Tesla (TSLA) brand damage is destroying used car value: ‘People don’t want them anymore’

Tesla’s brand damage is eroding the value of used Tesla vehicles at a rapid rate, as owners rush to sell theirs.

It is breaking the used Tesla market as prices are plunging just as the broader used car market is recovering.

After a few tough years for the used car market following the pandemic, it is finally starting to recover over the last month.

Economic uncertainty and a fear of higher inflation due to Trump’s tariffs are prompting some buyers to shift from the new car market to the used car market.

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From March 2024 to March 2025, average used car prices decreased by 2.68% in the US, but the trend has finally reversed.

According to Car Guru‘s used car index, used car prices have risen an impressive 2.17% in the last 30 days alone.

However, there’s an exception: Tesla.

The price of used Tesla vehicles has been falling, like the rest of the used car market, since the pandemic; however, it is not benefiting from the reversal in the current macroeconomic situation.

While average used car prices rose more than 2% in the last 30 days, Tesla’s used car prices decreased by 1.34% in the US.

That’s due to oversupply, as many Tesla owners are selling their vehicles to distance themselves from the Tesla brand, which is associated with CEO Elon Musk and his increasingly divisive political views.

The demand to sell used Tesla vehicles is so high that many used car dealers, who had been fighting to acquire inventory just a year prior, are starting to be reticent about buying Tesla vehicles as the value decreases so rapidly.

In Quebec, Le Journal de Montréal spoke with local used car dealers and attended a car auction where many Tesla vehicles were up for sale, with some selling for half the price they were selling for just over a year ago.

Éric Piuze, owner of a used car dealership on Montreal’s South Shore, said (translated from French):

“People don’t want them anymore. The Elon Musk effect is very real in Quebec.”

The used car dealers at the auction noted that they are not confident they can sell the used Tesla quickly enough to avoid further value decreases.

Furthermore, they note that potential buyers are lowballing on Tesla vehicles because they are aware that inventory is high, creating a buyer’s market.

Dealers are also seeing higher defaults on Tesla car payments, as buyers who took on debt to purchase them just a few years ago struggle to make payments.

Piuze added (translated from French):

People paid a lot of money for Teslas. During the pandemic, we saw many people remortgaging their homes to buy a Tesla. Those days are over.

At its peak, the average used Tesla price was over $60,000 in 2022. Now, the same vehicles are worth a fraction, but their car payments are still high.

Electrek’s Take

Even with the used car market finally getting a breather from crashing prices, Tesla vehicles are not benefiting at all. This highlights a significant issue in the used Tesla market. It’s broken.

The market can’t absorb the surge in people selling their Tesla vehicles.

I wouldn’t want to be a company holding a fleet of Tesla vehicles right now. The value erosion is impressive.

I thought that maybe the Cybertruck was dragging the entire Tesla market down, with a 6.64% decrease in used value over the last 30 days. However, the Model Y alone saw a 1.67% decrease during the same period.

The good news is that the vast majority of people selling their used Tesla vehicles are purchasing other electric vehicles, thereby boosting the EV market. It’s also giving people the chance to get into Tesla vehicles for cheaper, although they should expect the value of those vehicles to decrease rapidly.