End of tax incentive results in cheap second hand Tesla’s being sold

A surge in the supply of second-hand electric cars has led to a significant drop in prices for many vehicles, particularly Teslas, which are now hitting the second-hand market after being leased. Second-hand car dealers told RTL Z they’ve seen a marked increase in business involving used electric cars.

This rise in supply has led to the popular Tesla Model 3 being sold for as low as 14,000 euros. Price comparison site Gaspedaal.nl tracked the price drop, noting that the average price of a Tesla Model 3 was 30,000 euros in January. By December, that price had fallen to 21,600 euros, a drop of more than 25 percent.

Many of the second-hand Teslas are coming from the leasing sector. Manufacturers sold a significant number of electric cars for private and business leases at the end of 2019. This was the final opportunity to take advantage of an extremely low tax rate for electric lease cars, which could be locked in for a maximum of five years.

Figures from the car industry organization BOVAG show that 51,215 electric lease cars were sold in 2019, most of them in the final months of the year. These cars were registered in the name of the driver but are often owned by leasing companies. Now that the five-year leasing terms have expired, many of these cars are flooding the market.

Rico Luman, a car market analyst for ING, said the price drop has made electric cars, including Teslas, more attractive to buyers. "This is really interesting," he said, referring to the steep drop in prices. He added that the number of kilometers driven by these cars is not a concern. "In practice, Teslas can go well over 500,000 kilometers. These cars should still have plenty of life left."

Luman also noted that battery care could impact the lifespan of the car. For example, frequent use of fast chargers can be detrimental to battery health. Still, many second-hand Teslas, particularly the Model 3, should continue to perform well, as these cars are designed to last for several hundred thousand kilometers.

The price drop is also attributed to the introduction of more affordable electric cars by European manufacturers, as well as significant price cuts by Tesla and several Chinese carmakers. These factors have driven down prices across the electric car market, including in the second-hand sector.