Used Electric Cars

The trade in used electric cars is obvious now that it’s here, but it does not seem that anyone in the auto business saw it coming. Manufacturers and dealers have to compete with a product segment that is not like anything they have seen before.

What makes used electric cars so different is that electric cars do not age in the same way that fuel-burning cars do. To cite the most obvious example, the battery in an electric car wears out in roughly the same way that the engine of a fuel-burning car wears out — but unlike an engine, a battery is relatively easy to replace. Indeed, there is no component in an electric car that cannot be replaced when it breaks down or wears out.

In theory, an electric car can be kept going forever as long as someone is willing to keep repairing it. Its potential life is longer than that of the 1960s pickup trucks that are still on the roads or the boats that are so old no one remembers when they were made.

Based on a recent survey of cars sold by dealers and listed online, my guess is that U.S. dealers have between 100,000 and 200,000 electric cars in stock and ready to sell. That is not a huge number, less than a weeks worth of new car sales, but it matters that anyone who wants to can buy a used electric car instead of a new car.

As you might expect, it is the sales of new electric cars that were affected first. New electric car sales hit a bump around eight months ago as the inventory of used cars expanded and prices dropped. New electric car sales fell into a funk at that point and show no sign of pulling out of it.

A challenge that all auto manufacturers face is that designs have not improved enough to care about in several years. A shopper can buy a five-year-old car and not feel like they are missing out. Electric car designs especially have stagnated, aside from the actual batteries — but as mentioned, the batteries are designed to be replaceable.

If fuel-burning cars now have an expected service life of 20 years and electric cars can last indefinitely, we may be headed slowly toward an automobile market in which half of automobile purchases are of used and reconditioned electric cars. That is a lot fewer cars for new car dealers to sell. Dealers are already feeling the squeeze of lighter demand.

Auto manufactueres have already closed some factories permanently, but now are finding that that was not enough. Especially in China, many factories are being idled for most of the month of January after enough cars were already assembled in December.

Unlike mobile phones, cars cannot be made obsolete every ten years to force consumers to upgrade. It takes longer than that to redesign and rebuild a highway network. Nor will improvements in efficiency tempt drivers to upgrade. As with LED light bulbs, every unit ever sold is efficient enough.

The market for televisions may be the best point of reference for what is ahead for cars. Most of the stores that sold televisions in 2005 have since closed, simply because the new television designs were more durable. I don’t know if that is where the auto industry is heading in the next fifteen years, but this year, it seems to be taking a step in that general direction.

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