Would You Buy a Used EV … from Anybody?

• Despite the media attention on the slowing growth of the EV market, many remain bullish on EV sales, both in the new and used segments.

• Many dealers that understand EVs and the EV market have shown an interest in buying wholesale electric vehicles from dealerships that don’t.

• One online company, Plug, was founded to serve as a go-between for automakers with off-lease EVs, fleet operators, rental companies, and auto dealers that are not used to selling used EV trade-ins.

Perhaps the very first rule in the auto dealers’ playbook, now some 125 years old, is that car salespeople must appear optimistic about the economy and continuing high demand for their products no matter the reality. It’s always a good time to buy a new or used car or truck!

Late last year, as analysts and media were overplaying a softening market for electric vehicles, Jimmy Douglas founded Plug, an online company based in Culver City, California, that serves as a go-between for automakers with off-lease EVs, fleet operators, rental companies, and auto dealers that are not used to selling used EV trade-ins.

Plug runs data on wholesale EVs to determine remaining battery life, as well as data on other key technical functions, such as software-enhanced features, autonomy, and assisted driving systems and computer hardware.

“We rejected a car once, for a dead 12-volt battery,” Douglas said. The car was stored for too long at an auction facility, “and nobody had recharged it. If you let your battery pack go down and die, your 12-volt battery gets trashed.”

Plug has never encountered an EV with a faulty high-voltage battery pack, he said. Most of the information required to appraise an electric vehicle is captured through its application programming interface, though Plug also conducts a physical condition inspection using either human inspectors or with an artificial intelligence-assisted photographic process.

Douglas’ timing in launching this niche business might seem unfortunate, though he says there are plenty of dealers that understand EVs and the EV market and want to buy wholesale electrics from dealerships that don’t.

“The prices of used EVs have dramatically decreased over the last year,” Douglas said recently in a Zoom interview with auto journalists. “Making money and not losing money is a velocity game.”

“I think dealers are kind of gun shy in buying a used EV,” said Eric Frehsee, president of Tamaroff Group’s six Metro Detroit new car and truck dealerships. But Tamaroff falls in the “does understand” EVs dealerships. Frehsee says early EV adopters continue to trade in for new EVs. The burgeoning variety of plug-in hybrid models are going mostly to straight internal combustion engine-vehicle trade-ins.