Tesla Model Y And Model 3 Lead The Way As Used EV Prices Keep Falling

Used EV prices continue to sink as car prices keep dropping overall.

As a harbinger of used car prices, the U.S. new-vehicle average transaction price in January was $47,401, down 2.6% from December 2023 and down 3.5% compared to January 2023, according to Kelley Blue Book. It’s more dramatic for new electric vehicle prices. The average price paid for a new electric vehicle in January 2024 was $55,353, tumbling 10.8% year over year, KBB said.

Cause and effect: That in turn shapes the price of used EVs, a booming market due to a flood of vehicles hitting dealer lots. As of February, “year over year, used EV prices have fallen 24%, with Teslas losing the most value in that period,” Liz Najman, lead researcher at Recurrent, told me in an email. “Looking at just the past few months, Tesla values are still dropping faster than industry average and faster than many of their competitors, such as Ford, Nissan, Chevy, and VW,” Najman said.

Year over year, Tesla, Audi, and Jaguar are seeing the biggest price decreases, Recurrent said. That includes the Audi e-tron Sportback, the Tesla Model X, the Tesla Model Y, Audi e-tron (non-Sportback), Jaguar IPACE, the Tesla Model 3, and Tesla Model S. Since January, price decreases are led by the Hyundai IONIQ 5, Kia EV6, the Tesla Model 3, and Tesla Model Y. On Tesla’s used car website, Model Ys are priced starting at under $30,000. Hertz is also selling off its inventory of Model 3s with prices starting well below $20,000.

Chevy Bolt price crash as glaring example: The price of a used Chevy Bolt — the No. 3 bestselling new EV in the U.S. last year behind the Tesla Model Y and Model 3 — is down 30% year over year, Najman said. To piggyback on Recurrent’s data, I’ve experienced this price crash first hand. When I took my 2021 Bolt to CarMax in Los Angeles in September of 2022, I was offered around $28,000. In February of this year, CarMax offered me $14,000. A whopping 50% price drop. And a friend who purchased a new 2023 Chevy Bolt EUV Premier Redline in January for $38,950 has already seen the price sink to between $23,500-$25,500 for a private party sale (and $21,000 for a trade-in) despite the fact that it’s still virtually brand new with just a few hundred miles on the odometer. And this kind of EV price collapse is not limited to the Bolt by any means.

Note that some of the steep depreciation may be due to the point-of-sale $7,500 tax credit — essentially a rebate — available to new EVs in the U.S. as of 2024. For example, the Chevy Bolt EUV cited above received the $7,500 credit. That was after taxes and fees (i.e., $7,5000 was subtracted from the $38,950 sticker price plus approximately $5,000 in taxes and fees and for extras that came with the car). That said, I did not get the credit on my Chevy Bolt purchased in 2021. But all used EV prices seem to be impacted by the new EV credit in some way.

Price drops finally leveling off? Used EV prices are leveling off, however, according to Recurrent’s Najman. The average decrease across all brands from January to February was 2.5%, less than the 2.9% decrease from December to January, Najman said.

If you’re in the market, don’t forget the used EV tax credit: If you buy a qualified used electric vehicle or fuel cell vehicle from a licensed dealer for $25,000 or less, there is a potential credit equal to 30% of the sale price up to a maximum credit of $4,000, according to the IRS. That could potentially bring down the price of a $16K used Chevy Bolt, for example, to around $12,000. Or a $20,000 Tesla Model 3 — now being sold by Hertz, for example, to around $16,000.