Tesla EV prices have taken a nosedive, with Tesla’s Model 3 leading the charge, according to a new study. This news isn’t just a blip—it’s the continuation of a year-long trend that has seen used EV prices dropping at an eye-catching rate. They are even outpacing gasoline and hybrid vehicles by a wide margin.
If you’ve been eyeing a used electric car but are still unsure because of the cost, now might be the time to take another look.
A report from a known automotive research firm iSeeCars suggests a remarkable shift in the used electric car market. Here’s what the report says!
Tesla Model 3 and EV Prices Dropping to Record Lows
The iSeeCars report found that the prices of cars like the Tesla Model 3, Nissan Leaf, Hyundai Kona Electric, and Kia Niro EV have dropped six times faster than gas-powered vehicles over the past year.
EVs, which once carried a hefty price premium, are now becoming more affordable at a pace that’s hard to ignore.
So, how dramatic is this price drop?
According to the iSeeCars data, used electric vehicles have lost an average of 24.7% of their value between September 2023 and September 2024. In comparison, used hybrids only depreciated by 6%, and traditional gas-powered cars by just 4.4%. This means that in just one year, EV prices have fallen nearly 25%—a sharp decline that has made them more accessible to a broader range of buyers.
For some context, this data is based on the sales of 1.6 million used cars that were one to five years old. The trend has been particularly noticeable in the prices of well-known EV models like the Tesla Model 3, Nissan Leaf, and Chevy Bolt EV. All these models have seen significant price reductions over the past year.
Why are we seeing such a steep decline in EV prices?
Much of this stems from a series of aggressive price cuts initiated by Tesla in 2023. Those reductions triggered a ripple effect, pushing other automakers to slash their prices as well, which in turn affected the resale value of used EVs. It’s a classic case of supply and demand, with prices adjusting to match current market dynamics.
A Reddit user shared how they bought a new Mach-E in June 2023 for £63k, but in just a year, it’s now worth around £35k. Even though the value dropped by nearly half, they shrugged it off, saying it’s a long-term car for them, so they’re not too worried about the loss right now.
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Affordability Driving Sales
Karl Brauer, an executive analyst at iSeeCars, noted that these price cuts are key in driving up sales of used EVs. He said that while this decline is less drastic than the 30-40% plunge observed at the end of 2023 and the first half of 2024, it has affected market demand. The lower prices have spurred faster sales, with used EVs spending much less time being on the market for sale compared to a year ago.
What does this mean in practical terms?
Essentially, it means used EVs are selling faster than they were a year ago. Back in September 2023, it took an average of 55.3 days for a used EV to sell. Fast forward to today, and that number has dropped to just 38.6 days. For context, used gas cars and hybrids now sell at roughly the same rate, marking a remarkable shift in consumer behavior.
People are going for EVs more now!
Affordability has become a key factor here. The average price of a used electric vehicle now stands at around $27,000, a significant drop from previous years. According to iSeeCars, prices are expected to stabilize at around $25,000. For many, the lower price point helps make the decision to switch to electric a lot more appealing.
The Top Models Leading the Charge
So, which models are seeing the most dramatic price drops?
The Tesla Model 3 is leading the price drop wagon. Often considered the flagship of mass-market EVs, the Model 3 is now selling for an average of $26,000. That’s a staggering $8,500 less than it was just a year ago. If you too want a used Model 3, this could be the perfect time to make the leap.
The Tesla Model 3 isn’t the only EV experiencing a sharp drop in resale value. The Nissan Leaf, one of the earliest affordable electric cars, now costs around $16,000 on the used market—$4,000 less than last year.
The Kia Niro EV has also seen its price plummet, with an average resale price of $22,000, down $6,000 from the previous year. Other options like the Chevy Bolt EV and Jaguar I-Pace have followed similar trends, offering attractive price points for buyers.
Perfect time to buy an EV?
Since many of these are used models, they might not have the newest tech or the longest battery range. Still, for most drivers—especially those who mainly drive in the city or take frequent short trips—these slightly older models are still a great deal.
Is This The New Normal For EV Prices?
While EV prices have been dropping rapidly, the iSeeCars study indicates that the market might be leveling off. At the end of 2023 and the beginning of 2024, used EV prices were plummeting by 30-40%. Now, with the average price drop at 25%, the decline appears to be stabilizing.
But why the sudden correction in EV prices? There are several factors at play.
The rapid expansion of EV production has created a more competitive market, with automakers offering more models at a wider range of price points. At the same time, advances in battery tech and production efficiency are driving down the costs of new EVs, affecting the resale market.
As EVs become more mainstream, their resale value is expected to become more stable, much like traditional ICE vehicles. And while hybrids have shown more price stability over the past year, it’s clear that the EV market is going through a period of adjustment as consumers adapt to EV culture.
Bottomline
For buyers looking to make the electric switch, the current market does offer the best opportunity. There’s never been a better time to explore the used EV market, specifically for a Tesla. The substantial price drops, combined with the long-term savings on fuel and maintenance, do make a compelling case for going electric.
However, it’s important to do your homework. It’s not all rosy as it may seem.
While the lower prices are enticing, it’s still crucial to consider factors like range, charging infrastructure, and your own driving habits. Go for a used EV if your lifestyle suits driving an electric vehicle for your daily drive. Will you buy a used EV?
