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Resale value for Tesla Model S

Discussion in 'Model S: Ordering, Production, Delivery' started by Dan5, Sep 20, 2012.

  1. Dan5

    Dan5 Member

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    So I was thinking the Model S is unique among cars in general and the pricing of the different battery levels lends itself to depreciation and resale value very well. My though is if you get an 85 pack and in a year or 2 decide to sell it, how would its value hold up vs a new 60 or 40 one?

    My premise is that you are getting more range, which is the desirable feature, but have some wear on the interior and other parts which kind of sort of evens out so maybe a 2 yr old 85 = a new 60 or 40 in price?

    More or less it's like saying my 2 yr old engine is in "better" shape than a new mid level engine which is 10 K less, but the leather and other mechanics have 2 yr wear

    Any thoughts?
     
  2. Discoducky

    Discoducky Active Member

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    I think the 85kWh will hold it's value better than 60kWh, but it will be close as superchargers will make up the difference. Since there is no competition currently and TM isn't going have cars sitting around, the demand will keep prices up for at least 4 years IMHO. I expect resale to be much better than BMW or Audi to put it more into perspective with ICE cars.

    Disclosure: I have bought a Model S already and am long on TSLA
     
  3. Langzaiguy

    Langzaiguy Member

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    I've been thinking about the resale value as well. What I've been trying to figure out is what the 85kWh's value will be after 10 years and 250,000 miles---provided it's on its second battery pack. If the battery is relatively new, and the motor is strong, the only thing I can come up with is the suspension may be unreliable and add to the depreciation. Yeah, battery tech and tech in general will be very different in ten years. Still, I think that with a relatively new battery, it could be worth at least 20-25k. Unrealistic?
     
  4. markb1

    markb1 Active Member

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    I wouldn't bet on this thing having good resale value. With all the tech in this car, it may go obsolete fast. The battery pack in particular seems at risk for this this. In a few years, batteries may have larger capacity, degrade slower, and be cheaper. This will be especially true if electric vehicles really take off, and more R&D is poured into them.
     
  5. ChadS

    ChadS Petroleum is for sissies

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    I hate predicting the future--too many factors we can't know about. But I too agree that the most likely outcome is electric cars will depreciate quickly as new tech comes online.

    But then, I think gas cars will depreciate even MORE quickly for the same reasons, so I don't let that bother me when I'm buying an electric car.
     
  6. grisnjam

    grisnjam P6316

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    But this can cut both ways, if you hold the car for the full life of the battery and then upgrade the battery you might be able to recoup substantial deprecation (and improve both range and acceleration).
     
  7. jerry33

    jerry33 S85 - VIN:P05130 - 3/2/13

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    And the tech in the car may actually help it hold value because of the updates. Or not. No way to tell without a Tardis.
     
  8. Trnsl8r

    Trnsl8r Blue 85kwh since 12/8/12

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    There is a good chance that it will hold resale value only slightly better than a new computer, but I would like to know if the prepaid service plan stays with the car?
     
  9. Robert.Boston

    Robert.Boston Model S VIN P01536

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    The major components of the car are its battery, motor/PEM, and chassis. The battery is swappable; the chassis will age like any other car; and the motor/PEM will be far more durable than the comparable ICE/tranny. As long as Telsa Motors is viable, I therefore expect depreciation to be better than a premium ICE vehicle.
     
  10. chrisn

    chrisn Member

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    No $100K luxury sedan has ever held its value beyond 5-7 years. The premium you are paying versus the base models in the $50-60K range depreciates much faster (double rate?) versus the base cars. Why? 1. People who buy $100K cars like new cars. 2. The premium was never really "worth it" on purely utilitarian grounds.

    If you want to maximize residual value, never buy the top-of-line car.
     
  11. jerry33

    jerry33 S85 - VIN:P05130 - 3/2/13

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    The thought is that half the price of the car is the battery, so that part's value depends upon how much is left at the time of sale. The other half should depreciate at the same rate (or less) as an old fashioned ~$50,000 car. This isn't quite the same a depreciation from a standard $100,000 car. So there are really two independent rates.

    Of course, the gamble is whether the used car market will see it that way.
     
  12. Robert.Boston

    Robert.Boston Model S VIN P01536

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    I think I disagree, Jerry -- the ICE/tranny has a lot of wear parts that make owning an older ICE vehicle potentially expensive. The MS doesn't have those wear parts.
     
  13. 4sevens.com

    4sevens.com Member

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    This applies to all cars (99%) - cars are not an appreciating asset - cars are meant to be used and it's in the use that present's it's value - never by leaving it sitting around. All cars depreciate but the value you get out of it while you own it depends on you - it depends on how and how much you use it. I never understood people trying to value their cars - they are aways I mean ALWAYS dropping in value - from the first day you get it... every second that you own it, it depreciates. The value to you increases as you use it. So use it up. The more you use it, the more "value" you're getting out of it. my two cents for the day
     
  14. jerry33

    jerry33 S85 - VIN:P05130 - 3/2/13

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    I agree with you, that's why I put in the "or less" :)
     
  15. doug

    doug Administrator / Head Moderator

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    I hope that's true, but I think it has yet to be conclusively proven. Push anything near its limits and it eventually fails. This also holds for power electronics. I think though with the Model S, Tesla is giving plenty of overhead.
     
  16. medved

    medved Member

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    With the Model S resale value it will be the same as with your computer resale value. What is the value of your computer you've purchased 4-6 years ago?

    Just look at the Tesla Roadster. A $100,000+ car you can buy now for $69,999.
     
  17. richkae

    richkae VIN587

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    This is wrong. You can not compare computers and cars this way. A 4-6 year old car can drive on every road just like a new car. The operating costs are different and minor usability things are different. A 4-6 year old computer can not run a lot of new software, or does not run it nearly as well.

    - - - Updated - - -

    I think a huge unknown factor is gasoline prices.
    If gasoline continues on the trend of the last 10 years - 8 years from now gasoline will be between $7 and $10 per gallon in the US. There is no politics in that, just a mathematical projection.

    How much value does an 8 year old 25mpg car have - when it costs you $2800 to $4000 to drive 10000 miles?
    Now compare that to an 8 year old EV that costs $300 to $500 to drive 10000 miles?
    I think the EV will have significant value and the ICE will be scrapped - long before it is 8 years old.
     
  18. daniel

    daniel Active Member

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    I agree with the above.

    However, the cost of replacing the battery is unknown. Batteries could become much cheaper and better, or they might improve only a little.

    As has been mentioned elsewhere, future technology is also unknown. There could be technology so advanced that today's cars are seen as significantly inferior. Or the advances could be minor conveniences.

    For these reasons, I think future trade-in value for the Model S is a complete unknown. Early adopters are taking a risk and trade-in value is one of the risks. Of course, if you plan on driving the car (any car) until it wears out, then trade-in is not a concern

    This is true as long as you are getting "useful" use out of it. As long as you are using it for necessary transportation, or having fun with it, or doing something productive with it, you are getting value out of it. If you drive it just because you want to put more miles on it, you are not getting value.

    Not entirely related, but somewhat: In the early days of the Prius, people discovered that the first ten minutes or so of driving were inefficient, until the car got warmed up; and people liked to brag about how high their mpg was. So some people took longer routes to work, or just interpolated some extra driving, in order to improve the mpg. But in doing so, they burned more gas to no purpose other than bragging rights. On my short commute in a North Dakota January I got abut the lowest mpg of anybody then reporting on Prius Chat. But I also burned less gas than anyone else.

    I agree that you should make the maximum use of your Model S (or in my case, my Roadster). But only to the extent that you're getting something out of it, whether it be actually useful or just fun.

    Not a fair point: Every car depreciates significantly immediately upon delivery to the buyer, unless there is a severe shortage and high demand.
     
  19. jerry33

    jerry33 S85 - VIN:P05130 - 3/2/13

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    The interesting part here is that my co-workers who live near me travel the so-called short/quick route and take just as long or about five minutes longer to arrive then I do. Yet I get much higher mpg than they do. I do not believe that I'm burning more gas then they are or that I would burn less gas if I took the "short" route (which might be as much as 1/2 mile out of 25 miles shorter). (I don't doubt that there are some people who drive a much longer route to get better mpg, but it's not a given).
     
  20. cinergi

    cinergi Active Member

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    Except the battery and the improving battery tech. In 7 years that 265 mile Model S may be a 200 mile Model S and new cars on the market get 500 miles and cost less. Strictly speaking, if the buyer is OK with that, then yeah there's less to break / worry about. But the value of the car has diminished.

    Personally I don't plan on keeping the Model S that long -- depending on what's on the market in ~3-4 years (hopefully another compelling Tesla). Part of that is because I get the new car itch every 30-36 months and part of it is for the reasons I stated above.
     

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