From the United States to France and Germany, the observation about Tesla is the same: “Among the losers are car dealerships and Tesla owners who are currently offering their vehicle on the used car market. The prices of used Teslas are lowered, due to the discounts on new vehicles,” as announced by the German automobile club Adac on June 11th. Logically, the future value of a used vehicle depends, among other factors, on its selling price when it was new. Hence, some Teslas purchased two or three years ago at a high price can now be found in the used car market at prices similar to a new equivalent vehicle from the American label show-room.
Hertz, caught red-handed
A financial catastrophe for some companies. The rental company Hertz did not hide its discontent on the matter earlier this year and conspicuously announced that it was getting rid of its 20,000 Teslas indefinitely. Its competitor Sixt is taking the same approach. And Laura Roberson, an American academic working on residual values, explains, “With older models retaining more value than new ones, Tesla is a notable exception in the used car market.” Closer to home, in France, the used car specialist group Sofipel does not hide its current lack of enthusiasm when it comes to marketing a second-hand Tesla: “Tesla has a strong impact on the residual values of its vehicles with its regular price changes,” says Antoine Pelleau, the group’s commercial strategy director. “This factor, combined with the weakness of the used electric vehicle market, has led us to no longer offer second-hand vehicles of this brand for sale, or at the margins and under conditions of purchase that allow us to absorb these variations.”
-20% in 18 months
Lessees who feel cheated, cautious vehicle distributors, the “Tesla bubble” seems ready to burst once and for all. In January 2023, for a 12-month-old vehicle, the Model Y had a residual value of 96.4%. Now the value is 75%. Twenty points have been lost in a year and a half. It is the entire market that has plummeted, or rather, it is Tesla’s fall that has dragged down the whole market, according to Yoann Taitz, the head of residual values at Autovista for France and Benelux. The same goes for a Model 3. In January 2024, this one-year-old sedan still had a residual value of 84.1%. “Today we are at 73%. We have gone from €39,600 to €34,300, with a loss of €5,300,” points out this automotive market specialist.
A classic generalist brand
Comparing the values of a 3-year-old Model Y with other vehicles in the same segment. The Model Y currently shows a 55.5% residual value, a Skoda Enyak at 54.8%, and an MG Marvel R at 53.8%. Yoann Taitz also notes that a “Ford Mustang Mach-E, despite its free fall, retains an average residual value of 56.4%.” Even stronger. While Tesla entered the automotive market with a high-end positioning, its values no longer hold up compared to BMW, for example. “A 36-month-old BMW i4 today retains a value of 62.5% compared to 58.2% for a Model 3. Tesla has become a classic generalist brand!” observes the Autovista expert. Therefore, Tesla’s global new deliveries dropped by -9% in the first quarter (January to March) compared to the same period in 2023 and another -5% in the second half (April-June). In 2019, however, Tesla CEO Elon Musk assured various American media outlets that the value of his cars would increase over time.
LOA or LLD rather than a personal loan
Buying and then reselling a Tesla actually results in losing at least as much money as with another brand or electric model. But motorists interested in a new Tesla can protect themselves from the adverse effects of these unexpected price variations and, according to Yoann Taitz: “It is not advisable to finance a Tesla with a personal loan, it is better to take it in LOA or LLD and let the manufacturer deal with the risk.” This does not bode well for the already financed Teslas by individuals.