The past year has been a wild ride for Tesla pricing. For new models, there has been a lot of coverage about the price increases happening overnight. Sometimes these price changes are in response to understandable real-world effects, such as the increasing price of aluminum and nickel. Sometimes they are seemingly random.
Used Tesla prices have been equally wild and often even more random.
Since Recurrent started tracking used prices in April 2021, the valuations of the used Tesla models tended to follow price increases for new models, as demand for “less expensive,” gently used vehicles grew. The long wait time for a new Tesla also pushed new car shoppers to the used market.
The chart below tracks price changes in select new and used Teslas over the last 9 months of 2021. Notice that the price increases are much higher for the Model S than the Model 3, even on a percentage basis. We saw a 25% increase for Model 3 compared to a 30% increase for Model S.
Note: This data is aggregated from thousands of U.S. dealerships and presented in U.S. dollars. For more on the methodology, you can read about it in our used EV report.
In the first quarter of 2022, a slight multi-month drop in used prices suggested that they had finally hit their peak around New Years. But, once spring hit, used Tesla prices started to rise again – this time, buoyed by unprecedented interest in EVs as gas prices soared and as major car manufacturers threw their weight behind electrification.
Used Tesla prices are back up around their December values, which are 10-20% higher than they were a year ago. While these are major increases, they are still much lower than the new price increases. Even in this crazy market, used cars are more resilient to short-term fluctuations than new ones.
Despite the much higher purchase prices of Teslas this year than last, this round of price increases for new vehicles is not discouraging shoppers: some models remain sold out through 2022. This suggests that interest in gently used, or “new used” Teslas will remain high and keep the prices going up.
Predicting the Future
I’m not an economist or fortune teller, but I do spend a lot of my day poring over market data. Here are the 3 things I can say.
- It is a good time to have an EV in your garage because new vehicle inventory is in no position to bounce back quickly or come close to meeting consumer demand this year.
- Even when it does, the lower-than-expected new vehicle production from 2020 - 2022 will mean a lower-than-typical supply of 3–4-year-old used EVs for the next few years.
- If you are lucky enough to get your hands on a new EV, it’s a great time to sell your gently used one at a high price, especially if you can demonstrate to the buyer that your vehicle’s battery has been kept in good shape. (We’ve heard about our report recipients printing out their EV reports to show a private party buyer who has questions about battery condition).
These points should all lead to another very interesting year for used Tesla prices. While that could be good or bad news, depending on your plans for the year, hopefully ,it helps you adjust expectations and be less startled by the changes.
Editor's Note: Scott Case is the CEO of Recurrent