As Elon Musk continues to play a significant and controversial role in the U.S. government, reports of harassment of Tesla owners and vandalism of showrooms and vehicles are on the rise. This may have contributed to the plummeting resale value of used Teslas in the U.S. and waning consumer interest. Despite attention from former President Donald Trump, Tesla's stock (TSLA, Financial) has erased all gains since the election. Last year, Tesla reported its first global sales decline. In the U.S., Musk faced opposition for his cost-cutting actions in the federal government.
A March survey by Cars.com found that despite record-low prices for used Teslas and high-profile promotion by the U.S. President, these vehicles remain hard to sell. Searches for used Teslas dropped by 16% in the last month, while demand for other used electric vehicles grew by 28% over the past year. CarGurus reports that the price decline for used Teslas is more than double the average for regular used cars. The controversial Cybertruck performed the worst, with a resale value 58% lower than its original price.
Owners looking to sell their Teslas struggle to find buyers willing to pay a reasonable price. Some regret purchasing a Tesla due to reports of vandalism and protests against Musk. A California owner expressed willingness to sell her Tesla at a fair price but doubted it would happen. An Ohio owner sold her Model Y at a significant loss, citing Musk's political activities as a factor.
It's too early to determine if Musk's political actions are affecting new Tesla sales in the U.S. However, multiple factors contribute to consumer avoidance of even cheaper used Teslas. Despite anecdotal evidence, there's no clear link between attacks on Tesla vehicles and facilities and any potential sales loss. The company was excluded from the Vancouver Auto Show due to security concerns.
Analysis shows Tesla's loyalty is declining in Democrat-leaning states, while slightly increasing in Republican-leaning states. Trump's administration appears to protect Tesla's reputation, with Trump publicly supporting the brand. Market competition is also a factor, with 76 used electric vehicle models available in February, up from 58 a year ago. Tesla's price cuts in the new car market affect used car prices, as dealers can't maintain high prices when new car prices drop. About 70% of used electric vehicles are leased, leading to a simultaneous influx of used Teslas on the market.
