For the last several months, Ken Harvey has been cultivating a budding side business for his Honda and Mazda dealerships in Northern California: selling used Teslas.
A few times a month, Mr. Harvey picks up a few pre-owned Teslas at a local automobile auction and offers them for sale, often at surprisingly affordable prices, thanks to a $4,000 federal tax credit that customers get for purchasing used electric vehicles priced under $25,000. Some consumers who qualify for state incentives, he said, end up with used Model 3 sedans for well under $20,000 — less than half the cost of a new one.
“We sold three in the last week, maybe 20 since the beginning of the year,” said Mr. Harvey, whose family owns four Honda dealerships and two Mazda franchises in Alameda County, a suburb of San Francisco where Tesla has a car plant.
“We have three in stock now, and two are on the way,” he added. “They won’t stay around more than a few days.”
Welcome to the flip side of the backlash against Elon Musk, Tesla’s chief executive and one of President Trump’s closest confidants — a thriving trade in used Teslas.
The used Tesla business had been growing for years before Mr. Musk and Mr. Trump became close, but their bonhomie has turbocharged it.
After surging during the pandemic, the growth in new electric vehicle sales slowed in the last couple of years. That caused Tesla, the leading seller of such cars, to slash prices, pushing down the value of used models.
Then, after Mr. Musk joined the Trump administration, many Tesla owners across the country began selling their vehicles as a form of protest or simply because they no longer wanted to be associated with the company.
That movement has accelerated in the last two months as Mr. Musk has taken charge of what he and Mr. Trump call the Department of Government Efficiency. While not a government department, this federal office has been empowered by the president to fire government employees and dismantle agencies. Some of Mr. Musk’s statements and actions — including a stiff-armed hand gesture that many people interpreted as a Nazi salute — have angered Tesla owners and others who once admired the automaker.
Dr. Jerome Winegarden of Ann Arbor, Mich., said goodbye to his Tesla, a Model 3. Although he had driven it only 35,000 miles, he traded it in last month for a Ford F-150 Lightning electric pickup. The car fetched $18,000 as a trade-in, well below the original sales price of around $40,000.
“I just became increasingly concerned with Elon Musk and what he was doing, and the Nazi salute was the tipping point,” Dr. Winegarden, 54, said. “The symbolism was just too much. I felt shame just driving the car.”
Tesla did not respond to a request for comment.
In recent weeks, protests have flared at Tesla showrooms, and in some cases Tesla vehicles, charging stations and buildings have been set on fire or vandalized. A group called Tesla Takedown has been urging Tesla owners to sell their cars and investors to sell Tesla stock. In the past month, the group has organized dozens of protests at Tesla showrooms and other locations in the United States, Europe, Australia and New Zealand.
Overseas, the rejection of Mr. Musk’s politics and his association with Mr. Trump has had a pronounced impact on Tesla’s business. Its sales in 25 European nations fell about 45 percent in the first two months of the year, according to Jato Dynamics, a market researcher.
While auto analysts believe Mr. Musk’s political activities play a role in Tesla’s sales trends in the United States, the exact impact is hard to pin down, in part because Tesla does not break out its U.S. sales. European sales totals are easier to compile because new-car registration data is released monthly by government agencies.
It is clear that the number of used Teslas for sale in the United States is increasing. AutoTrader.com listed about 11,700 used Teslas for sale by dealers and private sellers in late March. That was up from about 8,000 at the beginning of the year.
According to another auto data provider, Edmunds, more Teslas are being traded in to dealers. In March, Teslas from the 2017 model year or newer made up 1.4 percent of the vehicles traded in for new or used cars and trucks purchased at dealerships — up from 0.4 percent a year ago.
Stephanie Valdez Streaty, director of industry insights at Cox Automotive, a company that owns AutoTrader.com and the car auction business Manheim, noted that Tesla’s sales climbed significantly in 2020 after it introduced the Model Y. And those higher sales could be a reason more used vehicles are now being sold and traded in.
She said she believed that Mr. Musk’s politics were hurting Tesla’s brand, “but we don’t have enough data yet to pinpoint exactly what” the impact is.
Enzo Costa, director of sales for the Patrick Dealer Group, a family-owned company that has eight dealerships in the Chicago area, said many customers were trading in Teslas, including 10 last week.
Unlike Mr. Harvey, the California dealer, Mr. Costa usually sends traded-in Teslas to wholesale auctions rather than selling them to individuals. That’s mainly because Tesla prices have been very volatile. In the past month, Mr. Costa said, he has seen the value of used Teslas fall 10 to 15 percent.
“The Tesla market changes so frequently that I’m not going to take any chances,” he said. “I’m sending them to auction to get top value out of them before they really start dropping.”
In California, Mr. Harvey said demand for affordable Teslas was solid despite Mr. Musk’s political endeavors. The cars appeal to many customers who cannot afford new electric vehicles but want to buy one to avoid California’s high gasoline prices.
“We see a lot of ride-share drivers, and younger, first-time buyers who wouldn’t ordinarily buy a Tesla,” he said. “For the time being at least, this has become a great opportunity for our dealerships and the customer.”
Robert Chiarito and Anusha Bayya contributed reporting.
