Electric cars: opportunities and threats for the leading vehicle marketplaces in US, Europe and Brazil

Joreca's statistics clearly highlight the profound and swift transformation of the automotive market by Battery Electric Vehicles (BEVs). This transformation presents novel challenges for sellers, urging a closer look at significant shifts that leading online marketplaces must consider to safeguard their dominance in the realm of online sales.  

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The New Electric cars market has become a reality in most of Americas and Europe major countries

Fueled by growing client ecological awareness, stringent regulations in the US and Europe, substantial industrial efforts by Original Equipment Manufacturers (OEMs), and bolstered by national tax incentives, the new vehicle market is witnessing a pronounced shift towards 100% electric cars. In 2019, these cars comprised a mere 1% of total registrations. However, by the first quarter of 2024, they accounted for 8% of sales in the US and an impressive 15% of the Top 4 European sales. Notably, Brazil stands as an exception with less than 1% adoption of Battery Electric Vehicles (BEVs) during the same period. 

The second-hand cars market is already following this major trend

According to Joreca panels, the surge in sales since 2019 is now  impacting the second-hand car market, thus affectingthe online marketplace’s inventories.

 In established markets like the UK, the inventory of second-hand full electric cars less than 2 years old surpasses 14% of the total online available stocks for sale. Extending the analysis to include models up to 5 years old, the typical age for used cars sold by official brand dealerships, the proportion stays below 10%.

Share of 100% electric vehicles in dealer used car stocks

Used BEV are already a significant part of the inventory of the top paying dealers

Used BEV are already a  key segment for the top 25% paying dealers. Indeed, 5% of  those pros in the US or 11% in France already have at least 10% of their total stock made of 100% electric cars.

Used BEV represent two major challenges for Marketplaces:

Challenge 1: Used EV show higher price and slower rotation than gasoline or gas cars in most markets

On the cars up to 5 years old, the price markup for EV vs petrol or diesel cars goes from +17% in Brazil to +29% in Germany. While being more expensive, BEVs also tend to sell slower:+28% uptime to sell in France or even +48% in the UK . However, it is worth noticing that we don't observe this trend neither in the US nor in Brazil.

Challenge 2: Specific consumer behaviors

Factors influencing consumers purchase decision on electric cars are different from the ones about combustion engine cars.

In The Journal of Psychology, Gary L. Brase studied the "Consumer Perceptions and Decision Making about Electric Vehicles." Interestingly ecological concerns were "only” the second key topic in buyer decision. The most important factor identified in the study is battery/performance related data – including but not limited to autonomy, degradation/attrition, property/lease. Third and last significant insight influencing consumers was the financial value of purchasing the BEV. Apart from the car price itself, this item requires to take into account tax incentives, fuel consumption and warranty savings as the projected residual value for the car. A lot of data that makes this calculation different if not more complex for consumer when benchmarking BEV price versus combustion engine vehicles.

4 major potential evolutions that may change the game

Being at the same time important for key clients and significantly different in terms of easiness to sell and customers behavioral drivers, used BEVs can open the door to rank changes between leading marketplaces as well as new pure players disrupting the game.

As of today, at least four major initiatives are in place:

Traffic and pricing push for BEV

Electric cars being more expensive and slower to sell, one of the simplest solution for marketplaces is to do what they do best: provide important quality traffic and leads to dealers.  Between other initiatives, we have already saw some key US or German marketplaces offering for free extra listings boosters for BEVs of their key clients.

In UK and France some players are also investing in specific SEO and redactional contents on electrical choice to get traffic premiums on used BEV demand.

Transparency on battery range

Tying to Gary L. Brase raised concern on battery/performance related data. some sites start being quite transparent on this matter. One good example can be found with Cargurus. The US market leader offer a lot of BEV search details incusing a very comprehensive battery range selector.

Ease the BEV price calculation

As we already mentioned, calculating BEV value is far more difficult than just comparing purchase price. This complexity may stop a lot of customers to purchase electrical cars. Some site as the UK market leader, Auto Trader, have put in place a very detailed and comprehensive tool to directly calculate running cost savings while also being transparent on number of time consumer should charge a battery on a daily basis to reassure them on the lowest complexity of this task.

Advanced BEV data

The way BEV is opening the doors to newcomers and pure players can be illustrated by Aramis Group. Mastering the whole sale chain, the European leader in buying cars and reselling them B2C has created a quite extensive exclusive BEV data set. Among other, its French or UK website reassuring like the battery condition or battery specific warranty. Unique data that only major car supermarket could be able to provide in the future.