Teslas lose resale value as Musk slashes prices

Marianne Simmons, a self-described “Tesla fan girl,” purchased her second EV from the company in September. A white performance Model Y sold for over $77,000 for her. The company then lowered prices on Thursday, and she realized she could have bought the same car for $13,000 less today.

“I feel cheated. I feel taken advantage of as a consumer,” said Simmons, 32, a web designer in Naples, Florida. “In no time, I got $13,306. That’s a huge reduction and it will affect a lot of people who just bought a car.”

This is the reality facing Tesla car owners, and Tesla has slashed car prices by as much as 20%. It’s part of CEO Elon Musk’s push to boost sales in the face of weakening demand. For existing customers, the resale value of the cars they own will take a hit as new model prices drop.

Ivan Drury, Director of Insights at research website Edmunds.com, said: “Anyone who bought a Tesla recently will feel the effects immediately. [and] I wish they would lease it. ”

Drury said the price cuts on new cars could quickly hit used cars, further reducing their value. New-car buyers are looking for new-car smells, so used-car prices could fall further, he said.

This is an age-old problem in the automotive industry. Consumers could have bought a car and seen ads for rebates pop up days later, saving thousands of dollars. Dealer discounts are often limited-time sales, and Tesla’s discounts are larger than regular rebates, so this time it’s different.

Simmons and other Tesla fans aren’t the only car buyers whose resale prices are falling. Used model prices fell 15% in December, while new prices averaged nearly $50,000, according to research firm Cox Automotive.

Tesla’s price cuts are the biggest among new car dealers. Its more expensive models have taken the biggest hit. The base price of the Model Y is down 20%, starting at $53,000, and the Performance Edition of the car Simmons purchased is down 19%. The Plaid edition of the larger Model S sedan has been slashed by 14%.

Los Angeles-based TV station Austin Flack listed a 2018 Model 3 with a full self-driving beta software package in December for about $51,000, but dropped the price to $36,000 near the end of the year after Tesla withdrew incentives. He said it was down to the dollar. He said he will likely have to bring the price down to $30,000 again.

Jack Bradham, a cloud services developer in Charlotte, North Carolina, said he was upset by the depreciation of the black Model Y long-range car he purchased in December.

Bradham, 46, said in a phone interview that he ordered the car late last year and was told he would have to wait until January to get it. I got a call from , saying that I could buy a car around Christmas. He said he was thrilled with the early delivery and had agreed to buy his $69,000 EV.

Now he said he should have waited as he might have had a discount had he received delivery in January. The same car now costs him $12,000 less.

Bradham said he understands that people sometimes miss out on sales, but the size of the price drop and the lack of communication from the company bothers him.

“Nobody to contact. I called them and tweeted but no response.”

Andrew Checkets, from Santa Barbara, Calif., said he received the seven-seat Model Y in early December after Tesla was “hunting down” him with text messages advertising a $3,750 discount at the time. If he had waited a month, he could have bought the car cheaper.

“I will be installing solar soon,” Checketts said in an email. . He said he drove a Prius instead today.

Tesla’s pricing last year had its ups and downs. The company raised its prices by 5% from his 3% in March. At this time, semiconductor shortages were cutting production across the auto industry, and both automakers and dealers were getting top dollar bills for any vehicle.

The company then slashed its U.S. price by $7,500 in December, which analysts believe weakened demand for its EVs, fueling the stock market crash that lasted most of last year. Tesla’s stock price he fell 69% through 2022.

Tesla also cut prices in the US and China late last year. In his Twitter voice chat on Dec. 22, Musk again hinted at further price cuts to stem the economic headwinds. “You want to sell more or you have to adjust the price downwards,” he said.

Cloud services developer Bradham said Tesla hopes to give recent buyers some kind of break, such as free charging. Simmons said the company should offer fully self-driving capabilities for free.

Still, Tesla owners have little to fall back on.

“I will never buy a Tesla again,” Simmons said. “It says a lot to me. I was a big Tesla fan girl. Go with competitors like Lucid and Rivian.”

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