Tesla buyers who waited for months to get their new Tesla vehicle are seeing two options. It was either to use the Tesla vehicle or else sell it at a profit to some other Tesla buyer with less patience. However, these options may not be there once there are price cuts for the vehicles. Tesla is already offering a discounted price for its vehicles in the US.
Prices of used Teslas are falling faster than those of other carmakers and the clean-energy status symbols are languishing in dealers for lots longer. The average price for a used Tesla in November was $55,754, down 17% from a July peak of $67,297. The overall used car market posted a 4% drop during that period, according to Edmunds data. The used Teslas were in dealer inventory for 50 days on average in November, compared with 38 days for all used cars.
Rising gasoline prices, an effect of the Ukraine war, boosted demand for Teslas, one of the few long-range electric vehicles in the market. Tesla itself raised prices faster than prices for other cars, building its profit margins. And buyers of some new Teslas took advantage of the booming market to sell their relatively new cars for a profit, then order new ones, driving demand for Tesla’s new cars.
Now fuel prices are easing, interest rates are rising, Tesla output is increasing, and EV competition is growing, leading used Tesla prices to fall faster than the market, and creating a cascading effect on prices of new Teslas. Tesla last week doubled a U.S. new-car price cut to $7,500 for Model Ys and Model 3s delivered this year, adding to investor jitters about softening demand.
Nearly a third of used Teslas for sale in August was 2022 models up for resale, a sign that original buyers were aiming to flip, analysts said. That compares with about 5% of other brands on the used market, research firm Edmunds said. “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,” said Karl Brauer, executive analyst at car sales website iSeeCars.com. “That would reduce demand for new Teslas.”
On Thursday Musk said that the “radical interest rate changes” have increased the prices of all cars, new and used and that Tesla potentially could lower pricing to sustain volume growth, which would result in lower profit. EVs such as the Ford F-150 Lightning and the Hyundai Ioniq 5 are coming to market with a lot of buzzes, said Liz Najman, content marketing manager at EV researcher Recurrent.