I have been writing this monthly update for over six years giving my views on the market. Every so often an issue comes up that has a fundamental effect on the market (Covid-19 anyone?) and I believe we are about to see one of those moments in the used BEV market.
2024 is going to be carmageddon for used BEVs. All retailers need to have a strategy in place to make sure that their balance sheets are not shattered by being on the wrong side of the EV depreciation curve. Why am I making this prediction? It is an issue of looking at the fundamentals.
2024 will be characterised by oversupply of new and used BEVs, with little inherent demand for the used vehicles coming through unless they are at a significant discount to their ICE equivalents. The new car oversupply will be caused by:
All this will lead to manufacturers being forced to discount their BEVs to make the sales they require. This will then have an follow-through effect on used residuals, which will be exacerbated by the following issues:
All in all 2024 will be a year of significant challenges for anyone retailing BEVs. However, they still have a relatively small market share. So, as long as you have a strategy to manage your used stock, then all will be fine. But beware manufacturers bearing BEV gifts, as they use retailers balance sheets to try and trade their way out of the problem.
Read my latest blog about the emerging trends you need to be aware of, and watch out for my Linkedin blog in for my agency update showing the SMMT Mercedes and Volvo sales compared to Audi and BMW. If you do not get this in your feed, feel free to connect to me on Linkedin and it will start showing up.
Enjoy the rest of the month and remember that every lead is precious. The biggest challenge is making sure your teams are logging and following them up properly. This is especially true of your phone leads. Be phone fit and you’ll be ahead of your peers.
*Based on 2022 stock.