The Used EV Market In Denmark Is Booming

Energy
Friday, August 26th, 2022 4:50 am EDT

Reading the latest issue of Motor, the Danish Motorist Associations (FDM) magazine, I was stunned by how crazy the market for used electric cars has evolved in Denmark recently. It’s a classic catch-up effect development when a market gets disrupted by a new technology. In this case EVs, and in particular EVs with enough range and charging rates to make people forget about the range anxieties of the good old days with the 1st generation Nissan Leaf and BMW i3. I’ve been there, and know exactly how difficult everyday life could be as an EV pioneer, and I remember touting that the 60 kWh battery capacity threshold was what would do the trick. And here we are.

First, to see the following in context you need to know that Denmark has a population of 6 million. So, here’s a few numbers that FDM has brought forth regarding battery-electric vehicles, no hybrids included:

  • In the first half of 2022, 12,000 new EVs were sold, and 18,000 used EVs were sold.
  • Some dealers are experiencing increases from 2 to 3% EV sales in 2020 to 40% EV sales in 2022.
  • In the first half of 2022, only 350 new Tesla Model 3s were sold, in contrast to 4,500 used, of which 3,000 were imported.
  • A total of 20,000 vehicles were imported in the first half of 2022, of which half were EVs.
  • The total used EV market has tripled in 2022 compared to the same period in 2021.

Why is the EV market so skewed toward used cars in Denmark? I believe it’s the perfect storm of 3 factors:

  1. Denmark is such a small market that even subtle changes in the European market will be amplified in the Danish market.
  2. In Germany (14x the Danish population), it is legal to export an EV after only 6 months, even with a profit, because it was heavily incentivized upon purchased as new, still making most models much cheaper than equivalent used domestic models.
  3. The hype around EVs has gone mainstream, and Danes are known to be a bit stingy and not afraid to do a bit of arithmetic, quickly realizing that money can be saved in the long run switching to an EV.

In a world of much too low EV production capacity, the demand in a small country like Denmark will sooner be saturated with all the used EV leftovers in Europe, and this will likely mean that the transition will happen much faster than anticipated. But what about the ICE vehicle leftovers, you ask? Well, Danes are also known for keeping their cars for a very long time, so to sell them cheap, scrap them, or just keep them is not a problem, and the more premium models are traditionally in high demand in eastern Europe, for now.

I would not be surprised if the transition to an EV-dominated fleet in Denmark will happen in an even shorter time-span than it did in Norway. Norway lead the way in incentivizing demand in a world of very low supply, so manufacturers would purposely channel huge numbers of EVs directly there. Now that Norway is almost saturated in EV sales, Denmark is ready to pick up the leftovers from an ever increasing global EV production.

I witnessed the personal computer enter our homes in the 1980s and 1990s, and the cell phone get into almost every pocket from 1992 to 2008, at which point the smartphone eradicated the cell phone in a few short years, and now the shift from ICE to EV will probably happen even faster, despite the fact that the product in question is much more expensive and harder to manufacture. I really don’t know how to relate to this change, as it’s happening so fast it astounds me.

It seems inevitable that the bottleneck will be access to raw materials, mainly for battery production obviously. I wonder how this will affect the battery size in the average EV model? It seems to me that the 70 – 80 kWh models are in high demand right now, but maybe the striving for longer range will have to be capped in order to make a higher quantity in supply possible. Quicker and more abundant charging is a key factor. So maybe the 60 kWh capacity threshold I have pondered for years will be the sweet spot for the foreseeable future?

Here are the latest wait times for popular new EVs:

Aiways U5 Premium: 4 months
Audi Q4 Sportback 40 e-tron: 12 – 18 months
Hyundai Ioniq 5 Advanced RWD LR: 9 – 12 months
Kia EV6 RWD LR Upgrade: 18 months
Maxus Euniq 6: 4 months
Mercedes EQA 250: 6 – 9 months
MG Marvel R Luxury: 6 – 12 months
Nissan Ariya 63 kWh Evolve: 4 – 5 months
Volvo XC40 Recharge P6 FWD Plus: 10 months
VW ID.5 Pro Performance: 4 months
Tesla Model 3 LR: 5 – 7 months
Tesla Model Y LR: 4 – 6 months

No wonder used EVs are in high demand…

The very first EV in my day-to-day, the 2015 Nissan Leaf 24 kWh. Lovely car, range too short…

 

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