that used BEV values were reasonably high throughout 2022, the result of a spike in interest from retail consumers and businesses looking to avoid waiting up to a year for a new one. At three years of age, used BEV prices are 4.9% higher than in January last year.

‘Although BEV values are potentially facing a correction, they are only narrowly behind other fuel types when expressed as a percentage of their original list price,’ Whittington concluded.

The January 2023 monthly market dashboard provides the latest pricing, volume and selling-days data.

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