The price of used Teslas is dropping three times faster than other cars.
- As prices in the used-car market rise, the electric-vehicle (EV) market tightens, and EV tax credits proliferate, the price of new and used Teslas continues to drop.
- Tesla dropped the Manufacturer Suggested Retail Price of new cars in January, at the same time that used Tesla prices dropped by 4.8%. Tesla Model 3s already dropped 16.8% in value from September to December, says a report from iSeeCars.com.
- The overall direction of the used-car market could be clearer, but even as EV prices drop, Tesla appears to be taking a larger hit than other auto manufacturers like Ford.
Why It’s Important
As we previously reported, the used-car market is moving in a curious direction. Used-car information provider Manheim released its January value index on Wednesday, showing that prices have risen for two consecutive months.
iSeeCars.com says the trend is more optimistic. A January 17 report shows that car prices dropped considerably between November and December, decreasing used-car prices by 3%. The overall trend of the used car market remains to be seen, although it has improved significantly over the past few months from the heights of the supply chain crisis.
For Tesla, the trend is more notable. A new report from iSeeCars.com suggests that the price decrease in used Teslas is intensifying, alongside a momentary slowdown in EV purchases. This comes on the heels of Tesla’s 69.1% drop in valuation over 2022 as the company struggled to meet expansion targets, necessitating a new vision.
The CEO of car shopping app Pat Ryan contradicts this trend though, noting that tax credits incentivized a 33% increase in used EV sales last month, according to Money.com.
“Looking beyond Tesla, prices of alternative fuel vehicles dropped faster than traditional gasoline models in the past month, with plug-in hybrids leading the decline at 3.8%. Note that electric cars, with a 1.8% drop, are only slightly ahead of the industry average, further illustrating Tesla’s substantial drop in value versus the overall EV market,” notes the report.