Tesla’s used car prices have plummeted below the average cost of all used vehicles for the first time, marking an extraordinary shift for the premium electric brand. The average used Tesla now costs $27,814, while the CarGurus Index shows the typical used car costs $28,039. This means Tesla’s premium vehicles are now cheaper than mass-market cars from regular brands.
The numbers show a dramatic collapse. Tesla prices dropped 4.59% over the past year while the overall market went up 1.22%. In just the last month, Tesla prices fell another 1.24% while other used cars increased 0.46%. Industry experts call this situation “unprecedented” and “quite exceptional” for a premium brand.
Tesla prices fell 4.59% while the overall market rose 1.22%, an unprecedented collapse for a premium brand.
Every Tesla model has lost significant value. The Model S is worth $8,768 less than it was in June 2024, a 15.8% drop. The Model X fell $9,544 or 15.5% year-over-year. The Model Y declined 13.6%, losing $4,637 in value. Even the recently launched Cybertruck is down 29.07% from last year. The Model 3, Tesla’s most affordable car, now averages $23,388 after dropping 8.32%.
While the broader used car market started recovering in March 2025, Tesla prices kept falling. Regular gas-powered cars and trucks became 5.2% more expensive during this period. Electric vehicles as a category saw prices drop 4.8%, but Tesla’s declines were the steepest among all EVs. Despite the price drops, used Tesla sales volume actually increased 27% in April month over month, showing strong buyer interest at these lower price points.
Several factors explain this collapse. Elon Musk’s divisive political stances have affected the brand’s image. Overall interest in EVs is declining, with more people selling their electric cars. The used EV market share growth rate plummeted from 98% in 2024 to just 14.2%. This represents a dramatic slowdown as increased supply of used EVs floods the market from owners selling at a faster pace.
A federal $4,000 incentive for buying used EVs ends September 30th. Nearly 30% of used EVs qualify for this credit, yet only 7% of dealerships registered for the program. Once this discount disappears, prices could drop even further.
Market analysts believe EV demand has peaked and will decline in coming years. The Recurrent Price Index fell 32% year-over-year to $27,800. Tesla’s price collapse shows the EV market isn’t meeting earlier projections from government officials and industry supporters.