Model 3 depreciation speculation

[KarenRei]

Hiya - new here. I've finally become rather passionate about a specific EV (rather than just EVs in general) for the first time since Aptera went under: the Model 3. I'm not as infatuated with it as I was with Aptera, but enough so to want one. (specifically: it was the drag coefficient that did it for me. 0,21 on a rather normal looking passenger sedan? Tesla's engineers are bloody amazing)

However, I'm also a penny pincher who doesn't buy new cars; I'm not fond of losing lots of money just by driving a car off of the lot, and then suffering a steep depreciation rate over the first few years. As someone who lives in Iceland, I also have to either buy at greatly inflated local prices, or import the vehicle for ~$5k shipping + 24% of the "purchase+shipping" price**. Thus I'm looking at the used market - but because I really want one, at a minimal length of time in the future.

What do you all think the depreciation is going to be like on the Model 3? The S has done quite well at retaining value so far. I'm thinking that ~4 years from now it might be possible to find some comparably high-mileage Model 3s (aka, out of warranty) for $15-$20k - does that sound like a reasonable expectation?

** It could be worse; that's the import duties on zero-emission cars. Duties are relative to emissions, the highest emissions category has an additional 65% tax on top of that!

 

[Runt8]

I would guess that you'll see M3 depreciate slightly less than comparable ICE and EV vehicles due only to the fact there is so much pent up demand. As for $15-$20k in ~4 years - with so many unknown variables I don't even want to try to come up with a reasonable guess.

Also, we technically don't know the drag coefficient - 0.21 was Elon's stated goal but we have no idea if that was attained.

 

[KarenRei]

The depreciation on the S is supposedly only ~50% value in ~100k miles. On the other hand, other EVs have had terrible depreciation rates - Leaf and i3 hit 50% at around 40k miles, and at 100k are down to about 20% of their value. Depreciation on the X has supposedly been worse than the S. All EVs will of course have some instant depreciation due to the tax credit (aka, you only get it on new cars, driving down the value of used)

I guess it in part depends on what Tesla comes out with next and at what price point. I'd wager a lot of the Leaf / i3 depreciation has been due to the contrast with announcements related to the Bolt and Model 3.

 

[Runt8]

The tax credit is tricky to take into account when it comes to depreciation. How do you come up with a number when everyone potentially pays a different amount? At least in the US, one benefit of the expiring tax credit is an increase in value for people who were able to take advantage of the credit.

 

[KarenRei]

Hmm, forgot about the expiration - that's unfortunate.

 

[keydiver]

I don't think the Model 3 could ever depreciate as much as my Leaf. Not only did my 2012SL lose a lot because it is a rather niche, and unattractive car to most people, but the $7500 Federal credit plus some great state rebates instantly caused a huge drop in resale value, which to some extent could affect the Model 3 price too. But then, Nissan introduced a stripped-down base model for $10,000 less than what I paid for the SL, which seems to have been the nail in the coffin for Leaf resale values. At least that part should never happen to a Model 3. This leaves me in quite a bad situation, as I probably should have just taken the $10,000 tradein Tesla offered me in 2015 toward my Model S. I still have my 2006 Prius, my MINT 2012 Leaf with a fresh "lizard" battery is only now worth $5000, and I have a new Model 3 reserved, and I really don't want to be a 4-car family.
The other thing that I might mention that killed Leaf values was the thousands of them coming off lease 3 years later. Hopefully most people will buy the Model 3, not lease.

 

[LargeHamCollider]

So long as Tesla is unable to meet M3 demand, M3 resale value will be very good. I suspect this will be the case til 2019ish.

 

[EXOTIC1]

As posted in another thread about this:

Get an early car/live on West coast/MS owner
you can drive it for 12 months and return 90% of your investment


demand first 12-18 months will outweigh deliveries..... book it!

 

[timk225]

If I have my Model 3 for 6 to 12 months and decide I don't like it, I will put it up for sale asking MORE than what I paid for it new. Supply and demand!

 

[KarenRei]

For the record, much has changed since this post was written. I found out that the calculator on the customs site was wrong (at least as of this year VSK is waived on EV purchases up to 6m ISK - hopefully next year too), I redid my calculations in much more detail, decided to reserve a new one, did so on Friday (but couldn't pay then because it wouldn't take my credit card), did a bank transfer today, and it should go through "within two business days" I'd prefer sooner, but hey, that's at least before the reveal, and presumably a new wave of orders because of it.

Can't wait to get a chance to configure it! I'm already thinking about the sort of trips to do in it. Maybe after I have enough data on its real-world range in various conditions I might try some "endurance" trips, like to see whether I could drive the entire Ring Road with only one recharge halfway (it'd be tough, but crunching some numbers suggests that it might be doable if driven very slowly in good weather!).

 

[flamingoezz]

i doubt you will get more than you paid, but you may get close to what you paid. 6 months after you get your car there will be 150K of them on the streets. it'll still be desirable as an electric car, but won't be as desirable as it was when it was THE electric car that nobody else had seen in person.

If I have my Model 3 for 6 to 12 months and decide I don't like it, I will put it up for sale asking MORE than what I paid for it new. Supply and demand!

 

[zenmaster]

The other thing that I might mention that killed Leaf values was the thousands of them coming off lease 3 years later. Hopefully most people will buy the Model 3, not lease.

Tesla can control residual to discourage or encourage leasing. If residual is high, there will be a lot of leasing going on. Just makes sense for people that want to stay in a new car. The industry is waking up and will be forcing advancements. A lot of new features and improvements will be made over a 3 year period.

 

[KarenRei]

The latter makes it hard for any EV to retain value in this rapidly changing environment. It's the same reason why cell phones and computers depreciate so quickly - the constant stream of "radically newer and better" coming out. The fact that Tesla has done so well in retaining value is a testament to their desirability. When I show my reservation to coworkers the reaction is like I'd won the lottery. "You're getting a Tesla???" Something like a iMiEV just doesn't carry that impact.

Tesla alone is innovating so quickly that they would be depreciating their own products, if they didn't also get such huge waiting lists on each successive product launch.

 

[zenmaster]

The latter makes it hard for any EV to retain value in this rapidly changing environment.

that's why a lot of people could find leasing attractive, plus lower risk from new product. All depends on Tesla's decision for residual value.