More Tesla Owners Trading In Than Ever Before, Here’s Why

It’s been a turbulent few months for Tesla, and the numbers tell a compelling story. A record number of Tesla owners in the United States have been trading in their electric cars, with February 2025 marking an all-time high.

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According to data from Edmunds, Tesla trade-ins made up 1.2% of all vehicles swapped at dealerships across the US in February, tripling from 0.4% the previous year. And the trend isn’t slowing, by mid-March, Tesla trade-ins had already risen to 1.4%, setting the stage for an all-time record. The problem is, Tesla isn’t selling as many new cars to balance out those trade-ins.

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A Brand on the Decline?

Tesla’s US sales dipped 10% in February, with every model, including the highly anticipated Cybertruck, seeing a downturn. All this despite a record-breaking month for overall EV sales in the US, proving that demand for electric vehicles remains strong. So why is Tesla struggling?

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Jessica Caldwell, Edmunds’ head of insights, points to several factors. Musk’s deepening involvement in politics has alienated some customers, concerns over Tesla’s depreciation are rising, and as the brand becomes more common in major cities, some early adopters are moving on.

The Australian Tesla Exodus

The impact isn’t just being felt in the US. Here in Australia, Tesla sales have taken a nosedive, with February 2025 recording the brand’s lowest numbers in two years. Sales fell a staggering 72% month-on-month, leading to a combined 65.5% decline for the first two months of the year. In real numbers, that’s just 2,355 Teslas sold, compared to 6,772 in the same period last year.

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Even with these figures, Tesla remains the best-selling EV brand in Australia, though for how much longer is the big question. The Model Y and Model 3 are still leading the charge, but the competition is catching up fast. BYD, MG, and even newcomers like XPeng are all vying for a piece of Australia’s rapidly growing EV market.

What About China and Europe?

The drop in Tesla sales isn’t confined to the US and Australia. In China, where the Australian-market Teslas are built, sales slumped 49% year-on-year in February. Cui Dongshu, secretary-general of the China Passenger Car Association (CPCA), didn’t mince words when addressing Musk’s political associations, stating, “As a successful businessman, one should be embracing 100% of the market… This is the unavoidable risk that’s come after he got his personal glory.”

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Over in Europe, things aren’t much better. Tesla sales fell 44% in February, following a 45% dip in January. The sharpest decline was in Germany, where Tesla’s Berlin-based gigafactory saw month-on-month falls of 59.5% and 76.5% in January and February, respectively.

The Bigger Picture for EV Buyers in Australia

Tesla has long been the poster child for EV adoption, but these numbers highlight a shift in consumer sentiment. While Musk’s politics might be a contributing factor, it’s also a sign that Tesla is no longer the only name in the game. Australian buyers have more choices than ever, with brands like BYD offering compelling alternatives at more competitive price points.

Additionally, Tesla vehicles have been targeted in a wave of vandalism in the US, leading to President Trump declaring such attacks “terrorist behaviour.” While this hasn’t been a widespread issue in Australia, it adds another layer of controversy to Tesla’s brand image.

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So, What’s Next?

For Tesla, the challenge is clear: regain consumer trust, innovate beyond the competition, and keep its vehicles desirable beyond just the cult of Musk. Meanwhile, for Australian EV buyers, this shift could be an opportunity. With more brands entering the market and Tesla no longer holding a monopoly on cutting-edge EV technology, we could see even better options at more affordable prices.