The number of Tesla owners opting to trade in their vehicles reached an unprecedented high in March 2023. This surge in trade-ins complicates the challenges facing the automaker, particularly as CEO Elon Musk finds himself at the center of political controversies since his prominent role during President Donald Trump’s administration.
According to data from the U.S. car shopping website Edmunds, 1.4 percent of all vehicles traded in at dealerships for new or used cars through March 16 were Tesla cars from the model year 2017 or newer. This figure represents the highest share on record. The data indicates a significant upward trend: last March, only 0.4 percent of traded vehicles were Teslas, which increased to 0.8 percent in January and 1.2 percent in February.
This rise in trade-ins coincides with mounting backlash against Musk, particularly in light of his involvement in substantial budget cuts to the federal government via the U.S. DOGE Service. Recent weeks have seen protests erupt across the nation, with demonstrators vandalizing Tesla vehicles and facilities, and even setting charging stations ablaze.
In response to these incidents, Trump issued a warning on Friday, threatening those who vandalize Tesla cars with lengthy prison sentences in El Salvador's notorious mega-prison. Earlier in the week, Attorney General Pam Bondi characterized attacks on Teslas as “domestic terrorism.” Alongside this escalating tension, Tesla's stock has taken a notable hit, plummeting from a peak of approximately $480 per share in December to just $236.26 by Thursday.
Adding to Tesla’s woes, sales in Europe have decreased by 45 percent compared to the previous year, leading some owners to experience buyer’s remorse. Concerns are growing among Tesla owners that their vehicles may signal support for Musk, a polarizing figure in the political landscape. Jessica Caldwell, head of insights for Edmunds, noted that Musk's reputation could be a contributing factor to the increase in trade-ins. She stated, “Brand loyalty is becoming a bigger question mark as factors such as Elon Musk’s increasing public involvement in government, Tesla depreciation concerns, and its increased saturation in major metro areas leave some longtime owners feeling disconnected from the brand.”
As more car manufacturers enter the electric vehicle (EV) market, consumer interest is diversifying. A February report from Cars.com revealed that searches for used Teslas dropped by 16 percent from the previous month and 7 percent year-over-year, suggesting that shoppers are exploring alternatives. The report also indicated that the number of used electric vehicle models available has increased to 76 this year, up from 58 last year.
In contrast, searches for non-Tesla electric vehicles surged by 28 percent over the past year. Analyst David Greene from Cars.com commented, “What we’re seeing in the marketplace is just fragmentation that is very normal. Tesla enjoyed exclusivity and market dominance for quite a long time, but other automakers are getting into the EV space.” However, Greene expressed skepticism that these trends represent a significant consumer backlash against Tesla, noting that market shifts can take time to manifest in sales data.
The proportion of car shoppers considering a new Tesla has also diminished. In February, only 1.8 percent of visitors on the Edmunds site were contemplating a Tesla purchase, marking the lowest level since October 2022. This figure peaked at 3.3 percent in late November 2024. When Tesla owners do trade in their vehicles, the majority are opting for electric or hybrid models as replacements.
Caldwell concluded, “As Tesla brand loyalty and interest wavers, those offering competitive pricing, new technology, or simply less controversy could capture defecting Tesla owners and first-time EV buyers.” The evolving landscape of the electric vehicle market poses both challenges and opportunities for Tesla as it navigates through this turbulent period.
