Tesla is leading a large drop in used electric car value in the US – with Model 3 being down 30% over the last year.
After an incredible rise in 2022 that resulted in some used EVs selling for more than brand new cars, used car value finally started to drop over the last six months.
According to iSeeCars, used car prices have dropped by less than four percent year-over-year for the third month in a row, but used EV prices are dropping even faster:
But used electric vehicle prices are collapsing even as overall used car prices stabilize. June saw used EV prices drop 29.5 percent from a year earlier, after falling 28.9 percent in May, 24 percent in April, and 16.8 percent in March. iSeeCars analyzed over 1.8 million 1- to 5-year-old used cars to identify the latest used car pricing trends.
iSeeCars Executive Analyst Karl Brauer notes that with Tesla representing the majority of the market, it is weighing heavy on the used EV price drop:
Vehicle prices are in a free-fall, dropping 15.7 percent since January and by an increasing amount every month so far in 2023. With Tesla cutting prices on new models its used EV values have tumbled. And because Tesla makes up the bulk of the used EV market the dramatic drop in Tesla values has impacted the entire category.
The Tesla Model 3 is leading the price drop with a whopping 30% drop in value since the high of June 2023:
|Top 10 Used Cars With the Greatest Year-over-Year Price Drops (June 2022 vs. June 2023) – iSeeCars Study|
|Rank||Model||Average Price (June 2023)||$ Price Change from June 2022||% Price Change from June 2022|
|1||Tesla Model 3||$37,023||-$16,258||-30.5%|
|2||Tesla Model X||$70,158||-$18,980||-21.3%|
|4||Tesla Model S||$64,938||-$15,212||-19.0%|
|5||Land Rover Range Rover||$75,481||-$17,095||-18.5%|
|6||Land Rover Range Rover Velar||$46,269||-$9,783||-17.5%|
|7||Land Rover Discovery||$40,986||-$8,255||-16.8%|
|8||Hyundai Ioniq Hybrid||$20,148||-$3,893||-16.2%|
|10||BMW 5 Series (PHEV)||$33,607||-$6,170||-15.5%|
It’s wild that prices dropped 30%, and yet the average used Model 3 still sells for $37,000, which is pretty close to the base price of a brand-new Model 3.
The high interest rates are becoming high enough that they are not only affecting new car buyers, but also used car transactions.
It’s creating a weird situation where used car inventory is at a record low because people are not upgrading, but prices are still falling because there’s insufficient demand due to buyers not securing financing.
We are going to have to wait a little more to have a great used EV market.
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