Customers who may have delayed their plans to buy Tesla electric vehicles until prices drop may no longer need to wait now. New and used Tesla EV prices have decreased faster than other automakers, as per Top Speed.
Meanwhile, Tesla owners who expected to sell their used EVs at a profit like before would be unable to do so with these recent announcements.
“You can’t sell your current Tesla for more money than you paid for it, which was true for a lot of the past two years. That would reduce demand for new Teslas.”
iSeeCars.com’s Executive Analyst Karl Brauer
US EV demands in 2022
Tesla enjoyed a very profitable market in the US in early 2022 as fuel costs rose due to the Russian-Ukraine war. Many people were encouraged to switch to EVs, particularly Tesla cars, to avoid spending on expensive fuel.
Tesla took advantage of the rising demand by raising prices more quickly than other automakers, which led to higher profit margins.
However, Tesla might not enjoy the same high when it started the year due to many challenges, including global supply chain and demand issues. Some claim that CEO Elon Musk‘s Twitter occupation may have also affected these price reductions.
The decline in Tesla’s used EV prices
In hindsight, used Tesla EVs cost $55,754 on average in November. That amount indicates a 17% decline from July’s peak of $67,297.
Notably, the Tesla EV price drops are substantially higher compared to the entire used car market’s 4% decline in the same period, as per Edmund’s data.
Furthermore, used Teslas stayed in dealer inventory for an average of 50 days, as opposed to 38 days for all used cars in November.
What could be the reason for the price drop in Tesla EVs?
According to Reuters, factors contributing to Tesla’s plummeting prices include increased production, lower gas prices, competition from other brands, and high-interest rates. All these caused Tesla prices to decline substantially faster than the market, leading to further price reductions on new Tesla vehicles.
Furthermore, the value of Tesla’s market shares has decreased by 65% so far in 2022.
It is also worth noting that the automaker has recently offered a $7,500 discount on select Tesla models, which caused its stock to decline further. It has also provided 10,000 miles of free supercharging for vehicles delivered in December 2022.
Nonetheless, it is also possible that Tesla EV prices just declined in response to the current economy and overall market. As other automakers release their own EVs, interest rates rise, etc., there is a decline in demand. Perhaps more than any other automaker, Tesla is suffering the impacts.
