Data shows that prices of used Tesla cars are dropping at a rapid rate than vehicles from other automakers, according to Reuters.
Last month, the price for a used Tesla was $55,754. It was down from $67,297 in July, indicating a 17 percent drop. Edmunds' data revealed that the overall used car market posted only a 4 percent drop during that period.
How Tesla Owners Earn From Selling Used Cars
Over the last few years, as Tesla increased the prices of its new cars, the prices of used Tesla cars are also rising fast, according to Electrek.
Earlier this year, the price of the used Model Y went out of control. It started to sell for more money than new Model Y vehicles.
One factor for such a case is that customers were happy to pay more for a used Tesla than a new one. This is in order to avoid having to spend months on a waitlist.
The buoyant market for used Tesla cars proved to be lucrative for current Tesla owners who found they could earn a profit by selling their Tesla electric vehicle (EV).
However, that opportunity seems to be disappearing fast recently as prices of used Tesla cars started to drop.
While it's good for the affordability of Tesla vehicles, the current situation will put pressure on the company's new car demand.
This month Tesla is offering discounts on its new vehicles ahead of the new federal tax credit which will come into effect next month. With this, we are finally starting to see the prices of used Tesla cars go down.
This emerging trend in the prices of used Tesla cars is going to help with the used cars' affordability. However, it will have a negative effect on the automaker's growing used car business.
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Demand for Tesla Cars Has Recently Dropped
According to Reuters' report, factors such as rising fuel prices as an effect of the Ukraine war helped to boost sales of Tesla, one of the few long-range electric vehicles in the market.
Compared to other vehicles, Tesla raised the prices of its vehicles faster, building its profit margin.
Meanwhile, there are customers who take advantage of the booming market of used cars. They buy new Tesla cars, sell them for a profit, then order a new one. This drives the demand for Tesla's new cars.
According to Digital Trends, there is one customer who purchased a new Model Y in 2021 for $49,000. Three months later, he sold it for $61,000.
However, more recently, the demand for Tesla cars has dropped as fuel prices ease and the automaker faces increased competition in the EV market.
Rising interest rates in addition to fears of a possible recession are also making people think twice when it comes to making big purchases.
The news about the drop in the price of used Tesla cars comes during a challenging time for the company's stock value, which fell by 9 percent on Tuesday.
Some of the reasons behind this are the concern over economic stability, the increasing competition in the EV industry, and the reports this week that the company's plant in Shanghai, China is suspending production for part of January.
Tesla is not the only one that is experiencing a drop in its stock value. Recently, other EV makers have also seen their stock value plunge.
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