An interesting development has surfaced in the world of electric vehicles as Tesla grapples with a potential demand issue for one of its star models. It’s a situation that warrants the attention of investors and the auto industry alike.
Recent data, pulled from used-car site Cars.com, uncovers a downward trend in prices for Tesla vehicles. Notably, the drop is steeper for a particular model, signaling a potential wane in its popularity. The analysis shows both new and used car prices have slipped, some by up to 20% year over year. While price cuts and market normalization account for some of this trend, a worrying sign emerges for the Model 3.
Both Models S and X, despite a price slump of over 30% from last year, aren’t the point of concern. Their declining prices can be attributed to their increasing age and limited volume. The focus, instead, shifts to the Model Y and Model 3.
“A year ago, a used Model Y listed for almost $73,000 on Cars.com,” the data reveals, according to Barron’s. Yet, the situation has normalized, with today’s average price for a used Model Y settling around $49,500. This change might have suggested a demand issue for the Model Y. However, with the average age of a Model Y increasing by approximately a year, the depreciation aligns with standard car value loss.
The spotlight then firmly lands on the Model 3. Last year’s average listing for a used Model 3 was nearly $52,000, slightly higher than a new one. Fast forward to today, the average listing has plummeted by about 25% to roughly $38,000, despite the cars being younger on average and the new Model 3 price has dropped by only 6%.
This depreciation points towards weakened demand for the Model 3. One contributing factor could be its age, with the Model 3 hitting the market back in mid-2017, a significant duration in the automotive world.
However, hope springs as rumors of a Model 3 refresh circulate. Similar actions for the Model S and X, specifically the introduction of the Plaid editions in late 2021, effectively revived sales. Now, whispers of a revamped Model 3 are causing a stir, potentially signaling a boost in demand on the horizon.
The extent of the Model 3’s refresh, whether it involves a full redesign or software and minor upgrades, remains to be seen. Nonetheless, the impact of this update on Model 3 sales will undoubtedly play a pivotal role in shaping Tesla’s future and the broader EV landscape.