The days of paying a premium for a used Tesla are seemingly in the rear-view mirror as demand for the pioneering electric vehicle plummets.
The price of a used Tesla has plunged 17% in the past five months — from a peak of $67,297 in July to $55,754 in November, according to a Reuters report. During that same period, the overall price of used cars dropped just 4%.
That’s a far cry from Tesla’s revved-up sales during the pandemic, when demand led buyers to pay more for a used EV rather than wait for months on the waitlist for a new one.
Nearly a third of used Teslas for sale in August were 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, according to research firm Edmunds.
“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.”
Used Teslas are staying on the lot longer than other used cars — 50 days compared with the 38-day average for most other makes — before being sold, Edmunds.com said.
With fuel prices easing, interest rates rising and EV competition growing, Tesla prices are falling faster than the market, and creating a cascading effect on prices of new Teslas.
Last week, Tesla doubled a new-car price discount to $7,500 for Model Ys and Model 3s delivered this year — adding to investor jitters about softening demand.
Tesla shares fell 7.3% to a more than two-year low of $114.12 in early trading on Tuesday. They are down more than 65% this year.
Tesla, which no longer has a media relations department, could not be reached for comment.
The massive decline in Tesla shares come as Musk appears increasingly distracted by his acquisition of Twitter. In recent days, analysts from Oppenheimer, Daiwa Capital Markets and Evercore ISI have all slashed their Tesla price targets.
Musk has sold almost $40 billion in Tesla shares this year in part to pay for his $44 billion takeover of the social media site.
“I needed to sell some stock to make sure, like, there’s powder dry … to account for a worst case scenario,” Musk said in a Twitter spaces conversation. Musk assured listeners he wouldn’t sell more stock but investors are aware he’s made similar promises before and hasn’t followed through.
Musk also has had to suspend operations at Tesla’s Shanghai plant as COVID cases surge. He’s also hinted the company won’t meet it’s production goals for the year.
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.
Still, Tesla dominates the electric vehicle space with a more than $350 billion market capitalization, remaining the biggest car company in the world. Toyota’s market capitalization is $222 billion, General Motors’ is $47 billion and Ford’s is $44 billion.
However, other companies like Ford and Hyundai are releasing electric vehicles which could further put in a dent in Tesla’s dominance.
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