Sorry you’re upside down in your Tesla.
Just buy the Tesla – that’s a phrase we hear constantly both as a serious statement and a joke. Lately, it seems more of the latter, especially in light of a study of used vehicle prices conducted by iSeeCars. The company has observed that recently prices for used cars, trucks, and SUVs are stabilizing after rapidly declining earlier in the year. However, the drop in used values for electric vehicles seems to be increasing, far outpacing gas- and diesel-powered options.
According to iSeeCars’ analysis, used car prices dropped 3.6% year-over-year in June versus 6-8% from January to March. But when it comes to used EVs, June saw a catastrophic drop in values of 29.5%, accelerating the 28.9% drop in May and 24% drop in April. In other words, all those smug license plates mocking anyone for daring to use gas are becoming increasingly ironic.
You could look at this one of two possible ways. If you’re in the market for a cheap used EV, this might be music to your ears. However, if you finally took the leap of faith and bought the Tesla after being told repeatedly it’s the greatest car in the world and literally the future, you might be realizing you’re severely upside down in your car loan.
“A year ago, used EV prices were on the upswing, rising faster than the average used car,” said iSeeCars Executive Analyst Karl Brauer. “Electric vehicle prices are now falling at nearly 10 times the rate of the average used vehicle, reflecting a clear shift in EV supply and demand.”
Attitudes towards EVs could be shifting, or the rapid increase in EV ownership might have exhausted future demand. In other words, many of the people who’ve been considering buying a Tesla or whatever electric car of their dreams have done so.
Those price discounts could also help explain the erosion of used EV prices. After all, when one can get a deal on a new car, why would you buy a used one? Brauer believes the Tesla price cuts have indeed tanked the used EV market, and it shows with the Tesla Model 3 and Model X as the top two used cars with the greatest year-over-year price drops from June 2022 to June 2023.
The Model 3 on average saw its used value plummet 30.5% while the larger and far more expensive Model X experienced a 21.3% drop. While the Nissan Leaf came in third, the Tesla Model S was fourth. In fact, the only non-electrified vehicles in the top ten were all Land Rovers, which is just hilarious.
Images via Tesla