Tesla’s price cuts accidentally hurt second-hand cars, and some car dealers have lost millions

Source of this article: Times Weekly Author: Qi Xin

A stone stirs up a thousand waves. Tesla’s price cuts shook the industry, angered car owners, and affected the used car market.

“We are losing blood.” Recently, Shen Lei (pseudonym), a staff member of a second-hand car dealer in Shanghai, complained to the Times Weekly reporter: “Don’t mention it, we can’t afford a Tesla without losing 30,000 to 50,000 yuan. Probably more than fifty thousand dollars.”

Not only second-hand Teslas, but also some second-hand new energy vehicles of other brands will be cut together. For a time, the second-hand new energy vehicle market also received attention. In recent years, new energy vehicles have risen rapidly. As the market’s recognition of new energy vehicles continues to increase, the second-hand new energy vehicle market has emerged, and its scale is expanding day by day.

“The number of new energy vehicles is increasing year by year, and market awareness and quality reliability are improving. The market size of second-hand new energy vehicles will also become larger and larger.” On January 16, Jiangxi New Energy Technology Vocational College New Energy Zhang Xiang, dean of the Automotive Technology Research Institute, told Time Weekly.

Second-hand Tesla follow-up

The price of Tesla’s new cars has dropped, and used cars have also dropped, making second-hand car dealers miserable.

“Well, it’s hard to say.” Shen Lei told the Times Weekly reporter that after Tesla’s official price reduction news, the second-hand Teslas in the store have also undergone a certain degree of price reduction. A Model 3 2020 standard battery life rear-wheel drive The original price of the upgraded version was 214,000 yuan, but now it sells for more than 170,000 yuan. Combined with recent in-store promotions and discounts, the transaction price is about 165,000 yuan.

The price of another Model Y 2021 standard battery life rear-wheel drive model with a driving range of about 12,000 kilometers was also reduced by 22,000 yuan. “The condition of this car is quite good. The original original paint of the whole car is 98% new, and there is no trace of use.” Shen Lei said bluntly, the current price of the car is about 40,000 yuan cheaper than the price of a new car after diving.

The person in charge of Uxin’s second-hand car told the Times Weekly reporter that after Tesla announced the price cut news, the price of Tesla on the platform also dropped accordingly, with an average price reduction of 20,000 yuan per car.

Following the big price cut in China, Tesla has “killed the Quartet” by cutting prices in many places around the world. In Asia, North America, Europe and other places, Tesla has lowered prices by varying degrees, involving the United States, Germany, Canada, France and other countries, with price reductions ranging from 1% to 20%.

The sharp price cuts have even triggered the phenomenon of used car prices upside down on new cars. On a social platform, some foreign netizens said that Tesla’s new cars in some parts of the United States are cheaper than some used cars.

According to media reports, netizen “Ash Martian” said that after enjoying the $7,500 electric vehicle tax rebate, the purchase price of the Tesla Model 3, which was originally priced at $43,990, came to $36,490. The price of a local second-hand Tesla Model 3 is $38,600, and the price of a used car is nearly $2,100 more expensive than a new car.

Prices for used Teslas have fallen faster than other brands. According to data from Edmunds, an American automotive consulting company, in November 2022, the average price of a second-hand Tesla will be US$55,754, a 17% drop from the peak of US$67,297 in July of that year. The value of the overall used car market fell by 4% over the period.

Stirring up the used car market

Before the big price cut, the price of Tesla was also unstable. Li Daming (pseudonym), a second-hand car dealer in Henan, said frankly that this is one of the reasons why he does not sell second-hand Teslas.

“Without informing in advance, the price will be cut directly, not once or twice.” On January 15, Li Daming said that he believed that Tesla’s price was too uncertain. Li Daming told the Time Weekly reporter that the profit margin of a second-hand Tesla is about 5%, or about 10,000 yuan, because many car dealers have lost money due to the price cut. “I know a (second-hand car dealer) who specializes in Teslas. He has 30 Teslas in his hand, and he will lose more than 1 million yuan after the calculation (after the price reduction).” Li Daming said.

Despite losing money, some second-hand car dealers still decided to sell at a low price. Shen Lei said that recently, many consumers have taken the opportunity to “pick up leaks”. During the communication between the reporter and Shen Lei, the above-mentioned Model Y has been placed and sold.

At the same time, some second-hand car dealers have changed their business strategies because of the big price cut. Some second-hand car dealers told Time Weekly reporters that they no longer accept Teslas, and some second-hand car dealers said that they have rented out unsold Teslas and no longer sell them.

“Some car dealers are unwilling to give up and have to wait for Tesla to recover. After all, it will fall and rise later, which is hard to say.” Shen Lei said.

In fact, not only car dealers engaged in second-hand Tesla transactions are affected, but other new energy brand second-hand car dealers are also affected. Li Daming, who does not do second-hand Tesla business, is one of them. He told the Times Weekly reporter that he was about to lower the price of the second-hand BYD Han he sold recently, and decided to lower the price by about 20,000 yuan per unit.

According to media reports, some second-hand car dealers said that the second-hand market prices of models such as Xiaopeng P7 and Jikrypton 001 have also dropped by 3,000-5,000 yuan.

Industry insider Wang Hui (pseudonym) told Die Zeit reporter that Tesla’s price cuts have dealt a big blow to mid-to-high-end new energy vehicles of other brands. Users changed their willingness to spend and chose to buy second-hand Teslas instead.

The second-hand new energy vehicle market is worth looking forward to

Before this sharp price cut, Tesla was also quite popular in the second-hand car market.

According to the “2022 Used Car Consumption Insight Report” released by the online used car dealer Uxin Group, among the top 10 most popular new energy vehicles, Tesla Model 3 occupies the top spot, and Tesla Model Y ranks third.

“(Before the price cut) was also popular. At that time, car dealers liked to accept Tesla.” Shen Lei said.

Not only for Tesla, the overall acceptance of domestic consumers for second-hand new energy vehicles is also increasing. “(Consumers’ awareness and acceptance of second-hand new energy vehicles) is slowly increasing year by year.” Li Daming said that according to his observations, many consumers will choose to buy second-hand new energy vehicles in recent years.

The continuous development of the domestic second-hand new energy vehicle market is related to the increase in the number of new energy vehicles. According to media reports, in the first 11 months of 2022, the production and sales of new energy vehicles in my country will be 6.253 million and 6.067 million respectively, a year-on-year increase of 1 times. The number of new energy vehicles has exceeded 11.49 million. The “2022 Annual Used Car Online Transaction Data Report” released by the domestic second-hand car trading online service platform Tiantianpaiche shows that the online transaction volume of new energy used car transactions increased by 25.3% year-on-year.

“The number of new energy vehicles has increased, and the second-hand new energy vehicle market has become more frequent.” Zhang Xiang told the Times Weekly reporter. The more car models there are in the car market, the easier it is for consumers to find the car they like, and the more transactions are made.

China Automobile Strategy and Policy Research Center pointed out in a related article that as the number of automobiles in my country continues to grow, the circulation of second-hand cars, as an important link in the entire life cycle of automobiles, plays an important role in revitalizing the stock of automobiles, driving the increase of new cars, and promoting automobile consumption. important role has become increasingly prominent.

But at present, there are still many problems in the development process of the domestic second-hand new energy vehicle market. Zhang Xiang told the Die Zeit reporter that new energy vehicles are not as good as fuel vehicles in terms of battery life and reliability. In addition, the rights and interests provided by some car companies, such as free charging for life, are limited to the first car owner and cannot be enjoyed by second-hand car owners. The above reasons are all It has hindered the development of the second-hand new energy vehicle market.

In the long run, the second-hand new energy vehicle market is still worth looking forward to. “The second-hand car market is now in its infancy. With the arrival of the next generation of new energy vehicle replacements, second-hand car trading will usher in greater room for development.” On January 16, Zhang Xiaorong, president of Deepin Technology Research Institute, told the Times Weekly reporter.