Used electric vehicle prices continue to drop, consistent with the trend in the overall car market. Interestingly, Tesla’s popular electric vehicles Model Y and 3 reported a faster value drop compared to the industry average and its closest rivals.
Average transaction price of new vehicles in the US – January 2024
As per Kelley Blue Book‘s data, the average transaction price of new vehicles in the US market dropped 2.6% month-on-month and 3.5% year-on-year to $47,401 in January 2024.
The price decline is apparently even more for new electric vehicles, which dropped 10.8% YoY to $55,353.
This significant drop in the average transaction price of new vehicles, including both ICE-powered and EVs, influences the prices in the used electric vehicle market.
Tesla EVs’ value continues to drop
The used EV segment has emerged as a rapidly growing market due to the increasing number of models arriving at the dealer lots. Recurrent lead researcher Liz Najman asserted that used EV prices have dropped 24% YoY “with Teslas losing the most value in that period.”
“Looking at just the past few months, Tesla values are still dropping faster than industry average and faster than many of their competitors, such as Ford, Nissan, Chevy, and VW.”
Liz Najman, Recurrent lead researcher (via Forbes)
True enough, Tesla’s used car website currently sells the Model Y below $30,000. Hertz is selling the electric crossover at an even lower price of just under $20,000.
For reference, here are the top YoY declines in the used EV market per brand:
| Brand | YoY Decrease |
| Tesla | -32.09% |
| Jaguar | -31.73% |
| Kia | -30.35% |
| Audi | -30.17% |
| Nissan | -29.03% |
| Polestar | -27.44% |
| Brand | MoM Decrease |
| Kia | -7.25% |
| Hyundai | -4.96% |
| Fisker | -4.45% |
| Tesla | -4.12% |
| Jaguar | -3.27% |
| Ford | -3.21% |
Are price drops finally stabilizing?
Recurrent lead researcher Liz Najman explained that used EV prices are finally leveling off.
The average price decline across all electric automakers in the January-February 2024 period dropped to 2.5%, a notable improvement from December- January’s 2.9% record.
Prospective buyers can also benefit from a tax credit equal to 30% of the sale price of the eligible models. According to the IRS, customers buying from a $25,000 (or less) EV or FCEV from a licensed dealer can receive up to $4,000 maximum credit. For example, a $20,000 Tesla Model 3 is currently being sold by Hertz for about $16,000.
