Why are used Tesla Model 3 prices collapsing?

If the Tesla Model 3 have so far resisted the classic discount of used vehicles very well, for the past few weeks, it’s been a free fall. Let’s try to analyze this phenomenon and understand what causes it.

Tesla model 3 Propulsion-7
Source: Anthony Wonner – Frandroid

The price yo-yo of the Tesla Model 3 is an event known to many since its release in France at the beginning of 2019. Many owners have taken advantage of periods favorable to resale abroad to manage to change their low-cost vehicle, sometimes even earning money in the operation.

However, those times seem over, even though new entry-level Tesla Model 3s have never been so expensive. As we will see, the reasons for the fall in second-hand prices are to be sought elsewhere, in particular on the side of the Tesla Model Y Propulsion which is arriving on the market.

An inexpensive Tesla Model 3 until the beginning of 2022

Today displayed at 53,490 euros, the Tesla Model 3 Propulsion has never been so expensive new, and paradoxically so inexpensive on the second-hand market. One of the most popular electric vehicles of recent years was a hit in 2021, thanks to eligibility for the maximum ecological bonus of 7,000 then 6,000 euros, which made it possible to drive a Tesla Model 3 Propulsion for less than 38,000 euros .

Tesla model 3 Propulsion-1
Model 3 Propulsion // Source: Anthony Wonner – Frandroid

This French tariff, almost unprecedented in Europe, particularly delighted some importers in the Nordic countries, who easily resold more than 50,000 euros of almost new Tesla Model 3s bought from French people who had paid them considerably less a few months earlier.

The market took a turn in the summer of 2022, together with the release of the Tesla Model Y Propulsion, which reshuffled the cards. Its current price of 49,990 euros makes it eligible for the ecological bonus of 2,000 euros, and places it under the Tesla Model 3 Propulsion at 53,490 euros.

Therefore, many potential Tesla Model 3 buyers are falling back on the cheapest new Teslawhich has important consequences on the second-hand market, as we will see.

A very rapid change in the second-hand market

The current situation is quite unprecedented. Indeed, until the summer of 2022, Tesla Model 3s were almost more expensive on the second-hand market than new, a phenomenon which we have also come back to in detail in this dossier.

Although new prices have not fallen since for the Tesla Model 3, second-hand prices have fallen considerably. At the time of this writing, there are no less than 1,180 Tesla Model 3 for sale on leboncoin, with more than 70 vehicles for sale under 40,000 euros. A buyer therefore has every opportunity to select the least expensive vehicle corresponding to his criteria.

A few Tesla Model 3 are available on leboncoin at 38,000 euros

A few weeks ago, buying a used Tesla Model 3 at 40,000 euros was unthinkable, since the resale to foreign importers was done at a much higher price. If the new Tesla Model 3 is now offered at a minimum of 53,490 euros, a new Tesla has arrived on the market at a more aggressive price: the Tesla Model Y Propulsion.

Since the sale of the entry-level electric SUV at a very attractive price, the rating on the second-hand market of the Tesla Model 3 is in free fall, whether between individuals, or at the level of trade-ins. by professionals. Professionals in the sector have sometimes accumulated dozens of vehicles which today do not find takers.prompting them not to buy new ones, lest stocks keep growing.

Disaster sales to finance the Tesla Model Y Propulsion

At the end of August, when the Tesla Model Y Propulsion was released, some owners have made trade-in requests for their Tesla Model 3 to Tesla, with some nice surprises in store. In practice, Tesla Model 3 Propulsion purchased for less than 38,000 euros were sometimes taken back by the manufacturer at 47,000 euros or more, which made it possible to take the plunge and switch to the Model Y Propulsion for less than 1,000 euros.

The auto market is really crazy today…

We bought our car almost a year ago for €35,350. Today, Tesla is offering to take it back from me for €42,700! 😳

This is almost €2000 less than the nominal price at the time (excluding bonuses and premiums). pic.twitter.com/8VTH9dafDz

— Nicolas (@nicolasfurno) May 13, 2022

Nevertheless, the recovery estimate is not a firm commitment from the American firm, and the latter may be reassessed closer to the final delivery of the vehicle ordered. Consequently, recovery estimates dating from August at the time of the order will be updated and will become contractual around November, and unpleasant surprises will probably result.

Indeed, the estimates of recoveries currently at Tesla are not at all what they were a few weeks ago, with sometimes more than 10,000 euros lost depending on the configuration. In practice, those who therefore ordered a Tesla Model Y Propulsion in August thinking of changing their Tesla Model 3 Propulsion for a few thousand euros at most will have to review their plan.

For some people who have ordered a Tesla Model Y Propulsion, the cold shower is even freezing // Source: Forum Automobile-propre

If Tesla is not the only professional to take back its vehicles, foreign importers have however come to the same conclusion as the firm of Elon Musk. The good old days of trade-ins at more than 45,000 euros for vehicles paid for less than 38,000 euros in France are over.in particular because of the recent volume of accumulated vehicles which no longer find takers at such a rate.

For current Tesla Model 3 owners who have a Tesla Model Y Propulsion on order, there is an urgent need to sell their vehicle to finance the American SUV. With the first deliveries announced for November, there is not much time left to avoid being stuck with a Tesla Model 3 that would not be sold.

Conclusion

However, it cannot be ruled out that this situation is only temporary, with a rise in prices once the first wave of Tesla Model Y Propulsion deliveries has passed. The end of autumn will undoubtedly be decisive for the second-hand Tesla Model 3 market.

While some will simply cancel their Tesla Model Y Propulsion order, others will likely agree to let go of their low-cost Tesla Model 3, which will be a great deal for buyers.

The current state of the market is not representative, because the volume of Tesla Model 3 on sale is far too large, given the number of potential buyers. Against the backdrop of rising electricity prices at home and on the road, some doubt the switch to electric cars at the moment, which can also drive prices down.

Finally, if the prices of the Tesla Model Y Propulsion will soon be revised upwards, the market for the Tesla Model 3 could as well go up. After all, it doesn’t make sense that Tesla’s SUV is less expensive than the sedan in France, since this is not the case in the majority of countries. If you want to part with your Model 3 and you have time ahead of you, wait a few more months.

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