Model S and X "Continue to Hold Values Better than Rivals" -- Autolist

[EinSV]

autolist.com updated its analysis of used car depreciation and again found Model S and X best in class.

After 50,000 miles Model S and X depreciated 27% and 23% compared to an average of 36% and 33% for their classes.

"These results show that demand for used Tesla Model S and Model X vehicles hasn’t been affected by the arrival of the cheaper, smaller Model 3."

Seems like every year we hear predictions that Tesla's depreciation will start increasing and those predictions (so far) have always been wrong.

Study: Tesla Model X and Model S continue to hold values better than rivals

 

[PhilDavid]

You need to be pretty high on Teslaquilla to believe that 27-23% depreciation figure after 50,000 miles/~3 years.

If you have been paying attention to Tesla used car values, youd'd know that 3 year depreciation is around 50-55%, just like any other premium car in this price segment.

Basically buy a Tesla because it is the best car available to buy. Not for low depreciation.

 

[EinSV]

Motley Fool had a nice summary of the large amount of data analyzed by autolist:

After poring over data from 35,442 Model S listings and 4,242 Model X listings between Jan. 1, 2012 to Nov. 5, 2018, as well as a total of 1.209 million listings from the large luxury sedan segment and 1.683 million listings from the large luxury SUV segment, Autolist came away with a clear conclusion: Both the Model S and the Model X have higher resale value after 50,000 miles than their comparably priced rivals. Further, this wasn't just true for the two vehicles' resale value at the 50,000-mile mark, but at every point on the two vehicles' depreciation curve, Autolist found.​

Tesla Model S and X Vehicles Boast Superior Resale Value -- The Motley Fool

Sounds like they did a pretty exhaustive data crunching analysis - no reason I can see to dismiss it. Anecdotal reports of depreciation are basically useless -- especially compared to an objective, data-driven analysis like this.

It's also noteworthy that autolist found Model S's depreciation was similar to (a bit better than) it found in a study two-years ago (27% v. 28% in 2016). This suggests the result is not a fluke and that S and X do have less depreciation than other cars in their class.

I think the same is very likely to be true for Model 3 for the same reason -- high demand.

 

[PhilDavid]

Motley Fool had a nice summary of autolist's methodology:

After poring over data from 35,442 Model S listings and 4,242 Model X listings between Jan. 1, 2012 to Nov. 5, 2018, as well as a total of 1.209 million listings from the large luxury sedan segment and 1.683 million listings from the large luxury SUV segment, Autolist came away with a clear conclusion: Both the Model S and the Model X have higher resale value after 50,000 miles than their comparably priced rivals. Further, this wasn't just true for the two vehicles' resale value at the 50,000-mile mark, but at every point on the two vehicles' depreciation curve, Autolist found.​

Tesla Model S and X Vehicles Boast Superior Resale Value -- The Motley Fool

Sounds like they did a pretty exhaustive data crunching analysis - no reason I can see to dismiss it. Anecdotal reports of depreciation are basically useless -- especially compared to an objective, data-driven analysis like this.

Yup, it is called garbage in, garbage out.

A "study" uses asking prices that are wildly all over the place to base a hypothesis and the results will be wildly inaccurate as well.

Anecdotal? Look up the entire CPO inventory of 119 P85D vehicles. That whole inventory shows a depreciation of about 50% in 3 years.

Why did they not want to use confirmed sold prices for this "study" of theirs?

If you want to see what actual residual values are like, look at CPO pricing, auction results, and sold listings on eBay. Obviously if Tesla feels they can sell 3 year old cars with only a 27% reduction in value they will not be trying to sell about 3 year old cars with about a 50% reduction in value. Even at those prices the cars sit for weeks before selling,

So yeah, there are "studies" based on dubious data and then there is reality.

 

[EinSV]

Yup, it is called garbage in, garbage out.

A "study" uses asking prices that are wildly all over the place to base a hypothesis and the results will be wildly inaccurate as well. <snip>

Autolist's data is not "all over the place" -- the chart below shows a very consistent pattern not just for Model S but for the ICE vehicles studied: "Autolist’s data showed that at no point in the depreciation curve of any of these vehicles did a gas-powered rival have a stronger resale value than the Tesla Model S." This is clearly not some random effect as your comment suggests.

Also -- contrary to your suggestion that all cars in the class have a 3 year depreciation of 50-55%, autolist's data shows significant differences between the ICE models, ranging from 33 to 47 percent. They report wide variability in depreciation among ICE models (which is typical):

"Based on vehicle listings from January 1, 2012, through November 5, 2018, on Autolist.com, the value of a Model S with 50,000 miles on it had declined on average 27 percent from its original list price. A comparable Mercedes S Class -- the next closest competitor in the large luxury sedan segment -- had lost an average of 33 percent of its original list price after accumulating 50,000 miles.

The competitor with the greatest depreciation was Jaguar’s XJ, which lost an average of 45 percent of its listing value after 50,000 miles. Also included in the Model S’ segment are the BMW 7 Series, Audi A8, Porsche Panamera and Lexus LS.
​

The fact that the study is made based on autolist's listings doesn't invalidate the comparison between Model S/X and their competitors. There is no reason to believe that Tesla owners artificially inflate used car list prices compared to ICE competitors, much less do it consistently, year after year. In fact that seems totally implausible.

It is a fair critique that the list price may not reflect the final price sold, but that should affect all brands equally so would not change the conclusion that Model S/X consistently depreciate significantly less than their competitors. This lowers the overall cost of ownership which is good news.

It is the best, most systematic study I've seen on comparative depreciation between Model S/X and competitors. If you can point to a better one I'm all ears.

 

[PhilDavid]

The finding of this "study" is invalidated by reality.

Based on actual CPO values, we know the finding of this study is BS.

And based on the fact that they used asking prices to figure out depreciation, we know why the result is BS.

 

[EinSV]

The finding of this "study" is invalidated by reality.

Based on actual CPO values, we know the finding of this study is BS.

And based on the fact that they used asking prices to figure out depreciation, we know why the result is BS.

As I said in my previous post, using list/asking prices does not invalidate autolist's main conclusion -- that Model S and X depreciate significantly less than competitors -- because there is zero reason to believe Tesla owners artificially inflate asking prices compared to competitors. It does raise a question as to whether ALL of autolist's depreciation numbers (for Tesla and ICE) may be too low, but that's a different issue.

The fact that the study is made based on autolist's listings doesn't invalidate the comparison between Model S/X and their competitors. There is no reason to believe that Tesla owners artificially inflate used car list prices compared to ICE competitors, much less do it consistently, year after year. In fact that seems totally implausible.

It is a fair critique that the list price may not reflect the final price sold, but that should affect all brands equally so would not change the conclusion that Model S/X consistently depreciate significantly less than their competitors. This lowers the overall cost of ownership which is good news.