Used Tesla Prices Plummet Amid Market Changes and Brand Challenges
In the latest edition of the Financial Times, Editor Roula Khalaf highlights the notable trend of declining prices for used Teslas in both the United States and the United Kingdom. This significant decrease is happening at a faster rate compared to other electric vehicles (EVs). Interestingly, this downturn seems to be primarily attributed to a surplus of previously leased vehicles entering the market, rather than any negative connotations associated with the brandâs high-profile CEO, Elon Musk.
Recent data from CarGurus, an online automotive marketplace, indicates that prices for second-hand Teslas in the United States saw a sharp drop of 7 percent year-on-year as of March. In contrast, other EV brands only experienced a modest decline of 1.5 percent during the same period. In the UK, the situation appears even more pronounced, with used Tesla prices plummeting by 15 percent, which is notably higher than the overall 10 percent decline seen in the used electric vehicle market there, as reported by sales platform Auto Trader.
This pricing trend coincides with concerns regarding the potential damage to Teslaâs brand image. Observers have noted that Musk's growing prominence as a figurehead for the American far-right, alongside his connections with former President Donald Trump, may be influencing consumer sentiment, especially considering that electric vehicles generally attract a more left-leaning voter base.
Moreover, a report from Edmunds, a prominent U.S. car shopping site, has shown a marked increase in the number of Teslas from the 2017 model year and later being traded in at dealerships. These vehicles accounted for 1.4 percent of all trade-ins by mid-March, a significant rise from just 0.4 percent during the same period last year.
Kevin Roberts, the director of economic and market intelligence at CarGurus, explains that the data from the U.S. indicates that the influx of former fleet vehicles is primarily responsible for the declining average list price of used Teslas. He further noted that recent price reductions on new Tesla models since the start of 2023 have also contributed to the downturn in the second-hand market.
In the UK, Auto Traderâs commercial director Ian Plummer elaborated that the falling prices of used Teslas are likely being driven by a surge of vehicles that were initially purchased new through financing. The number of used Teslas available on the platform in March reached 5,400, a stark increase from 2,900 just one year prior. Plummer pointed out that there is still a robust demand for these vehicles in the UK, as they are selling in an average of just 23 days compared to 29 days for other EVs listed on the platform.
Additionally, an analysis by the Financial Times of the used Tesla market in Germanyâa region where Musk notably intervened on behalf of the far-right Alternative for Germany party during the recent federal electionsâfound no significant changes in the availability of Teslas, their ages, or their asking prices during the first quarter of 2025.
Nevertheless, Tesla is certainly under considerable pressure. The companyâs new car sales have not only fallen short of market expectations but have also shown significant declines in various European markets. Official statistics reveal a staggering 55.2 percent drop in sales in Sweden, a 49.7 percent decrease in the Netherlands, a 41.1 percent reduction in France, and a 25.5 percent decline in Norway. This slump has contributed to Teslaâs worst quarterly performance since 2022, with the company delivering 336,681 vehicles in the first three months of this yearâ13 percent fewer than the same period a year earlier and significantly below the 390,000 vehicles that analysts had anticipated.
Ryan Brinkman, an auto analyst at JPMorgan, expressed concern over Teslaâs disappointing delivery figures, stating that they were âfar below even our low-end estimate,â which supports fears of unprecedented brand damage. âThe trend in Tesla sales is worse than we and the market had appreciated,â Brinkman remarked, leading to a revision of the firmâs projections downward.
On the contrary, Alexander Potter, a senior research analyst at Piper Sandler, offered a differing perspective, suggesting that the supposed brand damage may be overstated. While he acknowledged that Muskâs political affiliations could have a negative impact on sales, he emphasized that the more pressing issue lies with supply chain challenges, as âmulti-week shutdownsâ affected all four of the companyâs Model Y factories.
The future of Tesla may hinge on the anticipation and reception of the upcoming refresh of the Model Y, which is currently the companyâs best-selling vehicle. Analysts are hopeful that this refresh could invigorate an aging product lineup.
In addition to these internal challenges, Tesla is also facing fierce competition from international automakers. Analyst Harald Hendrikse noted that the American brand now contends with formidable rivals from China and other Asian markets, who are making significant inroads with a steady influx of new, high-tech, and competitively priced EVs.
This emerging competitive landscape was underscored in March when shares of Chinese EV manufacturer BYD reached a record high, following the companyâs announcement of a groundbreaking platform capable of charging electric vehicles as quickly as it takes to refuel a conventional gasoline car. In stark contrast, Teslaâs shares have plunged more than 40 percent this year, erasing gains made following the 2020 election.
Additional reporting for this article was provided by Zdravko Hvarlingov in Sofia.
