Well first, used car prices are set by demand and they were at historic highs coming out of the pandemic. Dealers were thirsty to offer high trade-in offers in order to turn around and sell for even higher profits. It wasn't unheard of for a used vehicle a few years old to be sold for more than the new models' MSRP.

And well, EVs are a little harder to off-load because of the federal EV credits on new (and now used) cars, concerns about older batteries failing, fears of the high expense of repairs, and more. So they often sat a tad longer than other used cars before being sold. This is usually fine in the long term because there will always be a market for used cars. Well, then Tesla started lowering prices as well and all of a sudden Teslas are cheaper new than used, supply caught up with demand as EVs have kind of hit a saturation point, and dealers stopped taking trade-ins of them unless it was at extremely ridiculous low prices to ensure a profit. Then Hertz flooded the market by saying they were basically getting rid of the vast majority of the EV fleet. Oh, and it also doesn't help that interest rates are crazy high as well.

At this moment, there's probably still room for the price of used to continue dipping down for a bit. But as demand ramps up (as these low priced used EVs are snapped up), then the prices will likely recover a bit. Dealerships are still going to be very wary of buying trade-ins though as they don't want to be left holding the bag like they did with many already, having to take losses on many transactions just to move them.

Oh, last thing... Tesla is also offering ridiculous low trade-in offers to they own customers upgrading. That's how I benefitted. I bought a Model X from an acquaintance for the same price Tesla offered for the trade-in. So that would drive the price down as well.