Wednesday, April 17, 2024

Musk predicted that Tesla cars would become more valuable, but things turned out the other way around

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In 2019, Elon Musk claimed Tesla cars would increase in value over time due to their self-driving feature. He suggested that with a few updates and regulatory approval, the cars could become fully independent and even work as taxis, making them worth more.

However, as of now, four years later, the average price of a used Tesla Model 3 has dropped significantly to $29,000. Musk’s prediction did not come true, and regulatory approval for full self-driving is still pending. Tesla’s market share for electric vehicles (EVs) has also decreased from 80% in 2020 to 55% in 2023, as more competitors entered the market.

To cope with the increased competition, Tesla aggressively lowered the prices of its new cars, causing a domino effect on used Tesla prices. In the past year, the price of a used 2021 Tesla Model 3 has decreased by about 29%, while new Tesla prices dropped by approximately 21%. This price decrease affected the entire used EV market, with other EVs also experiencing a decline in value.

The drop in used Tesla values was a significant factor in Hertz’s decision to sell 20,000 electric vehicles, most of them Teslas, due to their impact on resale values. Tesla’s actions have caused ripples throughout the used EV industry, affecting the prices of other EV models like the Ford Mustang Mach-E, which fell almost 37% over the past year.

In summary, Musk’s claim about Tesla cars increasing in value did not materialize, and the increased competition in the EV market, coupled with aggressive price cuts, has led to a significant decline in used Tesla prices and impacted the overall used EV market.

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