Note that I filmed this video on Monday, before Tesla's announcement this week that they're significantly cutting prices on all their new models -- a move that will only further serve to significantly reduce the value of used Teslas.

I think there's also a fifth point: Increase used car supply due to 3 year lease returns. The Model 3 came out as a 2018 model year, but in the beginning production rates were really low so not a lot were made/sold. We are at the point where a decent supply of leases are expiring.

You know what's a huge deal breaker for me? the freaking enormous repairing prices on any random thing like a door handle compared with a "normal" car. Not to mention the fact that as a car guy, I would like to change some of the broken parts myself like a tail light for example, not be forced to go to their service. Fast acceleration and some gimmicks can't replace what some of us really want from a car.

Another factor you forgot to mention is the long list of service issue, delays and price gouging on repairs, replacement parts and bricking some used cars. This has a big effect on people looking for moderate ownership costs. Many other luxury cars drop like rocks from some of these issues.

Here in Britain, electricity prices have skyrocketed (about 42 US cents per kWh) making EVs less attractive compared to gas , plus in the 22/23 winter there was a lot of press coverage of long queues at the small number of Supercharger sites as Tesla range fell in the cold weather. The charging infrastructure in Britain just isn't ready for mass EV ownership, despite our utterly corrupt politicians banning sales of gas cars from 2030

In Australia they dropped about 10% in the past 3 months as I've been following the prices closely. I also happened to test drive a model 3 in early Dec and I've asked for their prices of pre-owned 2021 and up, and the guy said the cheapest one they have is $67k aud. To which I said 'no thanks because online they are $10k cheaper'. He almost fell off his chair and immediately went to check for himself lol. But since then the same cars I saw 6 weeks ago are still for sale and they are dropping even more.

You forgot to mention how former Tesla customers left the brand because of the HORRIBLE customer service & car repair service. We were a 2-Tesla vehicle household who just had enough of their uppity attitude in dealing with customers and how they handle servicing those cars!

I had a Model Y on order. I let it drop for a number of reasons: self driving doesn't work well enough and got worse after radar was removed. the Fremont Y has a bent frame so body panels and doors don't fit and rattles and squeaks cannot be fixed and there is no sign that Austin Ys will be available. the value of the cars drops to zero after the 8 year drive train warranty runs out because of the potential cost of replacement of battery, drive units etc.

Love when Doug’s inner economist shows - more analysis like this in the future please.

The one thing that also has a big impact that you did not mention is the federal $7,500 tax credit and price cuts which makes all model 3 and most model Ys much cheaper. Examples: Dual Motor 5 seat model Y was 65,990 now 45,490. Model 3 Rear Wheel Drive was 46,990 now 36,490. Model 3 performance was 62,990 now 46,490. With these changes used car prices will continue to go down unless wait times for new models gets much longer again.

Locally, the demand for EVs in general, has really fallen in my area after hurricane Ian. For several weeks people were not able to charge their cars without power while gas stations continued to operate with generators running the pumps. Tesla certainly has the advantage with its charging infrastructure, something I didn’t realize until living with my Mach-E for 8 months before selling due to the unreliable charging infrastructure anytime I traveled. But, without electricity neither has the advantage. Just something to consider before buying an EV if you live in a disaster prone area.

Definitely keeping an eye out! I wanted a model Y almost a year ago, and a used one was 70K OTD. If I could score one under 40K, that would be a phenomenal daily commuter!

I will add another factor: my 4 year old model 3 still costs $2000 for annual insurance. As new buyers become more informed, fewer and fewer people are willing to pay that kind of insurance - it effectively cancels out a big chunk of gas savings, if not all of it.

With the recent price cut, a new model 3 performance now can qualify for the $7500 federal tax credit + $4000 tax credit in NJ if you configure for less than $55k. That means a new model 3 performance with barely any wait list can be bought for $45k after fees including credits. Edit: The NJ rebate is $2k for vehicle prices between $45k-55k and $4k for below $45k. It is offered point of sale.

Increased competition is definitely one of the reasons. I used to want a Tesla cus it was electric and thr technology seemed great, but now these other brands offer more in my opinion. The design is just more attractive in the other brands than Tesla's. Especially when you talk about teslas build quality.

I'm a used car dealer I don't agree with anything you say other than the price of borrowing money has gone up dramatically which keeps people from buying luxury purchases and limits what they can afford.

I think the biggest factor that you mentioned is the waiting list. We've seen this same practice in the consumer technology market over the last few years. Low supply/high demand and waiting lists results in a large number of people purchasing the product with the intent on flipping it for profit. The manufacturer pushes to increase output but as long as this scenario holds true, it creates a positive feedback loop with rapidly increasing supply. Once one of the factors changes and demand drops you end up with a rapid swing of the pendulum back the other way, flippers are caught holding the bag, no one wants the products anymore, and there are a ton of them out there, over supply and under demand. Rapid price drops are the result.

You make a good point that when used model 3’s start hitting the $20k mark, that’s almost too good to pass up. It’s a lot of car for the money and that will have the effect of devaluing used Leaf’s, Bolt’s and other cheaper ev’s. I just got done with a 2021 Leaf SV with Pro-Pilot and it is no comparison to a model 3 in any way…these are listed in the high $20’s on dealer lots as comparison.

Why why why? No one is talking about battery life? Batteries can last 7 to 10 years, and then they either can't hold a charge or diminish from holding a charge significantly. 🤔 So people just get rid of the car before paying 20k for a new battery on a Tesla. People are offloading these older Tesla, and the market is becoming flooded. Like the housing market in 2008, when everyone offloaded their homes because the principal on the mortgage payments were due and nobody now could afford the payments. It is similar here as the market gets flooded with older EV, to many cars like there were too many houses, causing housing prices to drop dramatically, and in this case, Tesla.

Single largest factor is the fact that supply is catching up with demand. His quantities out of his new factories have greatly increased the number of cars available. It's no longer a rare unique thing as I see Tesla vehicles everywhere now. He's run out of trend followers, but he has plenty of rank and file masses that currently drive regular internal combustion engines that may be ready to switch as long as somebody fixes the charging station problem. It's time for filling stations to convert to charge stations.

This is nice! 2-3 car reviews per week + More Doug 1-2 videos per week. PS: I miss car spotting with Doug! 😅

Interest rates today are ridiculously high compared to just a couple of years ago. So automobile sales across the board should continue dropping until interest rates go back down. All you need to do to confirm this phenomenon is look at declining home sales, which also heavily depend on interest rates. 🤷

Plaid owner here and have to say service has been horrible. 10k miles and already replacing motor (left me stranded in middle of road), falcon doors repair 3x, dirty beat up loaner cars, overall crappy experience for a $140k car!

Funny thing is Elon didn't found Tesla-- he didn't even write the business plan. Crazy history.

The Supercharger is so far ahead of public networks that it's not even feasible to own an EV for road-tripping other than a Tesla. You are right about Tesla's cars needing updates, but if you want to enjoy an electric BMW, Ford or Mercedes, you need to know that he charging experience is not only miserable for non-Teslas, but rapidly getting worse. Overburdened and under maintained networks from EA and EVgo are the norm. The biggest issue is that they lie to users about being online and you arrive with no charge to find them broken. Best advice: buy a used Tesla and enjoy the Supercharger network until this mess is resolved.

The interest rates are what I think of most ... I got 2.65 on a used luxury car in 2021. Now I see loan estimators on websites estimating 9% or more for excellent credit 😳

I believe that you are missing the obvious. 2 bad things about any EV; 1. They require recharging often that takes time compared to filling your tank with gas, this also limits range; and 2. There will be a day, 5 - 7 years down the road (pun intended) when the battery has to be replaced, and that battery is at least $15,000.

I got my Model Y in Iceland December 22. Teslas were not depreciating at that time and holding value very well. Delivery time was 1-3 months. From what I know cars where not often "available now" ie. someone decided not to take delivery. When I came in to Tesla Iceland I could choose from 2 cars. A few hours later I was offered yet another car (which bought). Thinking back this is very suspicious especially since the car was about to increase about $4000 in price in the new year because of tax changes. So now I'm thinking - who knew about this? Did Tesla Iceland tell friends to not to take delivery and they then passed the cars on to suckers (me)? This feels like a sort of insider trading thing. I can not see any difference in selling company stock you know for a fact is going to decrease in value and selling a car that you know is going to (abnormally) depreciate in value. Legally it seems to be different but ethically I can not see a difference. I suspect why this is legal and insider trading is not is that insider trading affects people that have money and power. A new car is for most people the second most expensive thing they will buy. Besides the money I feel I got robbed of the joy of getting and owning a new car. I like the car but I also hate it. Anyway my blood will stop boiling at some point but I find it very unlikely that I'll buy another Tesla.

I think this is a good explanation. Coming from someone who runs a new vehicle dealership. I believe the waiting list point is the biggest reason for used prices declining. This is true across the entire auto industry.

This is spot on. You have to be a Tesla Fanatic not to look at some of the other options out there and realize you can get better than Tesla.

To Be Honest, they have various bugs in earlier models, wonder if the Quality has changed, not it’s got COMPETITORS

The main factors are major competition coming on line including many vehicles with more conservative interiors/styling and lower prices and the realization they don't work well in long cold winters plus no way to charge them durring major power outages.

I remember when the Prius was fairly new and they were selling for 20-22k in DC while my parents, living in San Diego, were seeing people paying 35k for the same car was in much. higher demand in San Diego. Once everyone who wanted one got theirs, prices settled where they are today. At this point, I feel it's fair to say that the line of people waiting to get a Tesla has shrunk and everybody who wanted one has already had an opportunity to buy one. Also, as people become aware of the MASSIVE cost of battery pack replacement with the cars being out for a while, some of the shine has come off of Teslas on the secondary market since not a lot of people are going to overlook a possible future repair bill the size of a new Corolla and not factor than into their valuation of a used car.

One of the biggest things to consider before buying a Tesla is service. Any little mishap and the car can spend months and months at a specialized Tesla service center.

Rocketing high inflation worldwide = less purchases on products that are nonessential, to buy new you must get rid of one, used haven't been selling...

There was a long phase in Germany and Austria where a Model S would not drop under 40.000€ no matter what was wrong with it, huge mileage, door handles not working, end of warranty … etc. the demand was just so crazy high. wait nothing has changed : D

Fantastic news, as supply lines start normalizing I can't wait for cars to be affordable again.

you have to compare the used car depreciation to pre COVID levels, they raised their prices like 7 times during COVID so it seems like their depreciating faster than normal but its just coming back down to pre COVID levels

One factor is more competition in the market. Elon's politics are also an issue because many right winger reject electric cars because they think is a liberal plot to ban gas vehicles. He kinda shooting himself in the foot.

Boy that's a lot of good, unsubstantiated and completely anecdotal guesses Doug. You really think that there are SO many investment brokers and mortgage lenders own Teslas that they'd sway national/international Teslas prices? This screams "I live in a neighborhood with rich people and they drive Teslas so obviously this is how it is everywhere".

Another nice video Doug. We have a 2022 Model 3 and still love it, lol. You’re still right on with your assessment. We ordered ours 18 months ago and have had it for a year. As of today a new one is actually the same price we locked in on 18 months ago. It was a crazy carpet ride of misguided values since then. It has now come back to reality. Always enjoy your stuff Doug, please keep it coming !

Between the rebates and the price cuts which started in December a new Tesla is 15K cheaper than in November. I think that explains it.....BTW love the channel!

Well put on all fronts and spoken in a clear concise way. I hope they keep tanking....I want a salvage 3 performance project in my life.

Also, another minor factor may be the increased media attention on Tesla fires. I’m not sure if Teslas are catching fire at a higher rate than other EVs but they’re certainly getting more media attention.

There’s a couple of points that you missed. 1. Abysmal build quality both in general and for its price point (and no, its performance isn’t suffice to compensate for its build quality) 2. Reliability issues, epically for the Model X, Model Y, and Older Model S

The market was crazy.... I had a 2014 Lexus LS460, I paid $18,500 for it 3 years ago, in September I got hit and it was totaled. The insurance company gave me almost $26,000 for the car. I've never had a used car that I held on to for over 2 years and made ANY TYPE of profit, never mind almost $7500 That is what the values were, getting a replacement was very hard even at that money.

there's also the fact that Tesla service and customer service is way below average, with excessive waiting times for parts, "rules are rules" mentality with customer service, appointments excessively getting set back, and absurd failure rates for important car features like seat controls and anything relating to the center screen. It's not just the reputation of the company that's causing the plummet in prices, it's the unreliability of the cars not only as they get older but as more people get laid off and those that remain care less about what they're working with

There might be an economic turmoil but there is no doubt that this is still the best time to invest.

I personally like the fact that he's exposing the FBI and CIA.

They are just to boring now. I feel most people don’t want everything inside the screen too. Most people want buttons. It’s so much faster and easy to access while driving. Also not having a driving cluster in front of you is a huge shock to most people. How hard can it be to add a cluster? And modify the looks every 5-6 years

It doesn't help Tesla prices when they try to charge a guy to repair a manufacturing defect, and it doesn't help that his steering wheel came off in his hands either. Add that to Tesla being a shit company, run by a shit person, pushing an inferior product, and you get a pretty comprehensive look at why a lot of people want nothing to do with it.

20% of electric car owners say they regret the purchase, and won't buy another electric car.

Missed one reason. I know more than a few people that own, or have owned, Teslas that are very dissatisfied with their customer servise at their shops when something needs to be repaired. From what I have heard this is something that goes for most of the countries Teslas are sold in. Here in Norway they have been the bottom brand several years when car owner are asked to judge their cars and the retailers and shops. People notice this and choose other brands instead.

DOUG: "the only innovation is the yoke" Me: Plaid motor? 4680? GIGA CASTING? FSD? Tesla/Dolby audio? Steam games? Zoom app? I can go ford days Doug...

Doug channelling Wallace of Wallace and Gromit fame with the random arm thrashing and twitching fingers.

Tesla prices are actually still decently stable, according to a news article I read. Yes they are dropping but used teslas are still keeping there value despite tesla dropping prices

This video was really fascinating! I’d love to see more auto market analysis videos from you in general. You bring a unique perspective and very good insights.

Great points and all minor factors, but you missed the biggest one by far. The 7,500 credit was announced a few months ago, which decreases the price of a new Tesla, and thus the relative value of the used cars. That and the dramatic increase in production helping to satisfy demand.

Also Tesla lies about their range as much as 100 miles. And the battery degradation.

After Nichols was on the ground, one officer said: "I was hitting him with straight haymakers, dog", while another said: "I jumped in, started rocking him." What kind of police officers talk like this? Those are the ones we need to get rid of. I’m grateful for body cams!

The competition aspect you brought up is the most interesting to me. Made me wonder if this is similar to tech startups. A new/agile player enters the market to fill a need quickly. They do well for a bit. Maybe they start looking to other opportunities instead of focusing on their core products. The established brands catch up (this is where I think Tesla is in the story). The next steps are to innovate again to get back to the top or sell out to the established brands. It'll be interesting to see how it goes for Tesla

Agree on all points. The bottom line is they're boring and no longer the only game in town. No longer a status symbol, either. They're too common.

It’s not just Tesla it’s all electric cars I couldn’t believe when I saw a 2022 Audi RS etron gt the other day for $120k with only 1700 miles the thing literally had a 37k depreciation just from someone driving it 1700 miles which is ridiculous

The cost of insuring a Tesla in the UK is ludicrous and also the length of time to get spare parts

BMW CEO about a year ago said Tesla's dominance is almost over. I guess he was right

It is important to understand that CarMax did a blanket $12,000 discount across the board on Tesla vehicles in inventory. Some other car buying sites like Carvana and Vroom has stopped buying Tesla vehicles completely in certain locations. Vroom quoted my 2022 Tesla Model 3 Performance with 13k miles at $33,000 the day after the price cuts. That is half of the $66,000 offer they gave me 6 months ago.

Expense of battery replacement, lack of range, inability to adapt to extreme temperatures, and oppressive overbearing government policies

Teslas momentum has come to a lower gear now. And it’s normal, is part of being in a competitive market. They are still in an amazing position to keep on making cars and innovating for its customers.

I'd take a Taycan over a high spec model S any day, for the same price.

I have a 2013 Tesla P85 with 140,000 miles on it to original battery. I still get 228 miles of charge on a full battery. It has 0 to 60 in 4.5 seconds. I’ll drive this car to the wheels fall off.

Event horizon: When a used Tesla costs equal to it's savings in gas. Example: Gas savings = $300 per month and payment = $300 per month

Cheapest Tesla within 200 miles of me is $32,000. I guess that's good. When I got my Bolt the cheapest I could find was $25k. Last time I looked they were $40k. Got my 2017 Bolt Premier for $15k back at the end of 2019 and have loved it so far.

Agree about the tech worker side. Saw so many in the parking lot. Mostly it was a cool toy rather than a wise purchase. I didn’t get one. Prices too high, battery costs are crazy, and their interiors are depressing.

In Belgium there were more than 200 Tesla for sale on a website before COVID. Then it went down super hard. And now in just a few months this number went up to 430

You missed the massive influx of lease returns that Tesla flooded their used inventory with

Build quality...Reliability literal shit they fall apart after like 4 years

Regarding "the competition" -- I just ordered a Chevy Bolt EUV. My requirements: primarily "commuting appliance". - I qualify for GM supplier pricing, so I was able to see the price I would pay. Minimize the dealer nonsense. Also cuts out the "market adjustments". - 250ish range is fine. We have two other vehicles in the family that are PHEVs so the Supercharger network is nice to have, not a must have. - Fully optioned, Bolt is $42K. That includes Supercruise, fancy stereo, upgraded seats, sunroof. - Performance is more than adequate. Rush hour commuting is either sitting in traffic, rolling in traffic, or basically going the speed limit. - Model 3 RWD is $43K. I live in a place it snows. FWD with snow tires is fine (AWD/4WD is not a hard requirement). RWD is less desirable (although wife says NO). Model 3 AWD is $54K to start. - Incentives : $7.5K Federal, $3.5K state, plus free EVSE, and some other incentives drop serious money off the price. - Insurance rates: I have one teen driver and soon another. Tesla insurance rates vs. Bolt insurance rates are significantly different. Also, regarding "the competition" -- when I was at the dealer putting in my order, there are signs for the electric versions of the Blazer, Equinox, and Silverado, on a new platform that offers quicker charging and more range. Ford is backed up on orders for the Mach-E, and can you tell me the last time you saw an ad for a Mercedes that wasn't electric? You'd think Mercedes had entirely given up on internal combustion and was instead only selling to attractive ladies who wanted electrified SUVs, based on all the TV ads they have been running. I've ridden and driven Teslas. They are nice. The acceleration is brisk. Some of the quality issues are probably overhyped, but another factor you didn't mention was Tesla's drop in Consumer Reports rankings, which was widely reported. Yes, cue the "CR only likes boring cars" or "CR is biased towards Toyota and Honda" comments, but plenty of people only like boring cars, and Toyota/Honda do a good job making well engineered, reliable, long-lasting quality cars (even if many are, well, boring). There have also been numerous Tesla recalls in the news this year, too, which can't help -- and yes, I know GM also recalls vehicles. So there's definitely some dirt getting on the halo, and plenty of competition on both the low and high end.

Hope Doug is braced for the backlash from Musk cultists and fanboys. Some of them get so touchy for any criticism of Tesla.

Thanks for the objectivity, Doug. Common sense has become so uncommon, that it's like a whole new concept.

Doug , you ,missed on a few points. The economy. As a street smart investor I have noticed a shift in consumer buying. Basically people are holding their money. And then the popularity of the product has toped out. Again just the norm. A smart move would be too wait for the China crunch which is coming. Then the long term effect on Russia related to its war cost. Europe is heading into a crunch on the pound and the euro. Prices can only drop even more. Interest rates will rise and maintain for the next three yrs at least. Im not looking thru the eyes of a used car dealer. Only as an investor. Not pretty.

Doug, I'm concerned, are you going to have to re-arrange your entire license plate wall if you get a plate with the number 23? Or are you going to just put it on top of one of the extra 22's?

I personally think that people have started to notice the build quality as Tesla has had products on the market for a reasonable amount of time (over a decade). Now people are realising they don't have the longevity other manufacturers do...

I was going to say that competition plays a huge roll in the decrease in prices. It makes me happy because now a Tesla is affordable for an everyday joe like me. I'm looking to trade my Lexus in for one this spring.

I know here in the UK we pay road tax based on the cars emissions (never used to be based on that but hey). Electric cars were exempt because they do not have any. But recently the UK government has announced EVs will also have to pay a road tax from 2025. I have no clue what they will base that on kind of walked themselves into a box but it has affected EV sales here. We also had an in issue before Christmas 2022 where EV's were queuing on the motorway service station for over 6 hours to charge their car and dying before they got to the charger. For some reason they were all Tesla's which was not a good advert.

Also, keep in mind, the new requirements for the federal tax credit of $7500 does require the pricing of the vehicles to be lower than Tesla is charging currently.

Increased competition is absolutely the main reason for a Tesla dropoff demand

2 more things. 1. A lot of tesla buyers were stockholders who used their gains from the increase in Tesla's stock price. 2. The high price of used teslas led to a lot of flippers, and they've been dumping them to recoup their investments

Tesla discounting cars 20 % destroys competition and at same time stops price gauging in used cars market

Some years ago Tesla was the new cool kid in town. Driving a Tesla made you stand out as an early adaptor. Not so much anymore... Anyone and everyone drives Tesla, it has become a standard product.

I think the Musk factor is huge. I've thought he was a jerk for years (since he said we were all going to Mars and would be sending our cars out at night to act as "Robotaxis"). 2022 was the year when it finally dawned on the masses. There is huge animosity to the brand out there now (especially among his key customer base, as you rightly point out). Tesla could stil make it, but they need to get rid of Musk urgently.

There is a saturation of the market with Tesla cars; a majority of Tesla owners do not buy another Tesla when their current Tesla becomes old, but instead opt to go back to an ICE car. Besides that, a Tesla owner needing to replace their older Tesla with a newer Tesla that has the same body style and looks just like their old one isn't tempting anymore. They need a restyling really badly. Plus, the trend is towards SUVs and away from sedans, and Tesla doesn't really match the SUV image. And, that yoke with touch-sensitive buttons for turn signals is totally awful!

Completely misleading. All used car prices are dropping, L O L. Anyone that’s actually following the market knows that we are rapidly seeing a glut of used cars.Furthermore,Tesla just drop prices on new cars, so One would expect the used cars to follow.

I agree in general with everything. However the only one that matters is competition. The drop in price is because of the Federal Tax Credit. If you build a Model Y now, LR only with minimal option, it meets the 55k limit for a 5 seater. If they didn't lower the price they'd see more drops because loads of other small crossovers would eat up that credit.

I don't think Elon musk has anything to do with the price drop. Same as people still buying iPhones even knowing where and how they are made.

I work at a bank. Not a single one of the employees involved with lending or investing has a Tesla.

Go to 1:12 to skip cars&bids ad.

My mom wanted a new EV. She didn’t buy a Tesla because she dislikes Elon and wasn’t impressed by the quality. The competition just does better in quality department.

Then: This deal is getting worse all the time.... Now: This deal... is very fair and I'm happy to be a part of it!

Elon exposed the Twitter files and the FBI. I don't understand why anyone would hate him. That's a hero there. The only reason I wouldn't buy a Tesla is because it's expensive.

I think there are a couple of further points to this. The 3 to 4 year lease deals on Model 3's are coming to an end and flooding the market with used examples. The price of Electricity in UK and Europe has skyrocketed in the last year, making many EV's less desirable (I assume it is the same in the US). The average price in the UK for a M3 has fallen way too far and will most likely increase a bit in the future (an example is, I was offered £26k for an M3 Perf, grey with white interior, 4,000 miles reg late Dec 2021. This car was over £63k new and there is no way this car has lost £37k in just over 1 year or 59% of its value. I think panic has set in a little and traders are too frightened of getting burned.