Is Tesla making their resale value obsolete?

[kevinarea]

The family and I have been planning to buy a Tesla for the last 6 months. We plan on getting the X but the 3 is a more affordable option that we might try first.
Looking at X's from 2016: the 75D batteries "were" rated at about 240 miles and the 90D at 260 miles. I read somewhere that the range decreases by 15% over 40k miles (sorry, I have no link. My son actually told me this). So based on this assumption, the ranges will be about 200 and 220.
The new Model X only has a long range option and it has a 325 mile range.
Looking at sold 2016's from TeslaCPO.io and confining it to only 6-seaters and 90D batteries (since this is closest to the 100D in the new X's), it can be bought for an average of $80k.
The new 2019 Model X 6-seater is $91.5k (I wont consider the tax incentive because I am thinking about what the costs will be in the future).
2016, range=220 miles, cost=$80k
2019, range=325 miles, cost=$91.5k

I haven't even gotten into the AP features which for most 2016's are not upgradeable to FSD. But since I dont have good 2017 sale numbers, I will just use what I have.

So my FIRST question to all of you is would you prefer a Model X with about 40k miles on it and a range of 220 miles or a new Model X with a 325 mile range and $11.5k more?

Without getting into details (because we probably don't even have to), paying just $11.5k more for 100 miles more range is WAY worth it. And that doesnt even take into consideration wear and tear, or mileage on the used vehicle or that it has older AP technology.

If Tesla technology keeps advancing, then won't that make their older vehicles seem TOO old?
My SECOND question is, is Tesla so damn good at coming up with better technology that they will make their older vehicles obsolete or at the least hard to sell?

 

[Az_Rael]

If Tesla technology keeps advancing, then won't that make their older vehicles seem TOO old?

Yes. Take a look at the resale values of the non-AP Model S’s (pre-2014). Those are (still) amazing EVs that sold for upwards of $100k new, but no one cares now because they don’t have Autopilot.

So in 5 years when Tesla is up to Robotaxi level, no one will care about your AP1 X or even your AP2 X with the Gen 1 FSD Computer.



Edit: The moral here is every Tesla you buy today will become “old” sooner than a traditional make that only updates every 5 years. So, buy the car with the features you like today and just enjoy it. If that is the AP1 X, then you saved some $$ on the depreciation curve that you avoided with the new X.

 

[Bridor]

You can get used Model X vehicles in the 60K range - so look around. Check out car gurus and craig's list. I have a 60D with over 150K miles and I just completed a round trip to Washington state with my 180 miles of available range.

Brent

 

[turtlesz]

Those used car prices from Tesla will continue to fall, don't think anyone in their right mind would buy those since the Raven introduction and price drops. The X has held it's value pretty well overall but I'd only recommend buying new, particularly at the end of the quarter when they have adjustments on inventory cars. The new models have improved greatly and range is King.

If you don't need the space I highly recommend looking into the 3 long range. Excellent car, fun to drive, easy to use. I prefer the single landscape screen over the 2 screen setup on my X since it makes night driving clean and unobstructed. AC works very well. Overall it's a comfortable sedan and an incredible value for what your getting.

Lastly depreciation is pretty unpredictable on Tesla's. I bought a new 3 in April 2018 and it was $61k after taxes but the same car was being sold in the 40s this year. I bought a new inventory X this year for 82k that had a original msrp of $160k. Basically it changes wildly depending on when you buy.

 

[SaniDel]

My wife and I are also planning to buy a Tesla Model X and have the same concerns.

Teslas change rapidly ... partly because of technological advances, but also because Tesla doesn't 'respect' the "model year" convention of traditional automobile manufacturers. Improvements are introduced when they are ready regardless of the season, over-the-air updates keep our Teslas current and there are many more 'versions' of each model Tesla so each vehicle is ... well, maybe not unique, but certainly unlike traditional automobiles.

This deprecates the residual value of sold/used Teslas and justifies continuous price changes for new Teslas as features are added, eliminated or made standard or optional. What's an owner to do?

Economic theory says we should buy appreciating assets with our money and rent or lease depreciating assets with other peoples' money. Cars are depreciating assets, Teslas more than most so it seems the handwriting is on the wall. My wife and I have always owned our cars and we've owned many, but it may be time to change!

 

[fasteddie7]

The only problem with leasing a Tesla is that it becomes very difficult to stay under your annual miles due to wanting to drive the darn thing every chance you get.

 

[rayfound]

Fwiw - I recently purchased a 2016 X90D. your battery degradation assumptions are fairly pessimistic, most people see more like 5% drop first couple years and then very little after that. Mine follows this - I'm seeing 244ish rated miles at 100%... 95% of 257.

I also payed essentially $61,900 (6 seat config, pretty much every upgrade)... For me going to approximately $90,000 for a six seat new model just frankly was not an option. Given that it came with a new 4yr warranty... It's essentially like a new car to me and has no viable six or seven seat competitor in the market today even new.

Note that Tesla runs their used vehicles as a Dutch auction, so every day usually the prices on the vehicles go down until they sell. I watched the market for several weeks to try and figure out where the best values would be and I feel comfortable with what I paid.

 

[rayfound]

Also, fwiw, ap1 is great on the highway and how you value The newer autopilot really depends on how much faith you place in their development, and how fast you expect more capable self-driving to happen. Ap1 as it is makes long highway trips way less taxing.

 

[SaniDel]

The only problem with leasing a Tesla is that it becomes very difficult to stay under your annual miles due to wanting to drive the darn thing every chance you get.

Good point, fasteddie7! Our annual mileage for our only vehicle is under seven thousand miles, which should be a good match for leasing, but I suspect we will have trouble keeping it that low with a Tesla!

 

[clyjr]

15% loss is way overestimating. Mine has 34k miles and full charge us 251 miles. Also 80k is really high. I bought mine in january with about 30k miles for around 75k. AP 2.0 with FSD already paid. 70k is more realistic than 80 but probably high, 65k is probably doable...

 

[OrbiterTI4]

your battery degradation assumptions are fairly pessimistic, most people see more like 5% drop first couple years and then very little after that. Mine follows this - I'm seeing 244ish rated miles at 100%... 95% of 257.

At some point in the past year or two I asked a mobile service ranger what he'd seen/heard from other owners, and his answer was similar to this - "7% first year, 1% each year after."

Anecdotal evidence - our MS85D is down 4%ish after four years.

 

[GalaxySurfer]

Bought our 2018 P100D X for 158k after all was said and done. Then the "Raven" came out and the price dropped significantly. (We could of bought a model 3 for the price difference) that being said, i have no regrets love the car! And yes Tesla will always be improving, but.. if you get a Tesla with at least AP2.5 or above you should be ok and most likely will be eligible for any "upgrades" that come out after aside from things like the new batteries or suspensions. The bottom line is there will always be a newer model, but if you have AP2.5 or above, your generally gonna be ahead of the game than in 90% of other cars. Dont forget Tesla is coming out with some BIG game changers in the next few years. Some of these are: the pickup truck which could drastically change the automarket in general, the model Y (basically a model 3 version of the X, New batteries, and the new "Plaid" drive units (3 engines instead of 2) they will also be doing a massive revamp of the S and X. Tesla has also mentioned the new Plaid cars will be significantly more expensive than its counterparts. Just some food for thought.

 

[kevinarea]

Wow, thanks everyone for the great info! Tons of stuff I never considered.
I thought the 2016s with AP1 were off my radar, but now I might reconsider. If I am looking for the next 3-5 years then the difference between AP1 and FSD might be minimal.
The battery depreciation sounds a LOT different than what I had thought and now makes it a non-factor.
We are going to make our decision by the end of the month so now I have to go back to the table with this new information and discuss it with my wife and 17 year old (hes the car guru, while I know very little).
It looks like either a $90k new Model X or $65k 2016 Model X or $40-50k new Model 3. Only problem is that I live in Wisconsin and I would have to drive to Chicago just to sit in a Model 3 since no car dealer nearby has any. The next Model 3 I see on the road I will have to follow it and see if they will let me check it out. I bet they wouldnt mind.

 

[jboy210]

... Only problem is that I live in Wisconsin and I would have to drive to Chicago just to sit in a Model 3 since no car dealer nearby has any. The next Model 3 I see on the road I will have to follow it and see if they will let me check it out. I bet they wouldnt mind.

You need to bring up the dealer issue with the Governor. You threw out Walker and his cronies for a reason.

Shorter term, see if there is a Tesla owners meetup in the Milwaukee area. Tesla owners love to show off there cars and are usually happy to give rides. This forum page, Midwest/Great Lakes, covers Wisconsin. Post a question there.

I will be in Wisconsin in a few days, but will be flying in instead of driving my X. Please ensure the warm weather holds until next weekend.

 

[Webby]

We have a 2016 MS75D and an MX100D, have driven all over the eastern seaboard in summer and winter, across the country twice. Last year I towed a 19’ camper across the country for a ski trip to all the big Rockies resorts with the X. Despite your 7k average usage, I would still recommend Buy vs Lease, and get the biggest range you can afford, and add other options only if your budget allows the extras. Battery/range is really the way to enjoy/use the car to the maximum; longer range gets you more places, more quickly, more closely approximates a gas car trip, for multiple reasons: 1) pure range, 2) bigger battery allows faster charging for more of the capacity, and 3) in the M3LR the battery chemistry allows substantially faster charging than the MX/MX. 4) winter/cold driving can have a substantial drain on roadtrip speed/range due to limited regen, cabin heating, and the extra charging needed to preheat the battery.
So short answer: get the biggest battery. If you don’t need the space of the MX and want to explore/roadtrip, get the M3LR. If you need the MX space get the newer 100D for substantially faster charging than a 2016 x90D.

 

[seantay00]

@rayfound - I'm in the exact boat as you considering a used 6 seat '16 90D. Sounds like you are pretty happy with you decision.

I've read a lot about the poor 90D batteries, early FWD issues, the shudder noise, ect... however the value still seems incredibly high for these used vehicles compared to new. When you weigh in the fact they often have 4 year warranty it mitigates most if not all of these issues in my mind.

I'm estimating by xmas the '16 90D (6 seat) will be pretty consistently found at or slightly under $60K. I'm crunching alternative numbers around VW Atlas '19 ($45k) or new Hyundai Palaside ($40k-$50k). When you look at the depreciation on the new ICE's and gas savings, the X actually makes solid financial sense. After first 2-3 years it seems like Tesla depreciation levels off very smooth and gradual, so total ownership costs drop if you sell back at some point.

I can't justify an extra $20K+ for a new model, especially just on "range". For one I'd cringe putting kids in a new X that didn't already have a little TLC "character" to it. I've yet to hear a 75D/90D X owner comment on range issues for daily/weekly use. Long trips are a fringe situation not worth $20K. Admittingly I'm not a believe of buying new vehicles in general, so I'm also biased from that perspective. Just my current thought process - subject to change daily.

 

[MarkDFW]

I think that for Teslas the issue is going to be a steeper cost reduction curve the first 2-3 years of ownership vs comparable ICE cars. The new technology and ever downward pricing will always hurt more in the first few years.

However holding the vehicle for 6-7 years decreases the pain. The value loss slows down considerably in years 3-7 since sure it’s not the newest tech but it’s still a great car that works. As you move further out in the ownership period it becomes less and less of a comparison between buy-new vs buy-used and now you are simply competing against other used Tesla’s and not a brand new option in the buyers mind.

 

[Saghost]

All about your frame of reference. Yes, new Teslas continue to advance the state of the art, and in the process make used Teslas less attractive.

But Tesla is only a tiny fraction of the new or used car market. Compare a used Tesla - even an original Pre-AP one - to any other used car, and suddenly the picture changes. The Tesla is still getting new features, and has real time traffic and Navigation that's still up to date. What other 2013 used car has that? What other used car has the instant torque, or the low running cost?

Yes, new Teslas exert price pressure on used Teslas, which may accelerate their depreciation. But used Teslas are far better buys than other used cars, so as word gets around, other used cars will presumably depreciate even harder than used Teslas do.

 

[TaipeiX]

I am in the same situation... I don't know what to go for. This is a big purchase decision and I bet a lot of model s and model x buyers feel the same.

 

[rayfound]

Counterpoint to the Tesla's advancement hurting resale:

A 2016 Model X has zero 3-row competition through at least 2020 when Rivians start to show up (at $72k+)

I'm also fundamentally pessimistic about autonomy development/regulation, so I don't place the value some others do on ap2+...