Autolist: Tesla Model 3 to have best-in-class depreciation

[KarenRei]

Article here:

Autolist had previously done studies on Model S depreciation, finding it to be the lowest among popular EVs (most EVs have depreciated very quickly, but Tesla has brand cachet that minimizes this - Teslas are seen as sexy, fast, and futuristic):

One could argue that the guaranteed buyback programme was a big contributor, but then again, selling prices on the open market have often been much better than buyback prices.

 

[JeffK]

Someone should make a version of that pie chart for ICEs

 

[Az_Rael]

I wish they would have updated their Model S study before coming to the Model 3 conclusion. Looks like they haven't touched the data since it first released a year ago. I would be curious of what the actual % that high mile cars are selling for now that we see them more.

Also, I always had heartburn with their use of list prices to track depreciation vs actual sale prices.

 

[KarenRei]

I wish they would have updated their Model S study before coming to the Model 3 conclusion.

The methodology section makes it sound like they did.

 

[Az_Rael]

The methodology section makes it sound like they did.

OK, it would be interesting to see those charts. It looks like they are now showing Model S prices as 7.9% lower than last year, which might affect where it falls on those curves. The charts above are the old ones. 50 Best Used Tesla Model S for Sale, Savings from $3,079

 

[Reciprocity]

Article here:

Autolist had previously done studies on Model S depreciation, finding it to be the lowest among popular EVs (most EVs have depreciated very quickly, but Tesla has brand cachet that minimizes this - Teslas are seen as sexy, fast, and futuristic):

One could argue that the guaranteed buyback programme was a big contributor, but then again, selling prices on the open market have often been much better than buyback prices.

This post was very informative, I have seen some of this before but this is much more complete. I think we all believed that similar quality EV will have a higher residual value then cars in or out of its class or segment. I would really love to see Model 3 vs a Camry or Accord because I know those cars hold their value and I believe Model 3 would be very competitive. Corolla here as a proxy of sorts shows how well the Camry might hold its value.

There was also an article today on CNBC that talks about how rapid drop in residual value or used car values are going to accelerate EV adoption because it changes the equation even though the EV costs more up front it has a much higher residual value and maybe the ICEv has only scrap value in 5-10 years from today. Depending on how long you keep a car, EV might be the smartest option no matter if it is out of your budget today:

JPMorgan thinks the electric vehicle revolution will create a lot of losers

The charts in the original post just look at 100,000 miles, I think the differences shown will only start to grow exponentially after 100,000 miles when ICEv costs of ownership skyrocket and EVs are still fairly cheap to maintain. The only major issue I see is battery replacement, but do we think you will be able to get a model 3 pack replacement for 1/2 the price you can today or even a 1/3 the price?

Because these cars will last longer and because of things like Tesla Network, we should only need about half as many cars, but you will also see people with no transportation today be able to afford a 10 year of Model 3 with a new pack and Tesla Network will enable more people to have access to transportation so that should double the demand leading to a flatting of the demand for cars over the next 10-20 years. By then, EVs would be so affordable to own or share that Tesla could actually have some problems. Hopefully by then, they will be dominating all the energy generation and utilities.

 

[internalaudit]

Sounds like Tesla might be bringing back those guaranteed residual values for trade ins/?

 

[Reciprocity]

Sounds like Tesla might be bringing back those guaranteed residual values for trade ins/?

They shouldnt have to. They only needed to do that because they where a new manufacturer and there wasnt any data. Now there is.

 

[internalaudit]

They shouldnt have to. They only needed to do that because they where a new manufacturer and there wasnt any data. Now there is.

Gotcha for the Model S. Reliability based on Consumer Reports have gone up significantly too for 2015 models and onward.

What data do we have for the Model 3? Of course with the federal tax credit, depreciation will be softened. Without a viable BEV competitor, depreciation will also be less steep.

Once those two are gone, depreciation might track other reliable automobiles' resale values but the Model 3 is bordering the entry-level luxury segment and depreciation on those are more marked that say a Honda Accord or Toyota Camry.

 

[SabrToothSqrl]

"Best In Class Depreciation". Kind of sounds like "Best in Class Pink Eye".

 

[Nuclear Fusion]

What percentage of cars have a REAL WORLD range of 500 miles?

 

[internalaudit]

This post was very informative, I have seen some of this before but this is much more complete. I think we all believed that similar quality EV will have a higher residual value then cars in or out of its class or segment. I would really love to see Model 3 vs a Camry or Accord because I know those cars hold their value and I believe Model 3 would be very competitive. Corolla here as a proxy of sorts shows how well the Camry might hold its value.

There was also an article today on CNBC that talks about how rapid drop in residual value or used car values are going to accelerate EV adoption because it changes the equation even though the EV costs more up front it has a much higher residual value and maybe the ICEv has only scrap value in 5-10 years from today. Depending on how long you keep a car, EV might be the smartest option no matter if it is out of your budget today:

JPMorgan thinks the electric vehicle revolution will create a lot of losers

The charts in the original post just look at 100,000 miles, I think the differences shown will only start to grow exponentially after 100,000 miles when ICEv costs of ownership skyrocket and EVs are still fairly cheap to maintain. The only major issue I see is battery replacement, but do we think you will be able to get a model 3 pack replacement for 1/2 the price you can today or even a 1/3 the price?

Because these cars will last longer and because of things like Tesla Network, we should only need about half as many cars, but you will also see people with no transportation today be able to afford a 10 year of Model 3 with a new pack and Tesla Network will enable more people to have access to transportation so that should double the demand leading to a flatting of the demand for cars over the next 10-20 years. By then, EVs would be so affordable to own or share that Tesla could actually have some problems. Hopefully by then, they will be dominating all the energy generation and utilities.

Your second paragraph makes a lot of sense because with used BEVs, the buyer is instantly able to take advantage of lower recharging (vs. gasoline costs in most North American cities) which is at least $1-2k/year but only if that EV lasts 10 years or more.

Gasoline is so much more expensive here at around $3.50/gallon but even my household driving at 20k miles a year, we're only consuming about 700 gallons of gasoline, which is $2,450. Post-warranty repair for Tesla battery and DU is still a great a great unknown and might actually eclipse fuel costs and regular ICE vehicle maintenance if these are done DIY.

 

[KarenRei]

Your second paragraph makes a lot of sense because with used BEVs, the buyer is instantly able to take advantage of lower recharging (vs. gasoline costs in most North American cities) which is at least $1-2k/year but only if that EV lasts 10 years or more.

Gasoline is so much more expensive here at around $3.50/gallon but even my household driving at 20k miles a year, we're only consuming about 700 gallons of gasoline, which is $2,450. Post-warranty repair for Tesla battery and DU is still a great a great unknown and might actually eclipse fuel costs and regular ICE vehicle maintenance if these are done DIY.

Running counter to this are tax credits, rapidly changing technologies, and worries over the technology's longevity. But US tax credits are on their way out, the rate of advance / price decline should start to slow, and the longevity is increasingly being proven (at least with the battery pack - Tesla is yet to prove itself with the rest of the drivetrain). In the long run, you're right - once the luxury of something being "new" is gone and the vehicle is just an old, showing-its-age mode of transportation, residual value largely comes down to operating costs - "How much does it cost to do the job that I want it to do?" Both maintenance and energy costs included.

 

[X Fan]

Only item I would question re: survey is whether the buyer market is sufficiently knowledgable re: EV range ( ie. 310 range is not achievable at highway speeds).

 

[Reciprocity]

Only item I would question re: survey is whether the buyer market is sufficiently knowledgable re: EV range ( ie. 310 range is not achievable at highway speeds).

Why is not achievable? It depends on how you drive. I think winter and cold weather is more of a shock. I usually just set the TACC/Autopilot and follow a vehicle and I tend to get better then rated range. Certainly if there is no one to act as wind break for me, the range would go down but not dramatically. Model 3 should be much better then the S/X on the open road.

 

[KarenRei]

Only item I would question re: survey is whether the buyer market is sufficiently knowledgable re: EV range ( ie. 310 range is not achievable at highway speeds).

Depends entirely on what your highway speeds are and what your climate is. Everyone's situations are different. Where I am, the highest speed limits are 90kph (56mph). Even in the US, interstate speed limits vary greatly, from 60mph in Hawaii to 85 in tiny parts of Texas - and in some places, people speed heavily while others don't. Obviously your particular situation strongly affects your actual range, for good or bad.

 

[KarenRei]

I think winter and cold weather is more of a shock.

Do you preheat?

 

[JeffK]

Depends entirely on what your highway speeds are and what your climate is. Everyone's situations are different. Where I am, the highest speed limits are 90kph (56mph). Even in the US, speed limits vary greatly, from 60mph in Hawaii to 85 in tiny parts of Texas - and in some places, people speed heavily while others don't. Obviously your particular situation strongly affects your actual range, for good or bad.

In some places we also have a 55 mph legal limit but the unspoken limit is 70-80 mph. In places where the legal limit is 70 mph you'll see 80-90 mph.

 

[KarenRei]

In some places we also have a 55 mph legal limit but the unspoken limit is 70-80 mph. In places where the legal limit is 70 mph you'll see 80-90 mph.

And then spots where people slow down to the speed limit because they know that the police in that county or town run the place as a speed trap and that's how they get their revenue It always struck me as a massive conflict of interest that police profited off of ticket revenue when I lived in the US...

 

[Barklikeadog]

What percentage of cars have a REAL WORLD range of 500 miles?

Not enough. My 36gallon tank is the greatest invention since the bikini