Tesla’s Model 3 and Model Y are commanding the used electric vehicle (EV) market, even as their prices continue to fall dramatically, according to recent data from a major online car marketplace. The price of a used Tesla Model 3 has dropped by 29 percent over the last year due to a lack of demand, a huge glut of supply, and lower prices for new EVs.
Forbes reports that the electric vehicle landscape is undergoing a significant shift in the used car market, with Tesla emerging as the undisputed leader. According to recent data from Cars.com, Tesla accounts for a staggering 42 percent of the used EV market share on their platform. This dominance comes at a time when used EV prices are experiencing a notable decline, particularly for Tesla’s popular Model 3 and Model Y vehicles — both of which are failing to hold their value on the used market.
According to Rebecca Lindland, Senior Director of Industry Data and Insights at Cars Commerce, the Tesla Model 3, in particular, has seen a dramatic price decrease. As of July 2024, the average price for a used Model 3 stands at $26,000, marking a 29 percent decline compared to the previous year. This pricing puts it below the average cost of a used car across all fuel types and brings it tantalizingly close to the $25,000 maximum threshold for eligibility under the Inflation Reduction Act’s (IRA) used EV tax credit of $4,000.
Similarly, the Tesla Model Y has experienced a comparable price drop, with a 27 percent year-over-year decline.
The reasons behind this price crater are multifaceted. Increasing used vehicle inventory is a primary factor, putting downward pressure on used EV pricing. Additionally, the new EV market is indirectly influencing used prices. Dealer discounts, manufacturer rebates, and the IRA EV tax credit for new EVs are making new electric vehicles more attractive, which in turn affects the perceived value of used models.
Regardless of the reason, the price slides are bad news for Tesla owners, who purchased their EVs with the expectation that they would hold their value well into the future.
Despite these price reductions, EVs still face competition from their gasoline-powered counterparts. In Cars.com’s July “What’s Hot” used vehicle ranking, the Tesla Model Y placed 13th and was the least expensive vehicle on the list. The Porsche Taycan was the only other EV to crack the top 10, indicating that traditional combustion engine vehicles still hold significant appeal in the used car market.
The overall sentiment for EV sales at dealerships has also seen a decline from its peak in the first quarter of 2022, according to Cox Automotive’s Dealer Sentiment Index. This shift in dealer perception may be another contributing factor to the depressed used EV prices.
Read more at Forbes here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
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