The shift away from cars with dirty combustion engines is running into a new hurdle: drivers don’t want to buy used electric vehicles, and that’s undermining the market for new ones, too. In the US$1.2-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 infrastructure.
A fierce price war sparked by Tesla and competitive Chinese models is further depressing values of new and used cars alike, threatening earnings at rivals like Volkswagen and Stellantis. Because most new vehicles in Europe are sold via leases, car makers and dealers who finance these transactions are trying to recover losses from plummeting valuations by raising borrowing costs. That’s hitting demand in some European markets that were in the vanguard of the shift away from fossil fuel-powered propulsion