Tesla Cuts Used Inventory Prices by 14% in May

Tesla likely uses algorithms to adjust prices for its used inventory

May 28, 2024

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Tesla’s direct sales approach shakes up the traditional dealership model by selling cars straight to customers through its own stores and website. This gives Tesla complete control over its sales process, but it also means the company has to handle the ups and downs of market demand on its own. When you buy a new Tesla, you can trade in your old car, no matter the brand. If you trade in a Tesla, they might refurbish it and sell it as a certified pre-owned vehicle on their website, letting buyers get used Teslas straight from the source. However, this adds an extra layer of complexity to Tesla's inventory management.

In May 2024, Tesla saw its average sales price for used cars drop by about 14%. As of May 28, 2024, the average price for a used Tesla was around $32,800, down from $38,000 at the start of the month. During this time, the inventory slightly decreased from about 1,400 listings on May 1 to 1,300, a drop of around 7%. The mix of models remained pretty stable, with the Model 3 and Model Y making up most of the listings. Interestingly, the Cybertruck still hasn't made an appearance in any inventory, new or used. A Reddit user claimed to have spotted a Cybertruck on Tesla’s website earlier this week, but we couldn't confirm it. You can check out the original post here. This price drop alone might mean Tesla’s used inventory value took a hit of over $6 million in less than a month.

Tesla Used Inventory Trends at CarFinderZone
Tesla Used Inventory Trends at CarFinderZone - May 28, 2024

Tesla seems to be pretty aggressive with its price changes, probably using algorithms to adjust prices based on market demand. In May alone, each Tesla vehicle saw an average of about seven price changes, and the month isn’t even over yet. In comparison, other dealers like Carmax made fewer than one price change per vehicle during the same period.

This data is collected daily by CarFinderZone, which monitors market trends and dealer listings, providing updates for Tesla and other major car dealers. To highlight these dynamic price changes, here are two active listings at the time of publishing: 2020 Tesla Model X Long Range and a “2020 Tesla Model Y Long Range.

2020 Model Y VIN:5YJYGDEE6LF025243 Price History
2020 Tesla Modey Y VIN:5YJYGDEE6LF025243 Price History - May 28, 2024

Tesla has been aggressively cutting prices on its new inventory, and it was only a matter of time before this affected their used cars too. What’s surprising is how quickly these changes are happening. Usually, dealers resist dropping prices to avoid big losses on cars they already have in stock. Even though Tesla’s used inventory has doubled in size since last year, it’s still relatively small compared to their new car sales.

It will be interesting to see if this trend continues or if the price drops have brought Tesla’s sales back to their targets. For consumers, this summer could be the perfect time to snag a deal if the trend keeps up. However, Tesla’s price algorithms work both ways—if demand rises, don’t be surprised if prices quickly follow suit.

Tesla Vehicles
Credit: Tesla Inc.