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Tesla's Steep Depreciation Rate Sparks Online Conversation on EV Affordability

Parris attributed the depreciation partly to the decline in new Tesla prices, which experienced a substantial drop of 20%.
PUBLISHED APR 29, 2024
Cover Image Source: TikTok | @parris.devon
Cover Image Source: TikTok | @parris.devon

In a recent viral TikTok video, user Devon Parris (@parris.devon) shed light on the significant depreciation value of Tesla's electric vehicles (EVs), sparking discussions about their affordability and accessibility. Parris highlighted listings of used Teslas, noting that prices for models with relatively low mileage had plummeted to as low as $26,000 to $27,000. This observation raised eyebrows, prompting questions about the factors contributing to Tesla's rapid depreciation.

TikTok | @parris.devon
TikTok | @parris.devon

Parris attributed the depreciation partly to the decline in new Tesla prices, which experienced a substantial drop of 20% following an announcement by CEO Elon Musk. The increase in the availability of EVs from various manufacturers, coupled with the end of COVID-19 and the resolution of the chip shortage, has led to discounted rates for new vehicles. Consequently, used cars remain unsold for longer periods, driving down their prices further.

TikTok | @parris.devon
TikTok | @parris.devon

The affordability of Tesla's new models has led to speculation about their potential appeal to lower-income individuals. Parris suggested that with the government's intervention, Tesla's cheaper models could be leveraged to provide tax breaks and free charging services to residents in low-income housing. This proposal aims to offer an alternative transportation solution to individuals who may struggle with the costs associated with traditional gasoline-powered vehicles.

However, Tesla models' rapid depreciation rate has raised concerns among experts. According to a study by iSeeCars, Tesla experienced the highest year-over-year depreciation among all brands, with a staggering decline of 28.9%. Karl Brauer, executive analyst at iSeeCars, attributed this trend to Musk's strategy of maintaining new Tesla sales through price cuts, which had a detrimental impact on the brand's residual values.

TikTok | @parris.devon
TikTok | @parris.devon

Despite the challenges posed by Tesla's depreciation, the company remains committed to making its vehicles more accessible. Musk announced plans to start production of more affordable models in early 2025, potentially making Tesla's lineup even more appealing to a broader audience. However, concerns linger about the long-term sustainability of Tesla's pricing strategy and its implications for both new and used car markets.

TikTok | @parris.devon
TikTok | @parris.devon

In response to Parris' proposal, opinions are divided among consumers and policymakers. While some applaud the idea of making EVs more accessible to low-income individuals, others express skepticism about the feasibility and effectiveness of such initiatives. The debate underscores the broader discussions surrounding the role of EVs in promoting sustainability and equity in transportation.

@Brayan._. "Yea cause the batteries aren't cheap to replace." @Hark weighed in, suggesting, "Elon wants them to depreciate allows them to be more in the general public," with @Devon Parris the Creator agreeing, "Yep exactly!!" The discussion took a practical turn when @übersteveorlando advised against Tesla purchases, saying "Don't waste your money. Toyota has some great hybrids. And they store their own energy!. @THASMABOII expressed readiness "will buy a Tesla once prices dropped to $20k", to which @Devon Parris humorously agreed, "Fr lol." @Miles questioned the notion of bad depreciation, citing "How is that bad depreciation? The base model Tesla starts at like 37-38". @Dre defended Elon Musk's intention citing "I mean Elon built them to be affordable vehicles they were never supposed to be pricey his whole goal was making affordable EVs he literally said this himself. " @Jay commented, "I thought about it. I don’t wanna charge my car. I already be late to work" @Q said "These were like 32K after incentives new... 29K for a used base model with 23K miles is not bad for depreciation". Finally @Brad Cast added "Funny, I’d still choose Nissan Altima over it. Has to be an SR though lol".

For more such content do follow @parris.devon on TikTok

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