The rise and fall of used and new car prices often go hand in hand, and this was especially true for Tesla over the past two years. As the company reduced prices on its new vehicles, the values of used Teslas plummeted. Recently released data from CarGurus reveals that prices for Tesla’s electric vehicles (EVs) have experienced a substantial decline across the board since last year.
Of all the Tesla models, the largest drop in used pricing occurred with the Tesla Model S, which saw a decrease of 34.4 percent between 2023 and 2024. The other models also experienced significant declines, with the Tesla Roadster falling by 27.3 percent, the Tesla Model 3 by 31.5 percent, the Tesla Model X by 32.4 percent, and the Tesla Model Y by 34.1 percent.
These figures undoubtedly sting for Tesla owners whose used cars have already experienced a decline in value over the past year. While this trend reflects challenges in the used market, it is also linked to Tesla’s ongoing price adjustments. For example, the Model Y recently dropped below $30,000 as its starting price. The continuous price changes may deter buyers from investing in a used EV when they have concerns about battery longevity and charging. However, it is worth noting that Tesla’s warranty provides significant coverage in these areas.
It’s tempting to single out Tesla, but it’s important to acknowledge that other automakers are also experiencing declining used values. In fact, Recurrent conducted a recent study revealing that popular used EV prices have fallen by 27 percent in the past year, bringing them closer to the prices of comparable gas vehicles. This decline could actually help boost demand for used EVs, which is expected to slow down the rate of price decreases. Recurrent predicts that prices should stabilize by the end of the second quarter of 2024.
For those interested in purchasing an EV, considering a used model could be a fantastic opportunity. Research indicates that battery replacements are not as common as some detractors may suggest, and the price drops make used EVs a more appealing option. Furthermore, many used EVs are eligible for EV tax credits that are applied at the time of sale, making them even more affordable.
In conclusion, Tesla’s used car prices have experienced significant declines, mirroring the company’s adjustments to new car prices. However, this trend is not exclusive to Tesla as other automakers are also facing falling used values. Despite the drop in prices, purchasing a used EV can provide an excellent value proposition, especially considering the availability of EV tax credits and the relative rarity of needing battery replacements. With the continued growth of the EV market, it will be fascinating to observe how used car prices evolve in the coming years.