It’s a seller’s market, right? Teslas are hard to get—so you should be able to score a high, over MSRP price as a seller, no?
And surely if you have an older Tesla (like a Model 3), you should be able to sell that for close to what a new one costs, correct?
The cold, hard truth of late 2022 is that prices are coming way down, and there are a bunch of reasons for this that haven’t quite caught up with mainstream knowledge in the EV community yet…
At Find My Electric, we’re EV experts through and through, so we love educating and chatting with customers! We’ve had so many questions/discussions about this topic lately, we thought it was time to drop a post on the blog so everyone can learn together and benefit from our expertise!
In this post, we’re going to look at the various reasons why Tesla and EV prices are dropping like crazy—and explain what you can do if you’re still looking to sell yours (don’t worry, there are still plenty of ways to get a fair price and sell it in a reasonable amount of time).
With that said, let’s jump in!
Reason #1 – The New EV Tax Credit is Coming in 2023
With the passing of the Inflation Reduction Act, the EV tax credit (formally known as the “Qualified Plug-in Electric Drive Motor Vehicle Credit”) has been officially amended. Or, in layman’s terms—the EV tax credit is back, baby!
This credit will apply to Model Y Long Range, Model Y Performance, the Model 3 Standard Range, and a bunch of other electric vehicles…and this has had a major impact on the current state of the EV market.
While it’s true that not everyone will qualify for this credit, there are a lot of buyers currently waiting for it, and they’re not buying anything that’s on the market right now.
Furthermore—many dealers are quite skittish about buying certain vehicles (especially 2022+ Tesla Model Y), for fear that they’ll be left holding a massive bag when the tax credit drops.
And this all makes perfect sense, but it’s a big factor that didn’t exist months ago before the law had officially passed.
Reason #2 – The Used Market is Flooded with Certain EVs
Have a white 2022 Model 3 or Y? Unfortunately, you’re among thousands of sellers at the moment…
There are many people with dreams of flipping a Tesla who’ve had their orders hit, taken delivery, only to find out that the market is very saturated at the moment, and Teslas are now back to the age-old adage of “if you drive it off the lot, it’s immediately worth x amount less.”
Additionally, there are tons of people with aging Model 3s (think, 2018-ish) who are looking to dump them now that the factory warranty has expired, and Tesla doesn’t offer an extended warranty for 3 and Y; therefore, the market is currently flooded with these cars too (which doesn’t mean you can’t sell yours, but more on that later).
Reason #3 – High Interest Rates and Broader Economic Factors Aren’t Helping the EV Market
Most people in the US are feeling the pain of The Fed’s current anti-inflationary monetary policy, and the EV market is feeling it too…
People are hanging onto money and staying in cars they have. Or, at the very least, can’t justify buying unless they can find a killer deal.
Reason #4 – Production Is Finally Catching Up
While many EV manufacturers still have notable delays for some vehicles (we’re looking at you, Rivian) the wait time isn’t nearly as bad as it used to be for many makes/models.
For example, the wait used to be a year out for the Model 3 Standard Range, but now it’s only a month or two.
So, if you have a reservation coming up on one of those and were thinking of flipping your Tesla, you’re out of luck.
Reason #5 – Many “Whales” Already Got Their “First Drop” EVs
The best time to sell a new, hot EV is right away. Literally, as soon as you get it—it should be for sale.
Why? Because the pool of high-end buyers with deep pockets (or “whales” as we like to call them) who are willing to pay tens of thousands of dollars over MSRP—dries up within months. And, production often ramps up or the market gets flooded with other people looking to cash in (see the Rivian R1T as an example of this).
With that said, unless you have an original reservation Hummer EV or a few other select EVs, the pool of buyers willing to pay the big bucks disappears quickly.
And, many of these whales have already bought the first drop EVs that are out now, so you’re left with a secondary and tertiary pool of buyers who aren’t willing (or able) to pay nearly as much.
A great example of this is the Rivian R1T, as mentioned above, which is essentially selling at MSRP now for the Adventure Package.
Reason #6 – Dealers Who Didn’t Know The EV Market Well Overpaid, And Are Dumping Their Inventory At Auctions
At Find My Electric, we work with some of the savviest EV dealers on the market—and even they’ve told us that things are slow in some ways right now…
But what about mainstream dealers who don’t know EVs all that well? The truth is, a lot of them got burned by dumping money into Teslas and EVs over the last 6 months, not truly understanding how the EV market differs from the ICE market. They thought they’d forever be able to sell them at massively high prices, and that just isn’t the case at the moment.
And now, as prices have dropped, they’ve had to liquidate a lot of the Teslas and EVs they bought (thinking they could rake in a massive profit) at dealer auctions just to recoup their capital.
We’ve been told by our EV dealers that auction EVs are extremely cheap at the moment, which impacts pricing on the private market. Why? Because if dealers can buy them super cheap at auction from other dealers who are dumping them, then they’re also willing to pay less on the private market.
Will this last forever? Probably not, but it’s the way things are at the time of writing.
Reason #7 – Tesla Just Cut Prices for December 2022
In an uncommon move, Tesla cut prices on by
$3,750 $7,500 (edit: on 12/22/22 Tesla changed the credit from $3,750 to a whopping $7,500) on Model 3 and Y delivered in December 2022. Why? Well, only Tesla knows, but the obvious reason was to help their year-end sales numbers and increase deliveries for those who are waiting for 1/1/23 in order to get the full $7,500 federal tax credit.
This isn’t earth shattering news for the used EV market, because the weight of the upcoming tax credit is baked into to many used EV prices at the moment (because everyone has known it’s coming for a while), but it is still an overall pricing hit to the market.
Furthermore, no one know what Tesla will do with prices on 1/1/23 when the tax credit comes into effect (historically, they have often adjusted prices when tax credits come and go), but that remains to be seen.
So, What Does This All Mean?
There are 3 main points to understand about the EV market right now:
- Tesla flipping is over, at least for now…
- Buyers are suddenly in a much better position…
- There is still plenty of room for sellers to sell, but the prices have to be right…
In fact, we aren’t the only one talking about how Tesla flipping is done…
Check out this insanely informative video by George Saliba of J&S Auto—one of the top dealers in our Premium EV Dealer Network:
Want a cash offer on your Tesla or EV? CLICK HERE to get an Instant Offer from George and other top dealers in our Premium EV Dealer Network!
How Can Sellers Win In This EV Market Downturn?
There are a few important ways that sellers can still win in this declining (for the moment, anyway) EV market…
1) Get a Featured Listing With Find My Electric To Take Advantage Of Our Expert Pricing Help & EV Buyer Exposure
The MOST important factor in selling a Tesla or EV quickly is having the right price…and how do you know what that is?
Looking at KBB value? Checking other sites? Checking sold listings on Find My Electric?
All of these things help, but when you pay $49 for a Featured Listing on Find My Electric, you get access to our team of EV experts to personally help you set the right price.
No one sees more EVs than we do, many of our Featured Listing customers tell us that the 1-on-1 listing advice and pricing help alone is worth the $49 one-time listing fee!
We also don’t take a percentage of the sale, so $49 is all you’ll pay—till your EV sells!
Also, Find My Electric is the #1 all electric used Tesla and EV site in the US, so by listing with us, you’ll get access to the attention of thousands of Tesla and EV buyers each day!
And while we do offer a Free Listing option that is totally free, it doesn’t come with Expert Pricing Help, or live phone support. So, if you’re seriously looking to sell—considering purchasing a Featured Listing today!
2) Get An Instant Offer From Our Premium EV Dealer Network
Find My Electric is unique, because in addition to the ability to create a listing for your EV and get exposure to thousands of buyers per day, we also offer an Instant Offer option.
Here are some quick points about requesting our Instant Offer program:
- It’s totally free
- There’s no obligation to accept any offer
- You can get offers from multiple dealers in one place
- Our dealers are EV specialized (not gas car dealers)—so they know what rare features like Free Unlimited Supercharging are worth
- Deal with real people, not computer algorithms
- Our EV dealers buy and ship cars nationwide
- You can list your EV, request an offer, do one or the other—or both!
- You have nothing to lose!
What if you’re a buyer and all this selling stuff doesn’t apply to you?
No problem, we’ve got you covered too! Check out our used EV listings here on Find My Electric—The Ultimate EV Marketplace!