Model S Depreciation significantly higher than expected

[schonelucht]

Do we have any idea if Tesla would ever offer better battery packs to older MS's? I mean it is theoretically possible but it doesn't mean they'll do it. I don't think they have done it yet, have they?

I will take a bet they won't. Just as they didn't offer a 70 upgrade for existing 60 customers. Just as they are not now offering 60/70 to 85 upgrades. From their perspective it is better to sell a new car to an existing owner looking for an upgrade. The roadster is different because they actually don't have any new roadsters to sell those customers. If they ever discontinue the model S line, that's when I would expect they'll revisit the question and maybe start offering upgrades.

 

[smsprague]

Another comparison - work associate who is a former GM employee so he gets GM cars for a set Employee price no negotiations.

2012 CTS V - 14,000 miles - original MSRP $85,000 - offered $40,000 in trade toward a new CTS V

 

[ecarfan]

I do believe the battery or rather the unknown about the battery is hurting resale values. My 6.5 year old Roadster has lost over 10% of range. We are told a battery is $42,000 or 70% of the going used rates. This could change radically if Tesla offers an upgrade with more range at say $18,000 proving that batteries WILL be cheaper and better. Proof is much better than a hope and a dream.

My 4 year old Roadster with 22K miles on it shows about a loss of about 13% which is more than the average for Roadsters of that age and miles. However, the Model S BMS and battery chemistry appears to be far superior and battery capacity loss is turning out to be much less than the Roadster. Tesla has learned a lot in just a few years.
I have confidence that Tesla vehicle batteries will continue to improve in every way in the future based on the company's track record to date, and this will result in less depreciation than other ICE vehicles in similar price ranges. In addition, once Tesla has an adequate supply of batteries and can offer replacements at a reasonable price (and it seems very likely that will happen within a decade) used Teslas will have an advantage that no ICE can match.
When Roadster owners can buy a new battery for their cars and suddenly have far more range then when the car was new, that will really capture people's attention.
The reality is that in general new cars depreciate rapidly after purchase, and so do Teslas. Though a decade from now there will be many Teslas on the road with many hundreds of thousands of miles on them that will run just like when they were new, and they will still have significant resale value. Even if their battery capacity is only 75% of new they will still be very useful cars, since charging stations will be literally everywhere. People who can't envision this scenario are stuck in the past and refuse to see that EVs are no longer glorified golf carts running on lead acid batteries.

 

[green1]

Doing the math on the OP's car brings it to just around the same amount if he had a RVG, and if he didn't put too many more miles on it before the 36 month mark.

In other words, the title of this thread should be "Model S Depreciation exactly as advertised"

 

[eloder]

I think EV depreciation in general will slow substantially with time, even EVs like Leafs.

Right now a new Leaf battery costs $6k with installation (I believe was the last number given by Nissan) and turning in the old pack. A <10k mileage Leaf plus a new battery pack can be had for less than the price of a new Prius.

Even a Leaf without the battery pack still makes an incredibly cheap commuter vehicle for many people. 20% battery depreciation doesn't mean anything if your commute is 30 miles roundtrip.

If a new Leaf pack can be retrofitted, that'd be even more amazing. Tesla is a bit trickier as the pack is already amazing and will likely last 1-2 decades with ease for most people, but I think people will realize that the car itself will last quite a while for major components. Once the price of parts declines I imagine Model S value will rise quite a bit.

 

[ohmman]

I hesitate to resurrect this thread, but I thought of it the other day when I passed 20k miles on my MS. Because my MS replaced my nearly exactly 20 mpg ICE, I realized that I'd saved right at or about 1000 gallons of gasoline. And then it hit me that you could think of the depreciation as offset by those savings, if desired.

In the case of the OP, 54k miles and let's say a more fuel efficient vehicle in the 25 mpg range would mean 2160 gallons of gasoline, at an average price of $3.25 (is this fair? I have no idea what gas goes for these days...), is about $7020 of gas savings. To be thorough, one would have to reverse out the energy put into the vehicle - so you'd have to look at the consumption of the vehicle at the meter, let's say 350 Wh/mi. In the OPs state of Arkansas, the electricity rate at its highest appears to be 0.078 per kWh. Choking down the fact that this is lower than my lowest TOU EV rate here in PG&E land, that adds up to about $1474. So net savings of about $5546 on a very conservative end (I used the highest electricity rates, a seemingly low price of gasoline, and an average mpg).

While we can agree trade-in value isn't market value, that has a bit of an impact when doing the depreciation calculations.

 

[AmpedRealtor]

In two years of driving, I've saved 555 gallons of gasoline, or about $1,700 at $3/gal. My previous car was a Prius with average of 45 MPH. My Model S had depreciated by almost 40% in the same time frame, to the tune of over $40,000. Not comparable in the slightest.

 

[ohmman]

In two years of driving, I've saved 555 gallons of gasoline, or about $1,700 at $3/gal. My previous car was a Prius with average of 45 MPH. My Model S had depreciated by almost 40% in the same time frame, to the tune of over $40,000. Not comparable in the slightest.

I know I resurrected this, and it's been a while, but I believe the assertion was we should be comparing similar MSRP vehicles. Your Prius wouldn't qualify in that regard, so I don't think it's a good data point. But I'm glad it held its value!

 

[Moto548]

I'm also annoyed by how quick people are to point to model year in terms of value, but we know Tesla doesn't really "do" model years, and they are constantly updating throughout the year....I see it in the ads often where people are pointing to a MS of the same model year to say that another is overpriced, when really the cheaper one was delivered early in the year vs. late in the year for the more expensive one. For a 2013, that means the difference between one of the first few thousand produced and all the teething and early fitment issues, vs #26000 or later by the end of the year and all the upgrades and improvements such as "D" battery, parking sensors and power mirrors. For 2014, it determines whether you have autopilot hardware or not. They're not all created equal, yet people seem to be unaware of that fact and try to lump them all together like ICE cars.

I think all of you November & December deliveries that were told it wouldn't matter when your car was delivered had a right to be concerned and might have been better off waiting until January even though you would end up with essentially the same car.

 

[rcarpen22]

I think for every person who bought a new MS and is concerned about depreciation, there are about 20 people who can't afford a new one waiting on a $35,000 used one with reasonable options and mileage. I'm still wondering when that will happen. CPO 60s are down to $50k with fewer options. I'm guessing another price drop in the secondary market will occur when the MX is released. I had a program car reserved and was ready to go, but then I found out that I had to pay sales tax on the full amount of the car up front on the lease. That just about doubled the down payment and I realized at that moment that I am poor. Another 10 or 15k off and I'll be all over a used one though.

 

[mshuang]

I'll second that. In the long term, I think EVs in general, and the S in particular, will hold their value better than ICE cars, but we need more time. Thankfully you couldn't pry my high-mileage 2012 S out of my hands if you tried!

I believe there are a handful of cars out there that have already surpassed 100k miles. I think you'll see a few minor headlines when the first cars start hitting 200k or 300k miles, and perceptions might start to change, but it will likely still take a while beyond that for it to have a noticeable impact on average resale values.

I agree. The Model S is still too new to be reflected accurately in current resale prices.

I wasn’t crying about the loss of resale value… just pointing it out to others who may not be aware of what I considered significant loss.

Exactly my sentiments! I only have one vehicle, I’m retired, and we travel a lot. Thus the high miles. Also, keeping the Model S, assuming it is not possible to get a better price, is something I need to consider.

I think those interested in resale values of their vehicles should actually consider leasing -- although with your mileage, that probably would have hurt even more.

The reality is that in general new cars depreciate rapidly after purchase, and so do Teslas. Though a decade from now there will be many Teslas on the road with many hundreds of thousands of miles on them that will run just like when they were new, and they will still have significant resale value. Even if their battery capacity is only 75% of new they will still be very useful cars, since charging stations will be literally everywhere. People who can't envision this scenario are stuck in the past and refuse to see that EVs are no longer glorified golf carts running on lead acid batteries.

Yes. I think one can look at the market for second hand Roadsters -- they've held their value up extremely well, and the Model S will likely as well.

I think for every person who bought a new MS and is concerned about depreciation, there are about 20 people who can't afford a new one waiting on a $35,000 used one with reasonable options and mileage. I'm still wondering when that will happen. CPO 60s are down to $50k with fewer options. I'm guessing another price drop in the secondary market will occur when the MX is released. Another 10 or 15k off and I'll be all over a used one though.

I think a $35,000 Model S won't really be available until sometime after the Model 3 is released, if ever -- I think the resale price of used Model S' will likely remain above $50,000 for the forseeable future.

These cars are not like ICE, and until the Model S gets a significant refresh there's very few MS' entering the resale market.

(People who sell their Model S' are often buying new Teslas)

 

[evluxury]

I think a $35,000 Model S won't really be available until sometime after the Model 3 is released, if ever -- I think the resale price of used Model S' will likely remain above $50,000 for the forseeable future.

I really hope so! I just bought a CPO 2014 MS 85kw (pano, dual chargers, tech, hifi, air suspension) w/ 34k miles for $55.5k. Even the cheapest 2013 S60 was still going for ~$50k, so I hope this is an indication that these cars are finally starting to hold their value.

I only plan to hold the car for 3 years and then sell in 2020 (will still have another year of CPO warranty and 2 years of powertrain), so hopefully it's able to hold its value somewhat well until then, where I can still get $35-40k or so for it.

 

[Az_Rael]

Even the cheapest 2013 S60 was still going for ~$50k, so I hope this is an indication that these cars are finally starting to hold their value.

Eh - there have been plenty of "cheap" ones sold last year for much less than $50k. They never stayed on the site long though.