Used Teslas (TSLA) in the US and Britain are falling in price faster than other electric vehicles — but the decline appears to be driven primarily by a glut of formerly leased cars coming on to the market rather than by the brand’s association with Elon Musk.

US prices for second-hand Teslas dropped 7 per cent year-on-year in March, according to data from online marketplace CarGurus, against a 1.5 per cent decline for other EV brands. In the UK they fell 15 per cent, more than the general 10 per cent slide for all used EVs, according to sales platform Auto Trader.

The falling prices come amid suspicion that Tesla’s brand is being damaged by Musk’s emergence as a figurehead for the American far right and a confidant of US President Donald Trump, especially given that EVs tend to be more popular among left-of-centre voters.

Edmunds, a US car shopping site, has reported a sudden rise in the number of post-2017 Teslas being traded in at dealerships — accounting for 1.4 per cent of all trade-ins in mid-March, up from 0.4 per cent in March last year.

However, Kevin Roberts, director of economic and market intelligence at CarGurus, said the US sales data suggested “an influx of former fleet vehicles have caused the average list price of a used Tesla to drop”. He added that price cuts for new Teslas since 2023 were also weighing on the second-hand market.

Meanwhile, Auto Trader’s commercial director, Ian Plummer, said the drop in UK second-hand Tesla prices appeared to be driven by a large cohort coming on to the market that had been bought new on finance — with 5,400 used Teslas listed on the platform in March, up from 2,900 a year earlier. 

Plummer pointed to evidence of “strong levels of demand for used Teslas” in the UK, where they are selling after an average of 23 days on the market compared with 29 for the average EV on the platform. 

An FT analysis of used Tesla prices in Germany, where Musk intervened on behalf of the far-right Alternative for Germany party during this year’s federal election, has also detected no shifts in the first quarter of 2025 in the number of Teslas offered for sale, their ages or asking prices. 

However, the brand is certainly under pressure, with Tesla’s new car sales falling well short of market forecasts. Official statistics suggest that first-quarter sales were down 55.2 per cent in Sweden, 49.7 per cent in the Netherlands, 41.1 per cent in France and 25.5 per cent in Norway.

This has contributed to Tesla’s worst quarter since 2022, with the group delivering 336,681 vehicles in the first three months of this year — 13 per cent fewer than a year earlier and well below the 390,000 expected by analysts.

Ryan Brinkman, auto analyst at JPMorgan, said Tesla’s most recent delivery numbers were “far below even our low-end estimate, confirming the unprecedented brand damage we had earlier feared”.

“The trend in Tesla sales is worse than we and the market had appreciated,” added Brinkman, prompting the broker to “lower our already below consensus estimates” for the group. 

But Alexander Potter, a senior research analyst at Piper Sandler, disagreed, writing in a recent note that the “brand damage is overdone”.

While Potter acknowledged that “all else equal, Musk’s political endeavours are probably a net negative for deliveries”, he argued that a bigger issue was supply-side, after “multi-week shutdowns” hit “all four of the company’s Model Y factories”.

Much rests on the reception to the refresh of the Model Y, Tesla’s best-selling car, which analysts hope will breathe life into an ageing line-up. 

Harald Hendrikse, an analyst at Citigroup (C), suggested customers may be delaying purchases ahead of the revamp.

A further challenge for Tesla is increased rivalry from overseas automakers, according to Hendrikse, with the US brand now facing “much stiffer competition from Chinese and other Asian peers, who are taking share with an influx of new, high-tech and relatively affordable EVs”. 

This point was underscored in March when shares in China’s BYD (BYDDY, BYDDF) touched a record high after the company said it had developed a platform capable of charging EVs in the time it takes to refuel a regular petrol car. Tesla’s shares, in contrast, are down more than 40 per cent this year, having given up a post-election bounce.

Additional reporting by Zdravko Hvarlingov in Sofia

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