Used Teslas have historically traded at a premium in the US of A, but it would seem that those days are rapidly disappearing in the rear-view mirror as demand for the brand is plummeting. Just in the past few months since summer, the price of a used Tesla across the pond in Americaland has dropped by almost 20%. From a peak of USD67,000, they now stand at USD55,000, according to a report carried by Reuters; during the same period, the overall price of other used cars has fallen just 4%.
The high prices for used Teslas are now a distant memory from the heady days of the pandemic when a used car actually sold for more than a new one. Interestingly, almost a third of the Teslas up for sale are recent 2022 models, which could be a sign that the demand in new sales was driven by the buyers’ aim of flipping the vehicle at a profit. This compares to about 5% for other brands, according to data from research Firm Edmunds.
The fact that you cannot sell a Tesla for more than you paid for it now will dent demand for new cars and this is already weighing on the minds of shareholders. The share price has dropped some 44% in the month of December, meaning that Tesla is no longer in the list of top ten largest US companies, although they are still the world’s most valuable car business with a market cap of USD350 billion, compared to Toyota’s USD222 billion. Some of the fall may be a distraction caused by Elon Musk’s foray into Twitter, of course.
Tesla, like other EV manufacturers, is running into some serious issues, ranging from ever increasing competition brought on largely by looming government bans on new ICE vehicles leading to ever-increasing costs of key components like batteries to the lack of infrastructure for charging the new-normal EV-World. Then, of course, there is the small issue of residual value of an EV with worn-out batteries with the replacement costing more than the sticker price of a new car
