Falling Prices Stir Concern for Tesla’s Model 3

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.

Haye Kesteloo
Haye Kesteloo

Haye Kesteloo is the Editor in Chief and Founder of EVXL.co, where he covers all electric vehicle-related news, covering brands such as Tesla, Ford, GM, BMW, Nissan and others. He fulfills a similar role at the drone news site DroneXL.co. Haye can be reached at haye @ evxl.co or @hayekesteloo.

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