Industry Voices: How Can Used BEV Buyers Check Out What They Are Getting?

TU-Editor

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10th February 2023

Opinion piece by Jim O’Brien, General Manager, North America, Ravin.ai

Electric vehicles don’t have spark plugs, fuel pumps, gaskets, pistons, or exhaust systems – some of the many components someone buying an internal combustion engine (ICE) car would want to check before purchase or when preparing a vehicle to pass inspection (in US states that require it). So buying a used Battery Electric Vehicle (BEV) should be a lot easier than buying a used ICE car, right? Not necessarily; just because BEVs have fewer moving parts, and fewer things that can go wrong, they still need to be checked, both for safety and performance. While many states do not require such inspections, savvy shoppers will want a comprehensive BEV inspection before purchase. Who can, or should, do that BEV inspection; the state, a dealer, or even the manufacturer?

Like it or not, electric vehicles are eventually going to replace ICE vehicles, unless legislatures and parliaments from California to New York to Europe and many places in between change their minds. BEVs accounted for less than 6% of all vehicles sold in the US in 2022 but that was nearly double the number sold in 2021. In some markets like the California luxury market, BEVs amount to nearly half of all sales. As we move closer to the legislative deadlines for ending ICE sales in the coming years, expect BEV sales to skyrocket As the electric market expands with new models, expect the used BEV market to grow as well. For interested BEV buyers, there’s good news: BEVs depreciate faster than ICEs, which means that used vehicle buyers can sometimes get an older model BEV for less money than a similar used ICE vehicle would have cost them.

There’s a reason for that; BEV technology is constantly evolving and older models often won’t have the range or battery life of newer vehicles. In addition, they have other components that can deteriorate over time, like brakes, tires, charging connections, transistors and chips, and more. Thus, an inspection before purchase is an absolute necessity, with a full report including battery health, whether connections/chips need to be replaced/upgraded, total range of the battery and whether the battery can be upgraded for longer range travel. In many cases the factory warranty on the battery is much longer than other vehicle components.

The question for many prospective buyers, and sellers, is how these inspections will be carried out. BEV inspections require different equipment than ICE inspections: who currently has access to such equipment, along with data on the current and ideal metrics of a used BEV? If a buyer is purchasing the BEV from a private owner, they will want to bring it to an inspection center to have it checked out. Most dealers that sell used BEVs don’t specialize in them, at least for now, and they themselves will likely be looking for solutions as well. Also state inspection centers are very unlikely to have the equipment or knowhow to carry out these kinds of inspections.

One solution would be for automakers to open up inspection centers, where buyers could have their potential purchase evaluated by the people who have the necessary knowhow and equipment. However, that’s not very realistic; we don’t expect China’s BYD or even the US’s Tesla to open such centers in cities around the country. Yet, they don’t have to because BEVs are essentially “digital vehicles”, like computers on wheels, and carmakers have the ability to collect reams of data on a vehicle’s performance.

Using data collection tools, high-resolution images and big data gathered on general vehicle performance, a manufacturer could quickly assess the condition of a vehicle’s battery, range, performance or any other issue a potential buyer would be interested in. That inspection could be conducted physically at a dealer vehicle service center, with the center basically uploading all the data and images to the automaker’s data center, or even by the seller and buyer themselves, using an app provided by the manufacturer, along with some basic equipment, like an advanced OBD or specialized BEV inspection device. Also with advanced AI, the carmaker’s system would be able to provide an accurate picture of what a buyer could expect, perhaps, even offering them a limited warranty for performance or battery life based on the inspection itself, giving the manufacturer an opportunity to make money off the resale of the vehicle.

If automakers aren’t interested in doing this, of course, someone else will step in. Unlike direct manufacturer sales agents, used BEV dealers will likely be selling a wide range of vehicles and, by working with advanced data companies, they could develop their own BEV inspection systems, charging potential buyers for those advanced services. This system could even be implemented by the data companies themselves; AI experts that can evaluate data and high-resolution images could provide answers, and even limited warranties, to potential buyers.

Right now, buying a used BEV is a bit risky (unless purchasing from a certified pre-owned program) largely because potential buyers aren’t really sure of what to check out, much less how to do it. As a result, there’s strong resistance among many consumers to take a used BEV leap but, as time moves forward, there is going to be a great deal of demand for reliable used BEV inspection systems. Big data, AI and high-resolution imagery are all available right now, ready to be deployed to build those systems. Also the groups that move ahead with those systems, whether manufacturers, dealers, or even private data companies, will find plenty of demand.