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Used Tesla price bubble bursts
STORY: For much of the past two years, Tesla buyers who waited months for delivery of their new cars had two enticing options: keep the coveted electric vehicle, or sell it at an even higher price to a buyer with less patience.But the days of the profit-taking Tesla flip may be numbered.That’s because prices of used Teslas are falling fast, even faster than those of other car makers.The average price for a used Tesla in November was almost $56,000, down from a July peak of more than $67,000. That’s a 17% drop, while the overall used car market posted a 4% drop during that same period, according to data from Edmunds.Over the past two years, rising gasoline prices helped boost demand for Teslas. The company itself raised prices faster than other brands in order to build its profit margins.But now fuel prices are easing, interest rates are rising, Tesla’s output is increasing, and EV competition is growing, causing used Tesla prices to fall faster than the market as demand languishes.Some analysts say CEO Elon Musk’s so-called Twitter “distraction” is also alienating potential buyers, as prices of new Teslas have also taken a hit. The company last week offered a $7,500 rebate on both its Model Y and Model 3, doubling its previous discount on each.Tesla shares have plummeted from almost $400 at the start of 2022, down to about $113 on Tuesday.Last week Musk said that the “radical interest rate changes” have increased the prices of all cars, new and used, and that Tesla potentially could lower pricing to sustain volume growth, which would result in lower profit.Tesla, which has disbanded its media relations department, did not respond to Reuters’ emailed questions.