During the summer of 2022, gasoline prices more than doubled, which had massive market implications. The value of hybrid and electric vehicles skyrocketed. This, coupled with a chip shortage, meant painful invoices for customers.
During that time and shortly after, you could sell a used Tesla for a pretty penny. But it seems those days are long gone now.
TikToker Chris Pearce (@thechristopherpearce) posted a summary video on YouTuber Kyle Conner’s Tesla ownership. Conner, who posts under the channel Out of Spec Reviews, was shocked at the depreciation of his plaid Tesla Model S. In his clip, which accumulated over 845,000 views, he says the EV owner paid $140,000 for the whip.
“Insane how fast Teslas depreciate,” he penned in a caption for the video.
@thechristopherpearce Insane how fast Teslas depreciate #carnews #tesla ♬ original sound – Chris Pearce
At one point in the video, Pearce pulls the invoice up on the screen. In fact, the total price reads a bit higher at $140,490.
“He just had his car appraised by Tesla,” he says. “Wait till you see how much it’s depreciated compared to a gas car.”
Massive depreciation
Another screenshot, this time of Tesla’s appraisal, pops up on the TikTok screen. What’s more is that Conner didn’t rack up a ton of miles on it, either.
“So with just 37,000 miles on the odometer, Tesla offered him a whopping $46,400,” Pearce states. “That’s a loss of $94,000 or 67% of its original value.”
Pearce did concede that Conner could possibly get more money if he opted to sell the car privately. However, he added that other car appraisal sites still offered less than half the value of what the YouTuber paid.
“The appraisal came straight from Tesla, so it could be a lowball offer,” he says. “But even sites like Edmunds, or Consumer Reports wouldn’t give him more than $59,000 at the absolute highest.”
Gas car depreciation comparison
“I did us all a favor and found a comparable gas to compare the depreciation,” Pearce goes on to say in his clip. “The BMW M5 CS came out in 2022, the same year, for around $140,000 — the exact same price. It’s not a perfect comparison, but they’re both saloon-performance sedans. If you go on any of those sites I mentioned, You can buy the M5 CS for $140,000 today. Meaning this car has depreciated maybe $10,000.”
Pearce then populates his screen with several screenshots of M5 CSs for sale. “The examples keep coming. Lesson here: if you’re gonna buy a Tesla, an expensive Tesla, don’t buy it brand new. Let someone else eat the depreciation for you,” he concludes.
This last bit of advice can generally be applied to the purchase of nearly all new vehicles. Numerous financial analysts, like Dave Ramsey, have said new cars are generally terrible investments. By allowing someone else to foot the bill of that instant new-to-used depreciation, consumers can instantly save.
Tesla: depreciation problem?
According to a March 2024 study referenced by Diminishing Value Carolina, Tesla vehicles depreciate 70 times faster than Chevrolet. GMC and Porsche were other brands with some of the lowest levels of depreciation in the automotive trade. Alfa Romeo, Maserati, Lincoln, and Volvo also had high depreciation levels after Tesla. However, even when compared to Alfa Romeo, #2 on this depreciation report, Tesla’s drop was more than double.
One Redditor who posted to the r/TeslaMotors sub also referenced Tesla’s staggering depreciation drop. A commenter who responded to the post attributed this to the brand’s refusal to allow folks to buy out the leases of their cars.
They wrote, “Imagine how much lower it would be if people could buy out their leases. That’s probably one of the large reason why Tesla doesn’t allow lease buyouts, so that they can have more control over used prices.”
Someone else concurred, stating that they were prevented from purchasing their lease. However, Tesla tried selling them a used vehicle at a much higher price point. “They won’t let me buy out my 3’s lease in June, but they will MORE than happily offer to sell me a car that is identical in every way, including built within a same 3 month window, for about 80% the price of a new one at a 40% markup over the remaining cost/value of my current one. Tells you everything you need to know about why they refuse to offer lease buyouts on 3s and Ys.”
According to the Diminishing Value Carolina post, this isn’t just a Tesla problem, but one with almost all EVs in general. This could be due to technology being newer. Additionally, fears of high mileage service complications and battery degradation could explain low-used sales figures.
TikTokers weigh in
One person believes that Tesla’s depreciation is because the brand is one whose value is tied to its branding. “It’s almost as if Tesla makes a product that has an artificially inflated price because of fanboys that love getting ripped off,” they said.
Another remarked that they were shocked by the steep depreciation decline. “All the commenter’s not understanding that yes cars depreciate, but typically only about 60% over 5 years, losing 67% in 2 years is awful,” they said.
However, someone else mentioned that Tesla has lowered the prices of its cars. In 2022, during the chip shortage, the brand’s vehicles were in high demand. This affected the pricing of its vehicles. “Need to mention that Tesla lowered prices on all vehicles.”
Currently, a new base model Tesla Model S Plaid sells for $83,490 on the manufacturer’s website.
The Daily Dot has reached out to Tesla and Pearce via email for further comment.
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