Tesla’s Pricing Strategy Sparks 32% Decline in Used EV Market

Tesla’s price cuts lead to a 32% fall in used EV values, with Teslas down 28.9%. Average used car prices dip across the board, with EVs hit hardest.

The average price of used cars has dipped to $31,153, marking a 3.6% decline from the previous year, with hybrids experiencing a sharper 6.5% fall in value.

Electric vehicles (EVs) have faced the most significant depreciation, with their prices dropping by 31.8% over the past year, as per an iSeeCars study. This study examined over 1.8 million used car sales from February 2023 to 2024, focusing on vehicles aged one to five years. The findings highlighted an overall softening in used car prices, with a notable plummet in EV values.

The Chevrolet Bolt experienced the most significant decrease, with prices falling 30.4% to an average of $17,981. Close behind was the Nissan Leaf, which saw a 29.1% reduction, losing $7,329 in value, followed by the Kia Niro EV with a 27.1% drop, equivalent to a $9,236 decrease.

EVs dominated the list of the top ten models with the largest year-over-year price drops, claiming seven spots, including the Hyundai Kona Electric and Tesla Models 3, S, and X. The Tesla Model X, in particular, saw a 24.6% decrease, with average prices dropping by $19,919.

Tesla experienced the most significant brand impact, with their average used vehicle price now at $36,515, down 28.9% or $14,808 from the previous year. In comparison, the second most affected brand, Alfa Romeo, saw a 13.3% price decrease, or a $4,412 drop.

iSeeCars attributes the dramatic fall in EV prices primarily to Tesla’s aggressive pricing strategy, which has not only diminished the value of their own used vehicles but has also affected the broader market. According to Executive Analyst Karl Brauer, the initial price cuts by Elon Musk had already influenced EV values a year ago, but subsequent reductions further depressed used Tesla prices, impacting the entire used EV market.

While EV prices are beginning to stabilize, they continue to decline, suggesting that potential buyers may want to wait before purchasing a used electric vehicle.

Currently, the average cost of gas-powered cars, hybrids, and EVs is around $31,000, a significant change from February 2023, when the average used EV was priced at $45,321.

Despite the recent price drops, Brauer notes that used car prices are still significantly above the pre-pandemic average of approximately $20,000, with no signs of returning to those levels in the near future. However, prices are expected to stabilize into the fall, offering some relief to used car shoppers.