Key Takeaways
- Used electric vehicles (EVs) priced under $35,000 now constitute a quarter of all second-hand EV sales in Australia, doubling their market share from a year ago.
- Almost half of these affordable used EVs are dealer demonstrator vehicles, often with minimal kilometres and significant portions of their original warranty intact.
- The overall used EV market has expanded by approximately 75% over the past year, with the under-$35,000 segment experiencing even faster growth.
- Rising petrol prices have shown a direct correlation with increased sales of more affordable used EVs.
- Tesla models demonstrate stronger price retention compared to other EV brands, which are experiencing faster depreciation rates than the general used car market.
Australia’s used electric vehicle (EV) market is undergoing a transformative shift, with affordable options now commanding a significant and rapidly expanding share. A comprehensive new analysis reveals that cars priced under $35,000 have doubled their market presence in just one year, now accounting for a quarter of all used EV sales.
This surge is largely fuelled by the growing availability of dealer demonstrator vehicles, which represent nearly half of these budget-friendly sales. These ‘demo’ models typically boast only a few hundred kilometres on the odometer, offering a near-new experience at a discounted price point.
The Rise of Affordable Used EVs in Australia
Data released earlier this month by Carma, an Australian digital platform and used car dealership, highlights a pivotal moment for electric vehicle accessibility. In September, 1,288 used EVs were sold for under $35,000, making up 26 per cent of all EV sales during that month.
This figure marks a substantial increase from just 13 per cent recorded a year prior, demonstrating a clear acceleration in consumer interest and market supply for more budget-conscious EV options.
Doubling Market Share in Just One Year
The latest Used Car Market Report: Spring Snapshot, October 2026, compiled by Carma using proprietary and public third-party data, underscores this trend. While the overall used EV market expanded by approximately three-quarters over the last year, the segment priced below $35,000 grew at an even more accelerated pace.
This signifies a maturing market where electric vehicles are becoming increasingly attainable for a broader segment of the Australian population, moving beyond early adopters to more mainstream buyers seeking cost-effective sustainable transport.
The Dealer Demonstrator Phenomenon
A key driver behind the proliferation of affordable used EVs is the significant increase in dealer demonstrator vehicles entering the second-hand market. Carma’s report indicates that almost half of the EVs sold for under $35,000 in September were dealer demos, totalling 580 units out of the 1,288 sales.
This represents a dramatic leap from the previous year, when only 50 dealer demonstrators were sold within the under-$35,000 category from a total of 355 such EVs. The influx of these low-kilometre vehicles is rapidly expanding supply in the affordable segment.
Unpacking the Appeal of Dealer Demos
Dealer demonstrator EVs present an attractive proposition for buyers. These vehicles have typically only travelled a few hundred kilometres, meaning they are in excellent condition and often still possess the vast majority of their new-car warranty. Furthermore, they are sold at a notable discount compared to their brand-new counterparts.
In September, nearly 300 of the 580 dealer demos sold were MG4 models, with over 100 being Geely EX2 demos. This concentration highlights how specific models are contributing significantly to the expansion of accessible EV options in the used market. Even when considering only EVs sold by private owners, the share of cheaper EVs has still seen an increase, rising from 27 per cent to 33 per cent.
Broader Market Trends and Growth Drivers
The overall expansion of the used electric vehicle market in Australia reflects a growing consumer appetite for sustainable transport solutions. As new EV models become more prevalent and the initial wave of sales filters into the second-hand market, the availability of diverse options continues to grow.
This expansion is not just about volume; it’s also about increasing affordability, which is crucial for widespread EV adoption. The market dynamics suggest a positive trajectory for electric mobility, indicating a move towards greater accessibility across various price points.
Impact of Fuel Costs on EV Demand
Economic factors, particularly fluctuations in petrol prices, play a discernible role in influencing demand for more affordable EVs. Carma’s analysis observed that sales of budget-friendly electric vehicles tend to accelerate when fuel costs rise.
A notable example occurred in March of this year when unleaded petrol prices climbed to approximately $2.50 per litre. During that period, sales of affordable EVs surged, doubling the volume recorded in the preceding month. This demonstrates a clear consumer response to rising operating costs of internal combustion engine vehicles, prompting a faster transition to electric alternatives.
Divergent Depreciation Trends: Tesla vs. Other Brands
While the used electric vehicle market is growing, it exhibits varied depreciation patterns among different brands. The report indicates that second-hand EVs generally experience faster price depreciation compared to the overall used car market. However, Tesla models stand out by demonstrating stronger price retention.
In September, a used EV from a brand other than Tesla was valued at 9.8 per cent less than it was a year prior, translating to an average drop of around $3,900 on a typical car. In contrast, used-car prices across all segments fell by 6.5 per cent over the same period.
Understanding EV Resale Value
The differential in depreciation rates is stark when comparing Tesla with other EV manufacturers. Over the same period, Teslas saw their prices fall by only 4 per cent, representing a drop of approximately $1,600 on a typical $39,900 car.
Carma provided a clear perspective on this trend: “To put that in perspective, for every $1,000 your EV was worth last September,” explained Carma, “a Tesla lost about $40 in value over the year, compared with $98 for an EV from another brand.” This insight is crucial for potential buyers and sellers, highlighting the varying financial implications of different EV brands in the second-hand market.
What These Trends Mean for Australian Consumers
The evolving landscape of the Australian used electric vehicle market presents both opportunities and considerations for consumers. The significant increase in the availability of affordable used EVs, particularly dealer demonstrators, means that transitioning to electric mobility is becoming more financially viable for many.
Buyers looking for value can find nearly new vehicles with low mileage and remaining warranties at competitive prices. However, understanding the depreciation trends across different brands is essential for making informed purchasing decisions and assessing long-term ownership costs.
As the market continues to mature and new models enter the ecosystem, the supply of second-hand EVs is expected to diversify further, offering even more choice to Australians considering an electric future. The correlation between petrol prices and EV sales also signals that external economic factors will continue to shape consumer behaviour and market growth.
FAQ Section
What is driving the growth of the under-$35,000 used EV market?
The growth is primarily driven by an increased supply of more affordable new EV models entering the market, which then filter into the used segment. A significant factor is also the surging availability of dealer demonstrator vehicles, offering near-new condition EVs at competitive prices.
What are ‘dealer demonstrator’ EVs and why are they popular?
Dealer demonstrator EVs are vehicles used by dealerships for test drives and display purposes. They are popular because they typically have very low mileage, are sold at a discount to new-car prices, and usually retain most of their original manufacturer’s warranty, offering excellent value for money.
How much has the overall used EV market grown in Australia?
According to Carma’s latest report, the overall used electric vehicle market in Australia has grown by approximately three-quarters over the past year. This significant expansion indicates a strong and accelerating adoption rate for electric cars across various price points.
Do rising petrol prices affect used EV sales?
Yes, the analysis shows a direct correlation. When petrol prices increase, such as when unleaded fuel reached around $2.50 per litre in March, the sales of more affordable used EVs tend to accelerate, indicating that fuel cost savings are a significant motivator for buyers.
How do Tesla’s used prices compare to other EV brands?
Tesla models generally hold their value better than other electric vehicle brands in the used market. While other used EVs saw prices fall by nearly 10% in a year, Teslas depreciated by only about 4% over the same period, signifying stronger price retention.
What implications do these trends have for consumers looking to buy an EV?
These trends mean that electric vehicles are becoming more accessible and affordable in the used market. Consumers have more options, especially with dealer demos, but should also consider brand-specific depreciation rates to understand the long-term value and ownership costs of their chosen EV.