Teslas have generally held their value better than other electric cars, but used Tesla prices are now dropping fast, according to a recent Reuters report.
The average price of a used Tesla in November 2022 was $55,754, down 17% from a July peak of $67,297, according to the report. In comparison, overall average used car prices dropped 4% during the same period, the report noted.
Turning to another important metric, the average amount of time used Teslas had spent on dealer lots in November 2022 was 50 days, much higher than the overall average of 38 days for used cars, according to the report.
2020 Tesla Model X
Reuters sees a Tesla bubble that has burst. Rising gas prices brought on by Russia’s invasion of Ukraine, along with price hikes on new Teslas, drove up used Tesla prices earlier this year, according to the report. It noted that nearly a third of used Teslas up for sale in August 2022 were resales, compared to an industry average of 5%, indicating many owners were flipping newly purchased cars and driving up used-car values.
A decrease in gas prices and Tesla’s recent price cuts on new cars have reversed those trends. In recent weeks, Tesla offered a $3,750 discount on the Model 3 and Model Y, and then doubled that discount to $7,500. That happens to be the maximum amount of the federal EV tax credit, which returns in revised form this year, with some Tesla vehicles likely eligible for that full amount through March.
The rise and fall of used Tesla prices also reflects changes in the overall used EV market. A range of recent used-car sales reports have identified that used EV prices had peaked sometime between July and September.
High average EV prices—for new or used cars—aren’t sustainable, auto industry executives believe. For instance, Stellantis executive has warned of a market collapse if EVs don’t get cheaper, and Ford’s CEO Jim Farley sees an EV price war in the near future. That hasn’t stopped Ford from raising the price of an F-150 Lightning by 40% versus a year earlier.
