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Since early last year, the cars rolling off Tesla Inc.\u2019s California assembly lines\u00a0have been selling for\u00a0steadily lower prices<\/a>.\u00a0This has had a happy knock-on effect on a car lot just across the freeway\u00a0from the company\u2019s San Francisco Bay area factory.<\/p>\n CarMax Inc.\u2019s superstore in Fremont, California, has seen a stream of shoppers more willing than ever to kick the tires on an electric vehicle. While Tesla\u2019s price cuts aren\u2019t all that\u2019s driving the foot traffic \u2014 the range of pre-owned plug-in models to choose from is steadily broadening \u2014\u00a0Elon Musk\u2019s\u00a0early dominance of the market for new EVs has translated to serious sway over used-car dynamics.<\/p>\n \u201cWe\u2019ve seen a really good amount of interest,\u201d\u00a0Henry Melendez\u00a0said in a phone interview. The CarMax general manager said customers have told him they wanted to seize on\u00a0incentives and falling prices. \u201cThey\u2019ve always wanted to get into an electric vehicle, but it just wasn\u2019t quite as affordable.\u201d<\/p>\n The trend taking place on Tesla\u2019s doorstep in Fremont is playing out across much of the US. Retail sales of used EVs\u00a0jumped<\/a>\u00a070% in the first half of the year, according to market researcher\u00a0Cox Automotive. The average price\u00a0of a used EV\u00a0has\u00a0fallen<\/a>\u00a0below $30,000, iSeeCars.com said in June, noting they\u2019d become\u00a0less costly than the typical gas-powered vehicle.<\/p>\n Affordability remains a\u00a0major impediment<\/a>\u00a0to EVs catching on with a wider swath of US new-car buyers. But the momentum retailers are seeing for used vehicles serves as a positive sign that demand will pick up once they\u2019re able to offer models that are more affordable.<\/p>\n \u201cTesla is driving the market by lowering the prices,\u201d said Scott Shannon, a general sales manager at\u00a0Axis Motorcars<\/a>\u00a0in Jersey City, New Jersey. The dealership\u00a0has about 400 new and used cars in inventory, and just six EVs in stock, he said.\u00a0\u201cUsed EVs are sold more quickly than gas cars, almost in a week.\u201d<\/p>\n Not all dealers are having such luck. Part of what\u2019s driving demand is ample supply \u2014\u00a0the inventory of used EVs is about\u00a0four times<\/a>\u00a0as high now as it was in 2021\u00a0when Recurrent, a platform for buying and selling electric cars, started keeping track of the data.<\/p>\n Overall, it\u2019s taking dealers\u00a0longer to sell used EVs than internal combustion engine-powered\u00a0cars, according to auto researcher Edmunds. Where that flips is for\u00a0models priced between $20,000 and $30,000 \u2014 used EVs tend to be snapped up\u00a0within 30 to 36 days, the market researcher\u2019s data show, compared to 39 days for gas cars.<\/p>\n It helps that Uncle Sam is lending a hand. While clean vehicle tax credits worth as much $7,500 for buyers of new EVs has gotten the most attention since the 2022 passage of the Inflation Reduction Act, the law also created $4,000 credits toward the purchase of used plug-in models costing $25,000 or less. Whereas manufacturers have to meet strict criteria for their new EVs to quality for incentives, used electric cars qualify as long as they\u2019re below that price threshold and at least roughly two years old.<\/p>\n Tesla\u2019s reluctance to update\u00a0its lineup is another reason why its second-hand EVs are looking relatively attractive,\u00a0said\u00a0Jessica Caldwell<\/a>, Edmunds\u2019\u00a0head of insights. The US manufacturer hasn\u2019t substantially updated its four-year-old Model Y sport utility vehicle, and its refresh of the Model 3 didn\u2019t drastically alter the look of the sedan introduced seven years ago.<\/p>\n Drivers can snap up a used Model 3 for $22,000 and \u201cit doesn\u2019t look that different than a new one,\u201d Caldwell said. Most used EVs \u201care a good deal.\u201d<\/p>\n<\/div>\n\nRecommended Newsletter: <\/strong>High-level insights for high-powered executives. Subscribe to the CEO Daily newsletter for free today. Subscribe now<\/a>.<\/div>\n