CarMax (KMX), the largest used car retailer in the US, said its seeing a huge spike in electric vehicle interest from its customers. And when those customers do buy EVs, they are buying Teslas.
In its annual EV consumer report, CarMax revealed that search volume for the word “electric” doubled from February 2022 to February 2023, when the retailer compiled data for its last EV report. CarMax analysts first noticed a spike back in February and March of last year, not surprisingly when gas prices were spiking around the time the war in Ukraine was intensifying. CarMax says search interest then peaked in the past year in October, which coincided around the time new rules for the federal EV tax credit were being implemented.
Most interesting is the data CarMax compiled from its dealerships and online car shopping activity, which dove into what the most popular used EVs were in its inventory. According to CarMax sales data from February 2023, the top five most popular EVs were the Tesla Model 3, Tesla Model Y, Nissan Leaf, Ford Mustang Mach-E, and the Chevrolet Bolt EV.
The Chevy Bolt is notable in the report. GM plans to end production at the end of the year. What this means for used pricing is uncertain. But it's possible the Bolt may see price appreciation as new inventory drops.
Meanwhile, Tesla 's at the top of the EVs purchased, though it's not surprising given the sheer number on the road—and likely in CarMax’s fleet. One thing to watch: Tesla price cuts. It reduced prices of new vehicles steeply in the beginning of 2023, which could lead to CarMax adjusting used Tesla pricing to make them more attractive.
CarMax did not reveal this pricing data in terms of cuts, but the retailer must have dropped prices in order to move used inventory, which then lead to higher sales.
CarMax did reveal average prices paid for those used EVs in February, with the Model 3 selling for an average of $37,000, and the Model Y coming in at $47,807.
Also of note is CarMax’s trade-in business. That's where the retailer acquires a decent amount of its inventory. CarMax is famously known to offer any car a quote brought into its dealerships, from 20-year old used cars to nearly brand new supercars.
When looking at those cars traded in to buy used EVs at CarMax during the September 2022 to February 2023 timeframe, CarMax found the top traded-in vehicle type were SUVs, at around 40%, followed by sedans and coupes at 29%.
Even more interesting were the brands traded in for those EVs. CarMax says Toyota vehicles were the top traded-in brand at 12%, followed by BMW and Ford at 8%, Honda at 7%, and Chevy at 7%.
The data highlights something of an issue with Toyota, as the brand has been slow getting up to speed with EV offerings, and has had to pivot recently to increase its push into electrification. (Toyota has only one EV on sale at the moment, the bZ4X SUV, and it is only available in limited quantities.)
One more interesting nugget from CarMax data: the most common vehicles traded in for a Tesla Model 3 were the Honda Civic and Toyota Tacoma pickup. The Tacoma is somewhat surprising given the Tacoma and Model 3 aren’t exactly comparable vehicles.
As for purchases of used Tesla Model Y SUVs or Model S higher-end sedans, the most common vehicle traded in was - a Tesla Model 3.