While some identify the increasing number of used electric vehicles (EVs) as a problem for the industry, others view it as an opportunity. It could be regarded as both, and the result will depend entirely on how auto manufacturers and retailers respond to the current situation.

One thing is clear—the used EV market is still in its early stages, with limited data compared with the wealth of information that the industry has gathered about conventional cars during a century of study. That said, early indications show that certified pre-owned (CPO) used EVs should represent a key entry point for first-time EV buyers.

The CPO process involves rigorous quality checks to ensure that resold vehicles meet their manufacturer’s standards and are as close to new as possible. CPO vehicles already represent a sizable and growing portion of conventional used-vehicle sales, with car buyers increasingly discovering certified pre-owned vehicles as a path to affordability. And as compelling as the CPO process is for those buyers, it is even more compelling for potential EV buyers.

Selling Pre-Owned EVs

Selling used EVs without certifying them or offering guarantees promises to be challenging due to the uncertainties surrounding the technology. Most used EV buyers, likely purchasing their first electric vehicle, face inherent risks and seek peace of mind. They are aware that while the vehicle isn’t new, it features a powertrain and other technology that is new to them. Consequently, these buyers will respond positively to guarantees that mitigate the unknowns.

One of those unknowns is long-term reliability. Customers have serious questions about that factor compared with the reliability of gas-powered vehicles. They generally understand the lifespan of traditional cars but lack knowledge about aging EVs. While most people have a good idea of what to expect from a seven-year-old gas-powered vehicle, they have far less certainty about what ownership of a three-year-old EV will look like.

With its rigorous inspection process and lengthy warranty coverage, the CPO approach helps assure buyers of the vehicle’s reliability and quality, making CPO EVs an attractive option for those entering the EV market for the first time.

Addressing Buyer’s Concerns

The primary concern for consumers buying a used EV is the reliability of the battery and whether it will perform as well in their hands as it did when new. Although recent data suggests that EV batteries generally don’t deteriorate as quickly as some fear, the trepidation about battery life remains a key issue. This fear is aggravated by the extremely high price of the typical EV battery replacement.

A CPO process can ease these shoppers’ concerns. Of course, the EV certification process differs significantly from that for gas-powered vehicles. The inspection process must focus on battery health rather than engine and powertrain condition. To the extent possible, assessing the remaining battery life is important. Largely because EVs are still so new to the market, this is currently an inexact science, at best.

However, as the industry gathers data from the growing fleet of EVs on the road, gauging battery life will become more reliable. (The newly acquired J.D. Power company, ZappyRide, has this parameter right in its crosshairs as it offers cost-to-own projections for EVs vs. conventional vehicles.)

An Educated Seller

Beyond offering reassurances regarding electric vehicle longevity, the CPO process also solves a second significant issue currently inhibiting used EV sales: product knowledge. First-time EV buyers need the confidence that only well-schooled, knowledgeable sales consultants can provide.

An auction direct dealer in my area has set up a separate location specifically for alternative powertrain vehicles, including hybrids, plug-in hybrids and pure EVs. This dedicated lot exclusively handles these types of vehicles, and its staff members are highly knowledgeable about them.

By focusing solely on alternative powertrain vehicles, the dealer has created a specialized and unique selling environment. This tailored approach aims to provide a better customer experience by ensuring the staff can effectively communicate the benefits and specifics of these vehicles.

A highly specialized sales staff can also provide guidance in a key area unique to pure electric and other plug-in vehicles such as tax breaks, subsidies and other third-party incentives. The typical gas-powered vehicle doesn’t offer any government- or utility-sponsored incentives, but these programs are frequently critical to persuading reluctant potential buyers to take the plunge on their first EV.

Economic Benefits

A retailer near me stands out for its approach to informing consumers about EV tax credits on its website, specifying which EVs qualify and the amount of the credit. This transparency empowers buyers by providing helpful pricing and discount information.

In the EV market, confusion surrounding pricing and income requirements often hinder potential buyers from taking advantage of incentives. Doing the research process for the shopper is a smart move for any dealer who really wants to build a robust EV business.

There has been a notable shift in the used EV market in recent years. Previously, a majority of EVs were premium models, but now, an increasing number of mainstream EVs are entering this segment. This shift offers consumers a broader range of options, making EV ownership more accessible and affordable.

With mainstream EVs overtaking premium models in the used-vehicle market, the role of CPO programs as an entry point for EV buyers is more important than ever.