Used Tesla Car Prices Dropping Drastically In Comparison To Rivals
The days of buying new Teslas and flipping them for profit might be over as new data shows that used Tesla prices in the US drop faster compared to models from other automakers.
The price of a used Tesla has plunged 17% in the past five months — from a peak of $67,297 in July to $55,754 in November, according to reports. During that same period, the overall price of used cars dropped by 4%.
That’s a far cry from Tesla’s revved-up sales during the pandemic when demand led buyers to pay more for a used EV rather than wait for months on the waitlist for a new one.
Nearly a third of used Teslas for sale in August was 2022 models up for resale, a sign that original buyers were aiming to flip, analysts said. That compares with about 5% of other brands on the used market, according to research firm Edmunds.
All that combined led to reduced Tesla demand, which helps explains the company’s decision to drop the price tag by $7,500 for the Model 3 and Model Y for customers who take delivery before 2023. At present, Tesla owners can’t sell their cars for more than what they originally paid – and they’re not alone. Used car prices, in general, are dropping rapidly, causing what some analysts describe as a “used car recession.”
Tesla shares fell 7.3% to a more than two-year low of $114.12 in early trading on Tuesday. They are down more than 65% this year. The massive decline in Tesla shares comes as Musk appears increasingly distracted by his acquisition of Twitter. In recent days, analysts from Oppenheimer, Daiwa Capital Markets, and Evercore ISI have all slashed their Tesla price targets.
“At the same time that Tesla is cutting prices and inventory is starting to build globally in face of a likely global recession, Musk is viewed as “asleep at the wheel” from a leadership perspective for Tesla at the time investors need a CEO to navigate this Category 5 storm,” Ives said.