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The slowdown in electric vehicle sales continues to snowball, with plummeting resale values posing a new hurdle.
According to car search engine iSeeCars, the value of used EVs has fallen faster than gasoline-powered cars over the past year. The average price of used electric cars fell by up to 32%, and the average price of gasoline cars fell by 3.6%.
Declining resale values are compounding buyers’ fears that EVs aren’t worth the price or could be a headache. They are already concerned about EV prices, charging, lack of options, and range. Now they’re worried that when it comes time to sell the car, they won’t get much back.
“Consumers used to not care about the resale value of EVs, but with[Tesla CEO Elon]Musk’s price cuts, people feel like they owe Tesla $50,000 and now Now it’s only worth $40,000,” Pat Ryan said. CEO of free car shopping app CoPilot. “When people see the value of EVs drop so dramatically, new problems arise.”
How did Elon Musk drive down the resale value of EVs?
Musk has aggressively slashed the prices of Tesla’s new cars by more than 20% in an effort to maintain market share in the increasingly competitive EV market. These price drops put pressure on the used EV market overall, but particularly affected his own vehicles. According to iSeeCars, the four cars with the largest price declines across the used market from 2023 to 2024 were Teslas.
“Elon’s desire to maintain new Tesla sales by lowering prices has had a very disruptive impact on the brand’s residual value,” said Karl Brauer, executive analyst at iSeeCars. “Used Teslas lost more value than any other brand, dropping 28.9% and losing more than twice as much value as second-place Alfa Romeo.”
Give me what I want:Electric car buyers don’t want what’s on sale, and that’s hurting sales, poll says.
What’s next for EVs?
Experts say EV prices appear to be stabilizing. So if you’re considering buying one, you may end up buying one without paying more than a gas-powered car.
According to Cox Automotive, the average transaction price for a new EV at the end of 2023 was $50,798, just $2,040 more than the $48,759 for a gasoline-powered car.
In the used EV market, prices are hovering just below gasoline-powered cars, and could fall slightly in the coming months. According to iSeeCars, the average price for a used electric car in February was $30,904, compared to $31,153 for a used gasoline car.
“Used car buyers with a budget of $31,000 now have access to most models, regardless of drivetrain,” Brauer said. They “can now make decisions based on factors beyond price, such as range and convenience.”
Concerns about range and convenience continue to deter many Americans from purchasing EVs.
“The fear of running out of juice without a charging station in sight is as much of a concern today as it was five years ago,” said a January report from Kelley Blue Book.
Medora Lee is USA TODAY’s money, markets and personal finance reporter. Please contact us at mjlee@usatoday.com. Subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
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