Tesla is grappling with challenges in new vehicle sales as it faces direct competition from the used car market. CleanTechnica reported that the declining value of Tesla’s used cars and shortages of new models are dampening new car demand.
Despite efforts to boost demand through 0% financing and price cuts in Sweden, the depreciation of used car values has led to an unexpected consequence. Customers are holding onto their vehicles for longer, extending the replacement cycle for new cars.
Tesla now finds itself in an unusual position to compete against its brand in the used car market. While purchasing a new Tesla was once the only option for enthusiasts, buying a pre-owned one has become increasingly attractive financially. This shift encourages existing Tesla owners to keep their used vehicles rather than upgrade to the latest models.
The situation in Europe is particularly concerning. The prices of used Tesla vehicles have depreciated so much that some dealers are reluctant to take on Tesla vehicles.
Consequently, Tesla is feeling the squeeze from both the used and new car markets, a situation that could potentially lead to a significant drop in sales. CleanTechnica highlighted this issue, stating that while there has been much discussion about Tesla’s declining sales, insufficient attention has been paid to how the used car market cannibalizes demand for new vehicles.
