The used Tesla market is crumbling
As Elon Musk continues to take an outsized and controversial role in the US government, reports of harassment of Tesla owners and vandalism of showrooms and vehicles are on rise. That may, in part, be contributing to plunging resale values and interest in used Teslas in the United States.
Though Tesla has enjoyed the attention of President Donald Trump, its stock price has erased all of its gains since Election Day. It reported its first-ever drop in global sales last year, and it faces stiff competition in China and slumping sales in Europe. In the United States, Musk, Tesla’s CEO, has faced blowback for his cost-cutting actions in the federal government.
Despite the record low prices for a Tesla on the used market and a prominent advertisement by the president of the United States, the cars have been having a tough time finding buyers, according to a March survey from Cars.com.
Searches for used Teslas decreased 16% over the past month, while demand for used non-Tesla electric vehicles has increased 28% over the past year.
And it’s not just internet searches. CarGurus, a car-buying site, found that used Tesla prices are falling at more than double the rate of the average used car price. The Cybertruck, the controversial steel-sided pickup, fared the worst of any Tesla vehicle, with a resale value 58% less than its original price, according to CarGurus.
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New YorkCNN —
Tesla owners who want to sell are also having a hard time finding buyers, much less ones that will buy for a decent price. Some Tesla owners say they have buyers’ remorse amid reports of vandalism and protests against Musk, as well as their personal feelings toward the CEO.
“I would sell it in a heartbeat if somebody offered me a decent price, but the chances of that happening probably not the case,” Pam Perkins, who’s from Northern California, told CNN this month.
Jennifer Trebb, from Ohio, traded in her Tesla Model Y a few weeks ago and took an $18,000 to $20,000 financial hit.
“It did lose a vast amount of value in the short two years that I had it. It only had 10,000 miles on it,” she said. But Musk’s role in the government “doesn’t fall in line with my morals, my beliefs, and every time I looked at the car, that’s what I thought of.”
Lose some, win some
It’s too soon to tell whether the politics of Musk, its CEO, have impacted new Tesla sales in the US, and there’s a lot of compounding reasons why customers could be turning away from even used, cheaper Teslas.
Outside of anecdotes, there hasn’t been a definite connection made between the string of attacks against Tesla vehicles and facilities and any potential loss of sales. The company was booted from a Vancouver auto show over safety concerns.
The S&P Global Index broke down sales data based on “red states” where Republicans won four straight presidential elections and “blue states” where Democrats did. It showed Tesla loyalty was waning in blue states – there, the percentage of repeat Tesla buyers fell from 72% in the last quarter of 2023 to 65% the next year. Repeat Tesla buyers in red states increased slightly, from 47.6% at the end of 2023 to 48.2% at the end of 2024.
Trump, Musk’s biggest political ally, and his administration seem to be taking it on themselves to protect the brand’s reputation.
Trump this month hosted a de-facto advertisement for Tesla on the White House South Lawn, where he said he would purchase a Tesla at full price. Attorney General Pam Bondi said the attacks on Tesla are “nothing short of domestic terrorism,” and White House Press Secretary Karoline Leavitt said Wednesday that the “Democrats were big supporters of Tesla and of electric vehicles until Elon Musk decided to vote for Donald Trump.”
It may be easy to look at public outrage and say the brand is weakening, Ike Silver, assistant professor of marketing at University of Southern California told CNN, but the reality is more complicated: As it’s losing followers in one demographic, it could pick up fans in another.
“The noise, the protests, make it seem as if the brand is sort of dropping, but the brand is strengthening among a different target audience, which is people on the right,” Silver said. “The question is will the number of new customers being brought in on the right outweigh the number of angry customers who are leaving on the left.”
Prices don’t tell a simple story
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Demand for used Teslas has been falling since last summer after peak interest hit the brand in May 2024, because of more inventory and Cybertrucks hit the used market, David Greene, Cars.com analyst told CNN.
One major reason the Tesla hype has faded isn’t because of politics at all, but rather because of more competition. Cars.com counted 76 used EV models on the market in February, compared to 58 the year prior.
“Tesla has to compete with all of those cars in a marketplace that they basically helped to define,” Brian Moody, executive editor of car marketplace Autotrader, told CNN.
The used car market follows the new market, where Tesla has also initiated price cuts to better compete. If a car dealer is “sitting on your lot of used EVs, you can’t sell it at the same high price you could have last week when you know all the brands just cut their prices on the new cars.” Greene said.
Greene also said about 70% of new EVs were leased, which could mean a bunch of used Teslas are hitting the market around the same time.
And as far as price goes, electric vehicles tend to depreciate in value 11% more rapidly than a gasoline-powered car, Moody said. That’s because customers tend to think of EVs more as technology than simple transportation, and they’re more worried about battery health and whether they’ll miss out on the latest updates.
“There’s a lot of things happening at once (for Tesla) that it’s difficult to point to any one cause,” Moody said.
