Coming To America: The EV Graveyard Reckoning; Hardly Anyone Wants To Buy A Used One

The market for used EVs is plummeting. What will car rental companies do with the used ones? Problems started in China but have spread to Europe and the US. https://cms.zerohedge.com/s3/files/inline-images/Used-EVs-Trail-1024x589.jpg?itok=wXfEoQEO -- Bloomberg notes China’s Abandoned, Obsolete Electric Cars Are Piling Up in Cities https://www.bloomberg.com/features/2023-china-ev-graveyards/?sref=Fbhig0fX -- A subsidy-fueled boom helped build China into an electric-car giant but left weed-infested lots across the nation brimming with unwanted battery-powered vehicles. On the outskirts of the Chinese city of Hangzhou, a small dilapidated temple overlooks a graveyard of sorts: a series of fields where hundreds upon hundreds of electric cars have been abandoned among weeds and garbage.

Similar pools of unwanted battery-powered vehicles have sprouted up in at least half a dozen cities across China, though a few have been cleaned up. In Hangzhou, some cars have been left for so long that plants are sprouting from their trunks. Others were discarded in such a hurry that fluffy toys still sit on their dashboards. The cars were likely deserted after the ride-hailing companies that owned them failed, or because they were about to become obsolete as automakers rolled out EV after EV with better features and longer driving ranges. They’re a striking representation of the excess and waste that can happen when capital floods into a burgeoning industry, and perhaps also an odd monument to the seismic progress in electric transportation over the last few years.

Shenzhen-based photographer Wu Guoyong was one of the first people in China to document the waste that results from frenetic development, taking striking drone shots of the piles of abandoned bicycles in 2018. In 2019, he filmed aerial footage of thousands of electric cars in empty lots around Hangzhou and Nanjing, the capital of China’s eastern Jiangsu province. “The shared bikes and EV graveyards are a result of unconstrained capitalism,” Wu said. “The waste of resources, the damage to the environment, the vanishing wealth, it’s a natural consequence.” Hoot of the Day - “EV graveyards are a result of unconstrained capitalism.” Mercy! The Chinese government literally forced people to buy the damn things. Biden is attempting the same in the US. That article is from August. Let’s flash forward to December 21 to see how things are going in Europe.

What started in China is not limited to China. A second Bloomberg article reveals No One Wants Used EVs, Making New Ones a Tougher Sell Too https://www.bloomberg.com/news/features/2023-12-22/bmw-tesla-and-other-electric-used-cars-are-proving-tough-to-sell?sref=Fbhig0fX -- Because most new vehicles in Europe are sold via leases, automakers and dealers who finance these transactions are trying to recover losses from plummeting valuations by raising borrowing costs. That’s hitting demand in some European markets that were in the vanguard of the shift away from fossil fuel-powered propulsion. Some of the biggest buyers of new cars, including rental firms, are cutting back on EV adoption because they’re losing money on resales, with Sixt SE dropping Tesla models from its fleet.

The problems are expected to intensify next year, when many of the 1.2 million EVs sold in Europe in 2021 will come off their three-year leasing contracts and enter the secondhand market. How companies tackle this problem will be key for their bottom lines, consumer confidence and ultimately decarbonization — including the European Union’s plan to phase out sales of new fuel-burning cars by 2035. “There isn’t used-car demand for EVs,” said Matt Harrison, Toyota Motor Corp.’s chief operating officer in Europe. “That’s really hurting the cost-of-ownership story.” - “One has to slash prices significantly just to get customers to look at EVs,” said Dirk Weddigen von Knapp, who heads a group representing VW and Audi dealers.

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