Tesla used car values holding steady for now

As Elon Musk’s Department of Government Efficiency continues to wreak havoc on the United States government, consumer sentiment for Tesla continues to decrease. Protest events, like #TeslaTakedown, continue to grow as more and more people are angry at the CEO’s actions within the federal government.

New sales, especially in Europe, have plummeted. Even in the United States new registrations are taking a hit despite refreshed Model 3 and Model Y units rolling off assembly lines. While folks out there are encouraging you to sell your Tesla, what does the used car market look like for the brand? Are people dumping their Teslas?

Cox Automotive’s Manheim runs wholesale auctions across the country, where dealerships purchase inventory to keep their used car lots flowing. It does keep track of Tesla, along with the rest of the EVs it handles. So we wanted to know what the company is seeing.

Mark Schirmer, Director of Industry Insights and Corporate Communications at Cox Automotive tells us, “Perhaps due to expectations that the EV tax credit for used vehicles will be wiped out by the new administration, EVs values — and particularly used Tesla values — have been on the rise.” Despite what some people might tell you, people are definitely interested in EVs. Used EVs, in some ways, make even more sense as you don’t take the depreciation hit — which can sometimes be massive — and you get a reliable and reasonably newish car. The Tesla part makes sense, too, because if you are going to buy a used EV, things like the Tesla Supercharger charging network are things you’re probably interested in.

Conversion rate, according to Schirmer, for Teslas has been “well above 60%” since the summer, and his most recent data says that rate is at 69% (a number Musk would be proud of). Perhaps the most significant for Manheim is its MMR retention, which is a measure of price versus expectation. Schirmer tells us that a 100% MMR is an indicator that the value of the vehicles is flat. Tesla most recently is 99%, while the rest of the EVs are at 97%, indicating that Tesla used values are a bit more stable right now than other EVs.

Schirmer mentioned the dumping of Hertz-owned Teslas early last year, which pushed down the value and conversion rates. That flood is over, according to Schirmer, and mentioned that in early to mid-February of 2024, conversion was 40% and MMR was closer to 97%.

Sam Abuelsamid, VP of Market Research at Telemetry Insights shares a similar perspective. He says, “[Used cars] had already taken a big hit in late 2023 and early 2024 from a combination of Tesla cutting prices on new models and Hertz dumping thousands of rental cars into the used market.” He does point out that Cybertruck, specifically, has been falling and that he expects that trend to continue.

Abuelsamid does expect values to decline as more and more people decide that they don’t want to own a Tesla but does point out one variable that is likely keeping values steady. “The rate of this decline,” he tells us, “will probably be moderated by the fact that many owners are significantly underwater on loans and simply can’t afford to dump their cars and buy something else.”

“Bottom line,” Schirmer tells us, “nothing obvious in the data suggesting that Tesla’s wholesale values are being impacted.”