Devaluation of HW1?

[Drone Flyer]

Its an inevitability. AP1 customers waited as long as 1 year for what they have now. AP2 has more cameras and is thus capable of doing so much more. Elon's vision is FSD so Tesla is putting all their resources towards that, it would be naive to believe otherwise.

Personally if im buying a high priced car, i want it to be as future proofed as possible. Go HW2.

What a pile of ^*&*%$&(!
FSD will never come into fruition for 10 years. Get over it!
I's not because of the technology but because of bureaucratic red tape from legislators around the world.
Go with AP 1. It's the best it will be for a long time.
And besides, as I keep pointing out, if you want total self driving, take a cab!

 

[Saghost]

Its an inevitability. AP1 customers waited as long as 1 year for what they have now. AP2 has more cameras and is thus capable of doing so much more. Elon's vision is FSD so Tesla is putting all their resources towards that, it would be naive to believe otherwise.

Personally if im buying a high priced car, i want it to be as future proofed as possible. Go HW2.

But this wasn't the question asked. Personally, if I were buying now, I'd buy AP2 without hesitation, because I like tech toys and would really like to have true FSDC at some point in the future.

However, you pay a significant price for the brand new car. The question on the table is whether the AP1 cars are going to experience a massive drop in value as AP2 improves, and I don't think they will. I certainly don't think the drop in value would be enough to overcome the inherent new car depreciation trend.

It's also obvious that Tesla isn't "putting all their resources towards FSDC." If they were, they wouldn't be investing billions in making the gigafactory and Model 3 happen. Yes, it's a Tesla goal, and yes, I think it'll be here sooner than a lot of folks expect, but it's just one of many things Tesla is working on simultaneously.

 

[hariclt]

I don't know what specific models or features you are looking at ... but in terms of CPO value of AP1 cars have not gone down that much. On super high end models over $100k - yes those have gone down .. mainly because at that investment level you will only settle for latest and greatest.. I personally think that going with AP2 is the way to go .. go with less features to make your budget .. the car in any configuration is absolutely amazing. And remember - you likely won't want to own the car out of warranty unless things get a lot better in terms of after market service options.

 

[Tam]

...I's not because of the technology but because of bureaucratic red tape from legislators around the world...

There are places who are friendly to Autonomous Driving Technology and allow testing thus far.

There were much press on the very first 2016 Singapore and second Pittsburgh, PA autonomous public-rider tests but we hardly heard of any progress on their performance at all (can they avoid slamming under a tractor-trailer in Florida scenario or a street sweeper in China scenario...)

Some have gone beyond allowing testing but also for public use:

Since 2016, Florida's law allows an autonomous car without drivers (not just for tests but for actual use.)

Michigan passed a liberal 2016 law to allow cars without driver controls (steering wheels, brake pedal, accelerator...)

I believe if technology is good enough, they would have no trouble in proving their performance in those 2 states Florida and Michigan and they won't have an excuse of "red tape".

 

[ecarfan]

What a pile of ^*&*%$&(!
FSD will never come into fruition for 10 years. Get over it!
I's not because of the technology but because of bureaucratic red tape from legislators around the world.
Go with AP 1. It's the best it will be for a long time.
And besides, as I keep pointing out, if you want total self driving, take a cab!

As @Tam has pointed out, laws allowing autonomous driving are already becoming reality. I see autonomous cars regularly where I live.

I have no idea what the situation is in whatever part of Canada you reside in, but in the US autonomous cars are on the road and legal already in some areas. That trend will continue.

 

[xyeahtony]

What a pile of ^*&*%$&(!
FSD will never come into fruition for 10 years. Get over it!
I's not because of the technology but because of bureaucratic red tape from legislators around the world.
Go with AP 1. It's the best it will be for a long time.
And besides, as I keep pointing out, if you want total self driving, take a cab!

what emotion. looks like someone is feeling insecure about their AP1 car lol. Like i said, more cameras/sensors = more capability. Many posts here saying AP2 handles certain things AP1 couldn't and does it better. Eventually it'll be at parity (closer with the new update), and eventually it'll surpass what will be 3 year old technology.

As for the FSD lack of confidence, well like others have stated many states and locales have FSD friendly legislation already. "take a cab," great advice. Why should people take a cab when they have a luxurious zero emission vehicle they dont have to pay do the same thing? #eyeroll

 

[GasKilla]

If I were buying a new Tesla I wouldn't pay for the FSD until it was fully active and allowed in the state that I live. Who knows how long that will take or when that will happen. All I know is it will never happen on my AP1 car, but I did put a deposit down on a M3 so that will be our family FSD car when that happens.

Will all the FSD M3s drop the value of the MS & MX? Everything is a gamble but no matter which Tesla you get it will be the best car you've ever owned. I'm sure you know this but if you order a new Tesla or pick an inventory car you can use this link to get $1000 off Referral | Tesla

 

[robby]

I expect the value of HW1 cars to plummet when FSD becomes available for HW2. That is the inflection point where HW2 becomes an order of magnitude better than HW1 rather than an incremental improvement over it. When fully autonomous, HW2 cars become the first of a next generation that can earn income on the Tesla network, provide the convenience of real-time summoning, and allow their drivers to fully reclaim the lost time of commuting. All of these things create a brand new and much improved driving experience.

This is why I am very sad as a HW1 owner that Tesla did not provide an upgrade path to HW2. Judging from Elon's statements about the perceived economics, I believe they have underestimated the amount of depreciation that HW1 will incur solely from HW2 when FSD is ready (and thus, what the market would bear on retrofit pricing). I am hopeful (but not particularly optimistic) that they will reconsider in a few years when third parties can alleviate their congested service centers.

If I were buying today, I'd try hard to get HW2. The only thing that will make me want to upgrade my car is the ability to push a button, go to sleep, and wake up at my destination. It sounds like having HW2 would eliminate the need to buy a new car for that.

 

[BrettS]

I expect the value of HW1 cars to plummet when FSD becomes available for HW2. That is the inflection point where HW2 becomes an order of magnitude better than HW1 rather than an incremental improvement over it. When fully autonomous, HW2 cars become the first of a next generation that can earn income on the Tesla network, provide the convenience of real-time summoning, and allow their drivers to fully reclaim the lost time of commuting. All of these things create a brand new and much improved driving experience

I'm sure that will affect the resale value of HW1 cars to some extent, but I'm not sure about plummet. As has been mentioned before, the comparison here is the pre AP cars vs AP1. Pre AP cars definitely have a lower value than AP1 cars of similar age, but it's not a significant difference. The value of pre AP cars hasn't plummeted even though autopilot is available on newer cars.

 

[robby]

I'm sure that will affect the resale value of HW1 cars to some extent, but I'm not sure about plummet. As has been mentioned before, the comparison here is the pre AP cars vs AP1. Pre AP cars definitely have a lower value than AP1 cars of similar age, but it's not a significant difference. The value of pre AP cars hasn't plummeted even though autopilot is available on newer cars.

This is true, but I see AP => FSD as a much bigger improvement than original => AP. I expect the value gap to follow proportionally. Obviously as a HW1 owner, I'd love to be wrong about the latter bit.

 

[theslimshadyist]

Always buy the latest and greatest that you can afford.

 

[whttiger25]

HW2 was supposed to reach parity with HW1 more than 4 months ago. It's still not there. I'm beginning to wonder if it ever will. Forget about FSD; it's even further out. At this point, I view my AP2 MS functionality as an expensive and dangerous toy.

With HW1, you'll also be getting lifetime supercharging. If Tesla can't get the HW2s cars to work, THEY may be the ones to lose resale value...right after the HW3s come out.

It will be interesting to see what AP/FSD hardware gets changed for the M3. Based on how difficult it seems to be for Tesla to get HW2 hardware to work, the M3 might have the equivalent of a HW2.5 or HW3.

You have so little faith in tesla engineers to suggest they may not able to do what Mobileeye engineers did?

 

[cab]

As others have stated, buying a luxury car with a concern about resale is an almost no-win proposition. We picked up a CPO P85+ about 9 months ago (pre-AP) - it had already lost half its value (even taking into account rebates) and continues to depreciate rapidly. Given that my wife and I both work from home and it doesn't even get driven that much, I told a friend of mine "This is what boat owners mist feel like when they buy an expensive boat, take it out a few times at the beginning and then just watch it depreciate in the garage with progressively less use". Given the initial depreciation hit (and my goofy use-case), I'm fairly glad I didn't buy new...ouch.

 

[davidc18]

You will be happy with either AP 1 or AP 2. I always suggest getting what you will be happy with because you don't want any regret over such an expensive purchase. We have over 55,000 miles on AP 1.0 and I can not imagine how AP 2.0 will be "better" on the interstate. If they are ever able to turn on the ability to navigate local roads including stop signs and street lights, that will be a worthwhile improvement. Until then, remember you won't be able to get AP 2.0 today unless you are will to shell out for a new MS/MX. The general public getting ahold of the Model 3 is a long way off.

 

[beero-rad]

I'm sure that will affect the resale value of HW1 cars to some extent, but I'm not sure about plummet. As has been mentioned before, the comparison here is the pre AP cars vs AP1. Pre AP cars definitely have a lower value than AP1 cars of similar age, but it's not a significant difference. The value of pre AP cars hasn't plummeted even though autopilot is available on newer cars.

I hope you are right. I have a an AP1 car now and am very nervous about keeping it for the usual 3-4 years. feel it will drop big time at that point given the pace of technology

 

[u00mem9]

Realistically, the model 3 is going to be released with roughly the current half-arsed AP capability. AP1 and AP2 are going to be in very similar capabilities forever...driver must pay attention and car is almost good to go on freeways.

The OP question is based on the possibility that FSD would ever be achieved, but that isn't going to happen, so AP1 and AP2 prices will never be very different.

When an OEM does release level 4 autonomy, it won't crush Tesla resale values, and it probably won't be Tesla.

 

[SMAlset]

I don't know about AP1 devaluing the car. I think a lot of people just love driving the car and maybe aren't comfortable or feeling a need to use all the features. There will always be those that will want the latest and greatest too. That said I know we don't use all the features we have right now with AP2 and don't know if we ever will. An older car that's been nicely taken care of with mature AP1 still holds a lot of value IMO particularly for someone who would be reaching to buy a new S/X. I also think Tesla wants to try to maintain a high level of value in all of their cars especially compared to other manufacturers or ICE cars. The free unlimited supercharging will always be a carrot to any buyer and I think they will continue to maintain and improve the software where possible. The fact that the car is all electric, has great acceleration and styling and is fun to drive hasn't changed. AP1 isn't anything to disregard either. Lots of value there. I see range being more of a limiting factor for people when looking at older cars but then there are plenty of people who don't do much long-distance driving, ourselves included.

As for competition with a Model 3, some people might like the newness of a car and go that route but for the power and passenger/cargo space of the car, I personally would rather have an older well maintained S. Also see the size and weight of it being a proven safety factor. The exterior styling of the Model 3 is very attractive but I thought our Model S was pretty minimalistic and can't imagine loosing a lot of what our S has to pair down a Model 3 even more. But still to be seen.

 

[FlatSix911]

@samiam

Historically, Model S prices have held up very well (better than ICE vehicles in the same class) despite Tesla constantly rolling out new technology. This includes the effects of AP1 rollout on pre-AP cars. Here is a discussion of one pretty good study and there are others that show basically the same thing: Tesla Model S retains its value better than gas-powered cars in its segment, losing only 28% after 50k miles Having said that, all things being equal, if you can find an AP2 car in your budget I would not be surprised if it depreciated less over time than a comparably priced AP1 vehicle given how quickly AP2's capabilities are improving based on reports of AP2 owners (I have AP1). If you can only find an AP1 car that fits your budget then based on Model S's track record I think it is a good bet that the depreciation will be less than ICE cars in the same class.

This graph is a great illustration of your point ... both AP1 and AP2 will perform far better than a comparable ICE vehicle.

 

[beero-rad]

so this is what is blowing my mind. i keep reading all these articles and posts about how awesome tesla resale is. i got my car appraised at carmax today and they wanted to give me $78k for it. my car is a 2016 with 9k miles and with the options you see below and in perfect condition.

something isn't adding up...

 

[BrettS]

so this is what is blowing my mind. i keep reading all these articles and posts about how awesome tesla resale is. i got my car appraised at carmax today and they wanted to give me $78k for it. my car is a 2016 with 9k miles and with the options you see below and in perfect condition.

something isn't adding up...

From what I've read, carmax is a great place to sell cars that they want... which are typically popular low mileage recent cars. Since they can sell those cars directly they can offer a bit more for them. They advertise that they will buy any car, but they will lowball you on ones that they don't want to sell (including high end electric cars and older or high mileage cars) because all they do with those is take them to an auction. Carmax is not the place to sell a tesla.