Tesla’s Used Car Value Faces Decline Amidst Owner Sell-Off
As Tesla continues to navigate turbulent times, the resale value of its vehicles is experiencing a significant downturn. This trend is largely fueled by a wave of owners choosing to part with their cars, driven by growing discontent surrounding Elon Musk’s controversial involvement in various political and economic issues.
The average price for a used Tesla saw a noteworthy decline of over 10% in March compared to the previous year, according to data provided by the used car listing platform, iSeeCars. This drop represents the steepest depreciation across all car brands tracked by the site.
Specifically, the value of pre-owned Model S and Model Y vehicles fell by 17.2% and 13.1% respectively year-over-year. Meanwhile, the average price for a Model 3 has dropped to just over $26,000. These figures stand out even more as the general trend for used car prices saw a slight increase for the first time in two and a half years, as noted by iSeeCars.
This decline in resale value aligns with an increase in the number of Tesla owners opting to sell, amidst rising global protests against CEO Elon Musk. Autotrader, a used car platform, reported a record number of Tesla listings in March, corroborated by data from its parent company, Cox Automotive. Additionally, reports from Edmunds, as cited by Reuters, indicate a significant spike in Tesla trade-ins.
Musk’s past actions, such as cutting federal spending during the Trump administration, have attracted criticism, turning Tesla vehicles and showrooms into targets for protests and vandalism. This has led to alienation among some segments of Tesla’s customer base, particularly those with liberal leanings.
Former Tesla owners have shared with Business Insider that their decision to sell was influenced by Musk’s federal workforce reductions and incidents of vandalism targeting Tesla vehicles.
For potential buyers, the declining prices might present an attractive opportunity to purchase a pre-owned electric vehicle at a reduced rate. However, this trend is less favorable for long-time Tesla owners looking to sell their cars at a reasonable price. Tesla investor Ross Gerber previously mentioned to Business Insider that he struggled to sell his old Tesla at a fair price, a challenge likely faced by many current sellers.
The drop in used car values is occurring in tandem with Tesla’s challenges in new car sales. The company recently reported disappointing first-quarter delivery numbers, with a notable decrease in sales across European and Chinese markets. This situation has been described as a “brand crisis tornado” by analysts, compounded by Musk’s political activities and increasing competition from other electric vehicle manufacturers.
