Why you shouldn’t buy a Tesla anytime soon

Why you shouldn’t buy a Tesla anytime soon

Report: Tesla V3 Supercharger Output To Be Increased To 324 kW

With new Tesla models dropping in price, it might not be worth investing in a pre-owned EV, especially a Tesla, for now.

  • Tesla’s recent price reductions on the Model S and Model X have made buying new Tesla vehicles more affordable than pre-owned ones.
  •  The price cuts on Tesla models have caused a significant drop in the resale value of used Tesla vehicles, particularly the Model 3.
  •  The upcoming release of the affordable Model 2 in 2024/2025 could further impact the resale market, making it less favorable for pre-owned EVs from other brands as well as Tesla’s own Model 3.

In the ever-evolving landscape of electric vehicles, Tesla has again shaken the market with dramatic price reductions. The recent overhaul in pricing for the Model S and Model X has sent shockwaves through the automotive world, making it tempting for prospective buyers to consider taking the plunge into the world of Tesla. However, there’s a crucial caveat that potential buyers should consider: the used Tesla market may not be as enticing as it first appears.

Tesla’s move to cut prices on the Model S and Model X by 15-19 percent in the U.S., alongside similar adjustments worldwide, has garnered significant attention. With base prices starting at $74,990 for the Model S and $79,990 for the Model X, it’s easy to get caught up in the excitement. These price drops come with enticing perks, such as larger battery capacity, extended range estimates, and various paint colors at no extra cost.

Therefore, shopping for new Tesla vehicles may be even cheaper than pre-owned, depending on which model you’re looking at. This is unprecedented territory, which makes for an exciting close-out of 2023 and entry to 2024. The entry-level Model 2 may even roll out in 2024 with a 2025 model year nameplate, so the future looks surprisingly affordable for the brand and drivers.

Hold Off On Used Teslas: It’s Cheaper To Buy New

  • Tesla recently dropped prices on popular models, S and X, by 15 to 19 percent.
  • The Model 3 also saw a price drop totaling $3,000.

One of the more exciting things happening with Tesla is the fact that the brand has slashed prices across the board. Recently, Tesla’s move to cut costs on the Model S and Model X by 15-19 percent in the U.S., alongside similar adjustments worldwide, caused a bit of attention from those who were looking at the once more affordable used versions of these EVs. However, with Tesla slashing prices in hopes of gaining more sales and customers, we’re at a weird point for resale value and the future of used Tesla models.

With base prices now starting at $74,990 for the Model S and $79,990 for the Model X, buyers have more purchase power in the new car realm rather than shopping used and spending about the same. That said, pre-owned Tesla prices could fall due to these sales, but they have not yet. Conversely, those trying to sell their Tesla Models S and X are likely having trouble, as the industry’s 15 to 19 percent deals are wreaking havoc.

Not every day a major auto company cuts costs near the 20 percent mark. Tesla hopes to lessen its production and battery costs moving forward: New models could continue to be cheaper. The Model 3 even saw a slight price cut of $2,000, which is great news for those wanting to spend under $45,000.

Used Model 3 Prices Fell Over 30 Percent This Year

  • The Tesla Model 3 fell 30.5 percent in resale value for used vehicles.
  • Tesla’s continuing to cut down on prices for Model 3 has shocked the used market.

Another shocking revelation for many Tesla owners and buyers was the pre-owned pricing of Model 3. Over the past year, we’ve seen price reductions for the Model 3 from Tesla for brand new vehicles, causing its resale value to fall significantly. Notably, used Tesla Model 3 prices declined the most, with the average list price falling by 30.5 percent in the past year. This has rattled many in the market to buy and sell Model 3s as Tesla slashes prices, announces revamped versions, and reimagines its image as the world knows it.

Again, that doesn’t mean those who own a Model 3 have a nothing burger on their hands, but it does raise a few concerns for us and experts in the pre-owned EV sector. After all, most used cars lose a major percentage of their value within three years: Tesla could be exacerbating this. In the total used EV market, we’re seeing sale prices fall by as much as 29.5 percent since June last year, so this is not a Tesla-exclusive issue. Other EV manufacturers are competing with incentives and deals heading into 2024, so this will likely continue to impact the resale value of your electric cars.

A Glimmer Of Hope: Used Teslas Tend To Hold Their Value

Tesla Model X

  • Tesla vehicles tend to retain value (depreciate slower) than gas-powered cars.
  • With more discounts being offered by Tesla, the second-hand market is falling.

Although this may seem like the rapture for many Tesla owners and pre-owned buyers, you have a bit of hope. After all, Tesla’s tend to depreciate at a slower rate than gas-powered cars. This is because Tesla doesn’t upgrade vehicles as dramatically each year as other car brands do, and the batteries in these EVs are known to last longer. That said, with Tesla slashing prices on S, X, and 3 models, this could have a damaging effect on resale value in the short term.

If you had the choice to spend more on a used vehicle, would you? Few people would voluntarily purchase a pre-owned Tesla when they could pay the same or slightly less for a brand-new version. That’s what is causing concern for many forecasters and owners of Tesla cars. If the demand is high, but the price is low, that almost always creates a messy second-hand market. Electric cars are seeing increased demand in some sectors and not as much in others, so we’re in an odd time right now to buy and sell them.

How A $25,000 Tesla Model 2 Could Destroy The Pre-Owned EV Market

  • Tesla introducing a $25,000 new EV could ruin the resale market for electric cars.
  • 2024-2026 will be a great time to shop for NEW Tesla models.

Another factor in the after-market value of Tesla vehicles tugging at many minds is the long-anticipated release of an ‘affordable’ Model 2. With an expected release of 2024/2025, the Model 2 would become the first Tesla with a price tag of under $30,000, at an impressive $25,000 estimated MSRP. When this happens, you can kiss resale value goodbye in the short term, as people will flock to a new cheap model over an expensive pre-owned one.

However, this may not hold accurate for Model X, Y, and S shoppers, as these vehicles are more expensive and cater to a different market. That said, Model 3 customers would likely jump ship to the Model 2 rather than a used Model 3, so 2024/2025 could be a year to remember for Tesla owners.

One more thing to consider is that Tesla dropping one of the most affordable electric vehicles EVER will single-handedly ruin the resale value of other brands’ EVs. When prices drop low for new cars, the second-hand market sees slashes so great it takes a major blow. This is good news for those shopping pre-owned (sometimes), as you have more leveraging power, but it can also be a reverse situation. As we’ve warned, buying a used Tesla *right now* is a mistake. You’re much better off taking a deal for a new model or even waiting until some of these others enter the market.

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