Over the past few months, Ken Harvey has been cultivating the up-and-coming business of Honda and Mazda dealers in Northern California. Used Teslas for sale.
Several times a month, Harvey picks up some second-hand Teslas at local car auctions, often selling at surprisingly affordable prices. Some consumers who qualify for state incentives will be using the Model 3 sedan, which is well under $20,000. This is less than half the new cost.
“We sold three last week, and perhaps 20 since the beginning of this year,” said Harvey, who owns four Honda dealers and two Mazda franchises in Alameda County, a suburb of San Francisco, where Tesla owns an auto factory.
“We currently have three stocks and two are in progress,” he added. “They don't stay for more than a few days.”
Welcome to the backlash against Elon Musk, Tesla's CEO and one of President Trump's closest confidants.
The used Tesla business grew for years before Musk and Trump approached, but their bonomy is turbocharged it.
After a surge during the pandemic, sales of new electric vehicles have slowed down in recent years. So Tesla, the leading seller of such cars, cut prices and pushed down the value of second-hand models.
Later, after Musk joined the Trump administration, many Tesla owners across the country either as a form of protest, or simply because they no longer wanted to be associated with the company.
The move has accelerated over the past two months as Musk was in charge of what he and Trump called government efficiency. Although not a government department, this federal office is given the authority by the president to fire government employees and dismantle agencies. Some of Musk's statements and actions included gestures of hard armed hands that many interpreted as Nazi salutes – angered Tesla owners and others who once praised the carmaker.
Dr. Jerome Winegarden of Ann Arbor, Michigan, said goodbye to his Model 3 Tesla. He only drove 35,000 miles, but he replaced it with a Ford F-150 Lightning electric pickup last month. The car won $18,000 as a trade-in. This is well below the original selling price of around $40,000.
“I was increasingly interested in Elon Musk and what he was doing. The Nazi salute was a turning point,” said Dr. Winegarden, 54. “There was too much symbolism. Just driving a car made me feel embarrassed.”
Tesla did not respond to requests for comment.
Protests have been igniting in Tesla showrooms in recent weeks, and in some cases Tesla vehicles, charging stations and buildings have been fired or destroyed. A group called Tesla Takedown encourages Tesla owners to sell Tesla stocks by selling cars and investors. Over the past month, the group has organized dozens of protests in the Tesla showrooms and elsewhere in the US, Europe, Australia and New Zealand.
Overseas, Musk's refusal to politics and his relationship with Trump had a significant impact on Tesla's business. Sales in 25 European countries fell by about 45% in the first two months of the year, according to market researcher Jato Dynamics.
Automotive analysts believe Musk's political activities will play a role in Tesla's sales trends in the US, but it is difficult to pinpoint the exact impact as Tesla does not destroy U.S. sales. The total European sales total is released monthly by government agencies, so the total European sales total is easily compiled.
It is clear that the number of used Teslas for sale in the US is increasing. Autotrader.com listed around 11,700 used Teslas for sale by dealers and private sellers in late March. That rose from around 8,000 at the beginning of the year.
According to Edmunds, another automotive data provider, more Teslas has been replaced with dealers. In March, 1.4% of 2017 model Teslas, or new vehicles, increased 1.4% of vehicles traded for new or used cars or trucks purchased from dealers, from 0.4% a year ago.
Stephanie Valdez Streety, director of industry insights at Cox Automotive, is the company owning Autotrader.com and the auto auction business Mannheim, who said that Tesla sales introduced the Model Y in 2020, had risen sharply in 2020, with more used vehicles being sold, sold and traded.
She said she believes Musk's politics are hurting the Tesla brand.
Enzo Costa, sales director for Patrick Dealer Group, a family-owned company with eight dealers in the Chicago area, said many customers, including 10, are trading at Teslas last week.
Unlike Harvey, a California dealer, Costa usually sends Trade Inteslus to wholesale auctions rather than selling to individuals. This is mainly because Tesla prices were very unstable. Over the past month, Costa said he has seen a 10-15% drop in the value of used Teslas.
“We don't intend to take opportunities as the Tesla market changes frequently,” he said. “I send them to auction to get the best value from them before they really start dropping.”
In California, Harvey said demand for affordable Teslas is solid despite Musk's political efforts. The car appeals to many customers who can't afford a new electric vehicle, but want to buy one to avoid the price of gas in California.
“We're looking at a lot of ride-sharing drivers and seeing the first young buyers who normally wouldn't buy a Tesla,” he said. “For the time being, this has been an incredible opportunity for our dealers and customers.”
Robert Chiarito and Anusha Baiya donated their reports.
