The surge in prices for used vehicles was a huge story in the U.S. in 2021 due to a huge rise in demand and lower supply.
The trend has gone global, with the prices of used vehicles in China from a top manufacturer outpacing those of new vehicles.
What Happened: The supply of Tesla Inc TSLA electric vehicles in China is falling behind demand, which has led to a surge in the price of used Tesla vehicles, according to CarNewsChina.
A shortage of chips, COVID-19 related issues and supply line challenges were named as reasons for the lower supply.
The used car market in China is relatively new and has seen a huge increase due to the supply issues. Used car sales rose 22.6% in China in 2021, hitting 17.5 million vehicles.
Used Model Y vehicles from Tesla are now being priced higher than new ones, with a sticker price up to $2,700 higher.
The wait list for Tesla Model Y vehicles is around six months, according to CarNewsChina, which has led to increased used prices.
Related Link: Tesla Q4 Earnings Highlights: $17.7B Revenue, Beats Estimates, Production & Delivery Totals And More
Why It’s Important: Used car prices surged in the U.S. in 2021 due to supply issues and increased demand. Used car values were up 27% year-over-year through December 2021.
Many consumers would rather pay more to get a vehicle now, used or new, than wait six months or more for their desired model and preferences.
The old motto is that cars lose half their value when driven off the lot. In the case of used cars over the last few years, the immediate depreciation of vehicles is far less.
Tesla sales hit a record 70,847 units in China for the month of December, up 34% from the previous month and up around 200% on a year-over-year basis.
Electric vehicle sales in China hit 505,000 units in December, up 139% year-over-year and up 18% from the prior month.
Increased production remains a key goal for Tesla in China, as it sees the country as a key market. The increased demand and rise of value for used Tesla models could show that Tesla has a huge opportunity in the country.
TSLA Price Action: TSLA shares were down 3.65% at $791.56 midday Wednesday.
Photo courtesy of Tesla.
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