Tesla Blog

Tesla Price Drop

If you’ve read any of my previous blogs or know me, you’ll know I’m a massive advocate of technology and I’m no different when it comes to cars so the thought of owning and driving a Tesla thrilled me. They were finally reaching the price point where I thought they were affordable.

In November 2022 we bought yet another Tesla for resale, as we had bought and sold numerous before. I know a lot of other independent dealers were a bit weary about buying second hand electric cars and didn’t take the risk but I had bought a few and they had all sold, both to long term loyal customers and new customers alike. The main motor was under warranty for 8 years, as was the principle battery so the main concerns were covered.

The modern day car purchases tends to revolve around monthly payments, so calculating the overall cost of owning a Tesla was now a reality for a lot of people especially after the huge price hike in fuel last year during the Russia-Ukraine War. The battery and main motor were warranted by Tesla for 8 years so to take a 3 year old Tesla over a 4 year PCP was considered low risk. The GFV (Guaranteed Future Value ) was exactly that, guaranteed ! So what was the risk? A dive into the electric world without any concerns. Electric was so much cheaper than petrol or diesel, the payments were fixed, the future value was fixed, the battery was covered as was the main motor. It all sounds great unless you bought one cash or sourced your own loan to fund the vehicle (that’s a topic for another day)

In November 2022 there were roughly 13 Tesla Model 3’s for sale in Northern Ireland and ours was the cheapest advertised at £43,950 with only 13,000 miles. It was 3 years old at the time and a new one would have cost circa £40,000 but with a waiting list to order a new one. Around 8 weeks later I looked online at that time there were now circa 38 available for sale in Northern Ireland and suddenly ours looked too expensive with the dealers all jostling to advertise the best priced Tesla in N.I. We continued to reduce ours until it was so cheap that someone had to buy it and we sold it in March 2023 at £29950 and lost circa £10,000 in one car! In the past, I’ve got the price wrong on a car and given too much for one or had a problem car which has cost us money to put right but this one hurt! I still weep at the thought of it now even though it went to a gentleman who absolutely loves the car!  People ask me how did you lose £10k in one car and I’ll explain below.

It’s basic supply and demand at work here. At the time I bought the car there was not many of them for sale and with demand high due to huge fuel prices, I thought I had mastered the art of buying them but a bit like the Property of Crash in 2008, I bought exactly at the wrong time. The Teslas had now become 3.5 years old and were being released into the used car market from Company Lease agreements and contract hire terms so the market became flooded fairly quickly.  As the supply becomes more plentiful, the demand is met and the prices drop. Every car dealer wanted to drop their car more than the other and the prices continued to drop as more cars entered the market. Then the shortage of new cars eased up and ordering and collecting a new Tesla became a faster process which hit the value of the used ones, remember used ones were commanding higher prices than a new one because they were physical and available. Elon Musk enters the chat and decides not only can you have a Tesla quickly now, but he’s slashed £5000 off the price of a new one to keep market share as new Manufacturers EV’s hit the market. The fuel prices drop back to somewhere near normal and suddenly people aren’t rushing out the door to change to an electric vehicle to save on their monthly outgoings.

It’s a tough loss to take but mistakes are all about the lessons. The whole EV market took a steep drop recently but values are starting to stabilise and realistically are probably finding the level they should have been at pre-covid.

I would still buy another Tesla tomorrow because they are awesome especially as a dad to two young girls - they love it and all its features. The difference is I would hope to buy this one at current market value. The infrastructure is growing every day for them and as technology advances and the battery range increases, so will the amount of cars on the road. The amount of public chargers would need to grow in direct correlation with sales to make it all work.

The government are forcing us down the electric route so they will have to subsidise and prepare us for it. In an attempt to speed up that process they have :

• Abolished the £20/30 road tax on small diesel cars
• Introduced free road tax on Electric cars up until 2022.
• Reduced BIK (Benefit in Kind) to around 1% to force companies into electric cars for their fleet. They banned the production of any fossil fuel cars from 2030
• Company Tax deductible savings on electric cars
• Subsidy Schemes for household chargers
• Introduced law that all Domestic new builds must have an electric car charger installed.

If you fancy calling for a chat, discussion or some reassurance regarding your EV journey, please feel free to call in and see us at Auto Q, 25 Imperial Drive, Belfast, BT6 8JH.