The used car market is set to be upended over the next few years, with supplies of ICE-powered vehicles set to drop. It comes as manufacturers aim to meet government targets that prioritize or mandate sales of EVs.
According to a report by Cox Automotive, the influx of internal combustion engine (ICE) vehicles into the second-hand market in Britain is projected to decrease by up to 69 percent by 2028. Despite recent reports of price volatility and growth slowdown in the electric vehicle (EV) market, the organization anticipates strong demand for used ICE and hybrid models. Consequently, dealerships are expected to compete for the most sought-after models in this segment.
The prediction aligns with many automotive companies’ decision to go EV-only before the UK Government stops selling non-electric powertrains in 2025. Amongst those is Jaguar, which will kill all gas-powered cars as early as June this year to focus on EVs.
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In 2023, ICE cars accounted for 94.3 percent of used car sales in the UK. But with new ICE registrations predicted to drop from 71 percent to just 38 percent by 2028, a larger share of the used car market will be made up of EVs. However, it cautions that there may be an oversupply of EVs in the used car market in the medium term — at least “until values become less volatile and consumer confidence grows.”
Used car buyers are likely to be reluctant to switch to EVs immediately, with the prediction being that many will prefer to replace an ICE like for like. This is also where hybrid options will be favored, as while they may not be the first choice of buyers, their availability in the used market will be greater.
However, Cox recommends that dealers target growing their EV stocks long-term, with the used market predicted to increase by 11 percent by 2028. “If you’re a dealer looking now at a forecourt that’s 90% ICE vehicles, consider how that will look 12 months from now and another year from then, knowing
that the availability of ICE vehicles is shrinking at a rate of 10-16% a year going forward,” says Philip Nothard, Insight Director at Cox Automotive.
