Hard Lesson As Used Electric Vehicle Prices Crash: Tesla Model Y, Model 3 And Chevy Bolt At CarMax

Resale Value Declines for Used Electric Vehicles

The resale value of used electric vehicles has taken a significant hit, leaving owners shocked and disappointed. In a recent appraisal at CarMax, an owner of a 2021 Chevy Bolt EV was offered only $14,000, nearly half of what they paid just three years ago. This depreciation is not uncommon for vehicles, with most cars losing about 20% or more of their original value in the first year. However, the Bolt seems to have hit 60% depreciation in just three years.

This decline in resale value also applies to other electric vehicles, such as the Tesla Model Y and Model 3. Despite reports of Hertz and Sixt selling off their Tesla fleets, the average listing price of a used Model 3 fell below $30,000 for 2017 to 2019 model years. Tesla's high volume of deliveries during this period contributed to the lower prices. Additionally, a purchase price of $25,000 or less typically makes a vehicle eligible for a federal used car rebate of up to $4,000, further affecting the resale value.

Comparing Different Electric Vehicle Brands

Although the Chevy Bolt appears to be faring worse than other used EV brands like the Ford Mustang Mach-E and the Hyundai Ioniq, this may be attributed to their higher initial prices. The Bolt's lower price point initially may have contributed to its steeper depreciation.

On the other hand, Tesla's used car prices have also fallen steeply since their peak. At CarMax, a 2022 Model 3 with 35,000 miles was priced at $32,000, while a 2020 Model 3 Standard Range Plus with 30,000 miles was priced at $30,000. Comparatively, a new 2024 Model 3 rear-wheel-drive lists for about $39,000 on Tesla's website. The Tesla Model Y seems to be experiencing less price depreciation, with a 2023 long-range Model Y with 10,000 miles priced at $46,000 at CarMax.

It's worth noting that these listed prices at CarMax are likely higher than what CarMax actually paid for the vehicles, indicating potential room for negotiation. However, the overall trend of declining resale values for used electric vehicles is evident.

Factors Affecting Resale Value

Several factors contribute to the depreciation of used electric vehicles. The first year after purchase typically experiences the most significant depreciation, with vehicles losing about 20% or more of their original value. This decline continues over time, with cars often shedding about 60% of their original purchase price within the first five years.

Additionally, the availability of federal tax credits for new electric vehicle purchases may impact the pricing of used electric cars. The recently introduced $7,500 federal tax credit for electric vehicles could potentially affect the resale value of used vehicles, as buyers may factor in the availability of this credit when negotiating prices.

Overall, the decline in resale value for used electric vehicles serves as a cautionary tale for potential buyers and highlights the importance of considering long-term depreciation when making an electric vehicle purchase.