> No, the real problem is that the true market-clearing price for most of these vehicles was $7500-$10000 less than MSRP (which was set knowing the regulatory environment), combined with the false calculation of depreciation based on MSRP instead of market price.

This seems like it. If you paid $29,000 for something with a $36,500 MSRP because of a $7500 credit and a few years later it's worth $22,000, the amount of depreciation you're calculating by starting from MSRP and the amount that the buyer actually experienced are off by more than a factor of two.

Meanwhile the credits caused more new sales than there would have been otherwise, which means more cars of that model available in the used market, and supply and demand is still a thing.

It's not evidence that people don't want them, it's evidence that if you subsidize something the price comes down.

Don't know about the us but all models mentioned were well over 50k (most nearing 75k+) with incentives where I live and thus fall in the top 1% income bracket range. And expensive mass produced cars lose value faster than cheaper models as they have to be sold second hand to the next lower income bracket which is an exponential curve hence the high dropoff. This used to be the same for ice cars.

Of course both can be true as well.

I wonder if COVID distorted the market enough to show up here?

I have anecdotes of friends/family/coworkers who bought cars (or second cars for the household) to avoid public transport.

And 2nd hand prices for cars gere (Australia) went batshit insane for a while during and as we chose to pretend that COVID was over - and those artificially inflated prices are mostly over now.