Electric Vehicles Are Dead? We Don’t Think So! Why CarOnSale is Doubling Down on EVs

Navigating Challenges and Driving Growth in the European EV Industry.

The Current Landscape: EV Market Trends and Challenges in Europe

The electric vehicle (EV) market in Europe is at a pivotal moment, facing a complex set of challenges that have sparked debate about its future. Despite the growing focus on sustainable automotive solutions and government incentives, the industry is grappling with significant issues that are driving price declines and contributing to a lack of demand.

Struggles in the European EV Sales 2024

One of the primary challenges facing the EV market growth in Europe is the recent decline in consumer confidence, as can be seen in the YoY change in new electric car registrations in Germany (-36,8%)¹ and Norway (-3,5%)² in July. As new car production ramps up and more EVs enter the market, the rapid pace of innovation has led to depreciation concerns. Potential buyers, especially dealerships, are wary of investing in vehicles that may lose value quickly as newer models with advanced technology become available.

Additionally, the uncertain resale value of EVs, largely due to concerns over battery longevity and replacement costs, has further dampened enthusiasm. This uncertainty is compounded by fluctuating energy prices and varying levels of charging infrastructure across regions, making it difficult for dealers to predict future demand and market trends.

Lack of Demand and Price Pressures in the Used Electric Vehicle Sales Model

In the B2B market, the lack of demand is particularly pronounced. Dealerships are hesitant to stock large numbers of EVs due to uncertainties around resale values and the long-term viability of certain models. This caution has led to a surplus of new vehicles and, consequently, falling prices in the used car market, as can be seen in the YoY change of the average price of used electric cars  in Germany (-12,8%)³ in July.

Tackling the Challenges: CarOnSale's Innovative Approach to EV Sales Solutions

At CarOnSale, we recognize these industry challenges and are committed to addressing them through a combination of technological innovation, strategic cross-country operations, and best-in-class fulfillment services. Our approach is designed to create trust and transparency for dealers, leveraging our expertise to drive growth in the EV sector.

Technological Innovation: Building Trust in the Digital Marketplace for EVs

The lack of standardized information about vehicle conditions, especially battery health, adds another layer of complexity, making it difficult for buyers to make informed decisions.  We use cutting-edge battery diagnostics to provide detailed insights into the health and performance of EV batteries, offering a level of transparency that is critical for building trust among B2B buyers. This technology allows us to offer thorough inspections, helping dealers make informed decisions and reducing the risks associated with purchasing used EVs.

Furthermore, we leverage a sophisticated market pricing algorithm that uses real-time data and advanced analytics to determine the most accurate and competitive prices for electric vehicles. This algorithm factors in a wide range of variables, including current market trends, regional demand fluctuations, vehicle condition, and historical sales data. To further enhance trust, CarOnSale offers a Guaranteed Price. This ensures that sellers receive a minimum price for their vehicle, regardless of market volatility. By combining our market pricing algorithm with this guarantee, we minimize financial risks and create a more secure transaction environment for our customers, reinforcing our commitment to providing the best possible experience in the EV market.

Cross-Country Footprint: Leveraging EV Market Dynamics in Europe

CarOnSale's strategic presence across multiple European markets allows us to capitalize on price arbitrage opportunities, particularly between Germany and the Nordic countries. The demand for electric vehicles varies significantly across regions, and our established operations in the Nordics and the Netherlands enable us to match supply with demand effectively. By sourcing vehicles in regions with higher availability and directing them to markets with stronger demand, we can optimize pricing and ensure a steady flow of transactions.

Best-in-Class Fulfillment for Streamlined EV Transactions

In addition to our technological and operational strategies, CarOnSale is committed to providing best-in-class fulfilment services specifically tailored for electric vehicles. Our team of over 50 trained vehicle inspectors is proficient in assessing the unique aspects of EVs, ensuring that every vehicle meets our rigorous quality standards. This attention to detail is crucial for maintaining the integrity of our marketplace and fostering confidence among buyers.

Unrivaled sales and customer base

CarOnSale's market leadership is underlined by our impressive sales figures and extensive customer base. With the recent acquisition of AlphaOnline, the leading software provider for used car process management in Germany, we serve a huge network of 2,500 licensed dealer roofs and five OEM customers. In 2024, we will sell around 100,000 cars, our platform has 40,000 active users and records over one million used cars annually, consolidating our dominance in the German dealer segment. Around 50% of the 100 largest car dealership groups are our customers.

Conclusion: Growth Potential in EV Industry

The used car market typically lags the new car market by 3-5 years. Given the recent years of low EV production, the availability of used electric vehicles in significant volumes will be delayed. It is expected to take approximately 10 more years before substantial volumes of used EVs become available for auctions. While the electric vehicle market is currently facing a host of challenges, CarOnSale is doubling down on its commitment to EVs. By addressing industry struggles through technological innovation, leveraging our cross-country footprint to optimize market opportunities, and providing best-in-class fulfillment services, we are not only navigating the complexities of the EV market but also setting the stage for sustained growth and leadership in green mobility solutions.

We are doubling down on our successful EV strategy because we believe in the potential of this market and are dedicated to driving its success. Nevertheless, at any given moment, we were aware that change takes time and that combustion engines will be the most relevant segment in the used car auction market for the near future. CarOnSale is greatly positioned to serve both segments.

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Sources:

¹Germany KBA July 2024: https://www.kba.de/DE/Statistik/Fahrzeuge/Neuzulassungen/MonatlicheNeuzulassungen/monatl_neuzulassungen_node.html

² Norway OFV July 2024: https://ofv.no/bilsalget/bilsalget-i-juli-2024

Autoscout AGPI July 2024: https://www.autoscout24.de/cms-content-assets/7b5sRC5ODJy3mLPOcrWwAY-0ab40f1ef308d616a4e62b1233d80d27-Grafik_AGPI_Juli_2024.pdf