In recent months, Tesla has found itself in a storm over falling used electric vehicle prices, largely attributed to rising dissatisfaction with its CEO Elon Musk. Despite a favorable relationship with President Trump, Musk's political involvement appears to have backfired, influencing consumer sentiment toward the brand.
According to a report by CNN, data from Cars.com revealed that searches for used Teslas have dropped by 16%, while interest in used non-Tesla electric vehicles surged by 28%. This shift in consumer behavior coincides with a significant plummet in used Tesla prices, which have fallen to levels more than half below their counterparts in the electric vehicle market.
Particularly striking is the performance of the Tesla Cybertruck. Citing figures from the automotive marketplace CarGurus, CNN reported that resale prices for this highly anticipated vehicle have dropped an astonishing 58% compared to its original list price. Such declines raise questions about consumer sentiment and brand loyalty as resales continue to trend downward.
The story of increased discontent among Tesla owners is echoed in a number of personal accounts. For instance, Pam Perkins, a Tesla owner from Northern California, expressed regret, stating, “If someone were to offer me a fair purchase price, I would not hesitate to sell this Tesla.” In Ohio, Jennifer Trebb shared similar sentiments, revealing that every time she sees her Tesla Model Y, it reminds her of Musk’s involvement in federal government roles that sit uneasily with her values.
Compounding the issue of falling prices, data from Edmunds.com indicated that, as of March 15, 2025, the rate of Tesla owners trading in their vehicles has increased from 0.4% to 1.4% year-over-year. This growth suggests that more consumers are opting to exit the Tesla ecosystem, rather than remain loyal to the brand amid this climate of disillusionment.
Jessica Caldwell, a director at Edmunds.com, noted the various factors affecting Tesla's market performance. “Many factors including dissatisfaction with Musk, issues related to electric vehicle depreciation, and an increasingly saturated market could be impacting resale values. However, the growing number of Tesla owners selling their vehicles due to discontent with Musk’s behavior seems significant.”
Musk’s political maneuvering has certainly stirred reactions. While criticism continues to flow from certain consumer segments, an increasing number of right-leaning individuals appear to embrace the Tesla brand, creating a unique dichotomy. Ike Silver, an assistant professor of marketing at the University of Southern California, pointed out that “how to attract new right customers to fill the void left by left-leaning customers is perhaps the most pressing concern for Tesla.”
As the used car market dynamics change, analysts stress that competitive pressure from other electric vehicle manufacturers is also impacting Tesla’s resale values. David Greene, a Cars.com analyst, illustrated this, stating, “In February, a total of 76 used electric vehicles were registered on our site, which is 18 more than in the same month last year, contributing to the trend of declining prices for used electric cars.”
Moreover, the growing influence of car rental companies in the electric vehicle sector is noteworthy, as they currently own roughly 70% of electric cars in the United States. This significant presence means that a large influx of used Teslas and other electric vehicles could soon hit the market. Greene further speculated that “as these rental companies replace their fleets, there could be yet another wave of used Teslas entering the market, further driving prices down.”
As of March 20, 2025, shares of Tesla closed at $236.26, reflecting a substantial decline from its peak following the U.S. election last December. This drop has reignited concerns among investors, even as Trump openly expressed support for Musk, acquiring a new Model S in March and promoting Tesla on social media platforms.
Furthermore, Commerce Secretary Howard Lutnick has publicly encouraged investors to consider buying Tesla stocks, marking a notable moment as it’s the first time in U.S. history that an acting Commerce Secretary has promoted specific stock purchases. Against this backdrop, Musk's ongoing political linkages raise questions about the long-term viability of Tesla's brand in a changing automotive landscape.
The uncertainty surrounding prices and consumer protective sentiment could well be a bellwether for Tesla as it faces challenges not just from market competitors but also from within its consumer base. How Musk navigates these growing concerns and the political ramifications of his actions could prove pivotal for the company’s future in the electric vehicle market.
