Tesla Used Vehicle Prices Plummet Amid Surge in Sellers

As the broader used car market begins to recover, Tesla’s used vehicle prices continue to plummet, driven by a surge in owners eager to sell.

This influx of sellers has created an oversupply that is wreaking havoc on the used Tesla market.

While average used car prices in the U.S. have seen a modest increase of 2.17% over the last month, Tesla’s used vehicle prices have fallen by 1.34%, prompting concerns among dealers who are now hesitant to purchase these cars.

Defaulting Buyers Leave Dealers Concerned Over Tesla Inventory

The source of this rapid decline in Tesla’s value can be traced back to the brand’s association with CEO Elon Musk, whose increasingly divisive political opinions have begun eroding the brand’s appeal.

Many current Tesla owners are distancing themselves from this association, contributing to the high demand for selling their vehicles. Reports from local dealerships in Quebec highlight a stark reality where used Teslas are being sold for as low as half their previous value, with some dealers expressing pessimism about their ability to resell inventory quickly enough to avoid additional depreciation.

Adding to the woes of Tesla owners, dealers have reported a rise in defaults on car payments, suggesting that many buyers who financed their vehicles during the pandemic are now struggling to keep up with their obligations. Éric Piuze, a Montreal dealership owner, lamented that buyers once remortgaged their homes to purchase Teslas, but the financial landscape has shifted dramatically since then.

Despite the turmoil, there is a silver lining: most of those offloading their Teslas are opting for other electric vehicles (EVs), contributing to the overall growth of the EV market. However, potential buyers should be cautious, as the depreciating values of used Teslas indicate that these vehicles may lose value rapidly, making them a risky investment in the current market climate.