Are current new ICE car buyers in for a huge depreciation surprise?

[Deeppurple]

Bloomberg reports that Tesla has overtaken GM in market cap and that 2/3rds of all new car sales were SUV sales:

Sounds like the stock market is betting on Tesla's success, while the street is still in the past century--buying up gas burning SUVs. I wonder what's going to happen to the value of those SUVs and other ICE cars in just a few years after the streets will start filling with new self driving EV's starting in mid 30s. I personally think that any new expensive ICE car buyer is in for a huge risk for additional depreciation due to future decrease in the demand for gas burning vehicles.

 

[Saghost]

The timing isn't clear, but I'd agree that at some point in the not too distant future ICE cars will start losing more value because the used market will want EVs instead.

 

[FlyF4]

Agree, but I think I'll be dead before that occurs.

 

[Deeppurple]

Agree, but I think I'll be dead before that occurs.

Oh, come on, be more optimistic. Nederland is banning all new ICE sales by 2025:
Netherlands Moves To Only Allow EV Sales By 2025 - End Of Gas, Petrol

 

[Rogerroger60]

Interesting. I am here because I do like tesla x but so far I only buy ICE. So far I only see a huge depreciation on teslas I am talking 30-50 k off just by driving 6k kms. That's crazy. Right now I have a Range Rover LWB autobiography and getting calls for 30k over what I paid. Waiting to pick up a x p100d with good discounts. It's going to be a while when good ICE cars will loose a lot of value. Teslas are like like iPhones It's a high production auto it will loose more value and I am not just giving my opinion. It's what's happening.

 

[Dutchie]

Interesting. I am here because I do like tesla x but so far I only buy ICE. So far I only see a huge depreciation on teslas I am talking 30-50 k off just by driving 6k kms. That's crazy. Right now I have a Range Rover LWB autobiography and getting calls for 30k over what I paid. Waiting to pick up a x p100d with good discounts. It's going to be a while when good ICE cars will loose a lot of value. Teslas are like like iPhones It's a high production auto it will loose more value and I am not just giving my opinion. It's what's happening.

Are you sure? I was looking at some CPO's and cofigured it new. I don't come near your numbers even when the CPO had lots more miles..

 

[FlyF4]

Interesting. I am here because I do like tesla x but so far I only buy ICE. So far I only see a huge depreciation on teslas I am talking 30-50 k off just by driving 6k kms. .

Exactly what I am thinking. Teslas will take a much bigger hit than ICE cars in the near future.

 

[Erleichda]

Lots of stats on depreciation, google it. It's similar to other comparable luxury cars like Mercedes S class. No surprises for those buyers.

 

[Deeppurple]

I beg to differ so far on Tesla's depreciation. Perhaps you guys have highly optioned cars where there is truly some serious depreciation, just like any other highly optioned car. Consider my numbers:
$91,500 that I paid for my 2015 85D AP1 with no other options
less $7,500 federal rebate
less $6,000 CO state rebate
= $78,000 net before tax

After 2 years and 35K miles based on used car comparable searches for AP1 cars with 85D mine is still worth around $62K private party value.
78,000 - 62,000 = 16,000 2 year depreciation
or $8,000 per year
less $2,000 / yr fuel savings
less 500 / /yr (at least) on maintenance savings (yes, I remember vividly replacing breaks, bells, and whistles on my Porsche and Infinity at around 35K, which is not the case with my Tesla so far.

= $5,500 per year adjusted depreciation for the first 2 years. Please try finding another $100K car with only 5.5K depreciation.

 

[RobStark]

Exactly what I am thinking. Teslas will take a much bigger hit than ICE cars in the near future.

Tesla has best in class depreciation. At least in the US not sure about foreign markets.

As a percentage a $100k car will have greater depreciation than a $20k car.

 

[Electroman]

While taking $7500 fed tax credit out of the equation for both purchase and resale value is the right thing, but doing the same for $6K CO rebate and comparing against resale offers outside of CO skews your equation in your favor.

 

[Rogerroger60]

Just check out the inventory model x.
$40k discount because it's a AP1 and not AP2 model x p100d. Which ICE demo Range Rover sells for $40k less

 

[Deeppurple]

... but doing the same for $6K CO rebate and comparing against resale offers outside of CO skews your equation in your favor.

Actually, used car values in Colorado tend to be higher then in other states, especially EV's because of relatively higher adoption rate at least in my area of Boulder. I do realize that other states do not offer such generous rebates, though, that's why I said that these were my numbers applicable to CO, but even CA, and GA had rebates very close to CO at $4,500 and $5,000 respectively.
The point I was trying to make is Model S and X could have $40K+ in options--and that's what will depreciate the most. The base Teslas have not depreciated that much, as compared to other cars in the same segment--in fact, Tesla's decline in values appears to be the lowest so far in that group.

 

[182RG]

Tesla has best in class depreciation.

Low volume, niche car up to this point.

 

[JOEV1]

Depreciation is one... being allowed to drive in city areas will be another.

 

[Eclectic]

Bloomberg reports that Tesla has overtaken GM in market cap and that 2/3rds of all new car sales were SUV sales:

Sounds like the stock market is betting on Tesla's success, while the street is still in the past century--buying up gas burning SUVs. I wonder what's going to happen to the value of those SUVs and other ICE cars in just a few years after the streets will start filling with new self driving EV's starting in mid 30s. I personally think that any new expensive ICE car buyer is in for a huge risk for additional depreciation due to future decrease in the demand for gas burning vehicles.

You're basing your argument, in part, on market cap??? There was a time when Twitter had a market cap close to Tesla's current market cap...

 

[gimmi80]

Teslas are like like iPhones.

Used iPhones have a huge market and are sold for a high price compared to others (LG, Samsung, etc)

 

[FlyF4]

Used iPhones have a huge market and are sold for a high price compared to others (LG, Samsung, etc)

Ok, if that is the case that Teslas are like iPhones, then I guess I can expect to sell my Tesla in 2 years for 1/2 what I paid. That's what happened when I sold my last iPhone

 

[RobStark]

Used Tesla Model S sell faster and for more money than peers, study says

 

[182RG]

Depreciation is one... being allowed to drive in city areas will be another.

This will be a loooooong time coming in the United States.