Experts say the American brand’s over-saturation of the market could be to blame as three of its models were among the five EVs with the worst depreciation over the last 12 months.
Chris Plumb, valuations expert at Cap HPI said that while new electric car sales continued to grow and overall used prices remained solid, used EV prices were contracting, with premium models suffering the biggest drops in value.
The Tesla Model 3 was the worst performing model, according to data from valuation specialists Cap HPI, with an average model losing 23% of its value in the last 12 months, equivalent to £9,900. The larger Model S lost 22% of its value while the Model X SUV ranked fifth for depreciation, losing 13% of its value.
Between the Model S and Model X the high-end Audi e-tron and Jaguar I-Pace lost 15 and 14 per cent respectively over the period. Cap HPI’s pricing relates to 12-month-old examples with 10,000 miles on the clock.
Speaking to Car Dealer Magazine, Mr Plumb said: “It has been well documented of late that new car sales of electric vehicles are going from strength to strength, but this is not replicated in the used car market. Battery electric vehicles remained the most challenging area of the used car market throughout the last month of 2022, as values reduced for the fourth consecutive month.”
Experts are blaming the drop in used EV prices on the sharp increase in energy costs, while Teslas specifically have suffered from an oversaturated market because of the huge numbers of new models being registered. Tesla’s Model Y and 3 were the two most registered EVs in the UK in 2022, outnumbering the next eight combined, and the Model Y was the UK’s third most popular new car in 2022.
Tom Barnard, editor of EV website Electrifying.com said: “We saw at the end of 2022 that the market for new Teslas was saturated, and the company had to heavily discount and pre-register to try to move stock. That will naturally push down the value of older examples.
“Many of the older Model 3s will have been bought on leases and are now being returned after three years, with a large proportion being sold on the open market where they will find a natural price level rather than through the managed Tesla-owned channels.”
Separate data from Auto Trader suggests that demand for used EVs is falling even though overall used car values continued to grow. The online marketplace reported in December that for the first time since the start of the pandemic, year-on-year demand for used EVs was in decline, dropping 12.6% compared with December 2021.
It experts suggested that consumer fears over the rising cost of charging, along with the fact, a used EV still costs around £10,000 more than an equivalent petrol or diesel vehicle could be putting drivers off opting for a second-hand electric car.
Erin Baker, editorial director at Auto Trader commented: “Although current sales figures look positive, the rapid decline in consumer appetite for electric vehicles reveals the market is on thin ice where mass electric adoption is concerned. And with the forecast of new car electric sales reaching 50% being pushed back to 2027 the market faces a precarious combination of factors which could cause major potholes on the road to 2030 without further action from government and industry to encourage mass adoption.
“There are some positive signs with running costs still in EVs favour, and more affordable models in the pipeline, particularly those from Asia. But today’s slowdown in demand for EVs translate into lower sales as we enter 2023.”