Revisting: Model 3 impact on Model S resale prices

[ℬête Noire]

I've done a search and don't see a recent thread directly on this topic. My apologies, and a link please, if there's something newer I missed.

Here's a poll and predictions from about 7 months back. POLL: What happens to Model S resale prices with Model 3 release?

So, we are now well into the prior owners pre-order queue. At least for those willing to buy the first production build. Has there been any decreeable impact yet on used Model S prices?


P.S. I'm a non-owner with an early Apr 1 reservation on a Model 3. I'm good to go with a LR 3, or a LRD 3 if that is what it'd take to get a full $7500 tax credit. However because of my intention to put on a good number of road tour miles I'm open to the potential for a used Model S w/free SC. Thus my interest here.

 

[PhaseWhite]

I don't think we'll see a noticeable decline for at least another year (or ever) and here's why:

1. Model S and X are in short supply. Tesla sold all their inventory in Q4 2017. And is now showing long delays for new production. They also mentioned on the Q4 conference call that in 2018 Model S/X will be production constrained around 100k due to battery supply constraints with Panasonic.

2. Model 3 production is much lower than forecast because of the battery pack construction at the Gigafactory. I don't think we will see enough production in 2018 to relieve pressure and if anything this will be positive for Model S/X as people with Model 3 reservations who can afford S/X or can stretch finances will do so in order to get one this year (before the tax credits run out)

 

[Qbenjamin]

I don't really see the 3 impacting the S until there are quite a few thousand more on the road. Many owners (to include myself), are getting rid of the S' and opting for the 3 instead. Although it isn't quite comparing apples to apples with the two vehicles, the LR 3 just seems too enticing with the 300 miles of range for nearly half the cost (comparing S 100D to 3 LR).

 

[Jashev]

I think the PhaseWhite is spot on. My personal observation is that the market for used S's is firming up significantly. I sold my 2013 last month and I would say in all my years of selling cars it was probably the easiest sale. I posted it here on the forum, on the facebook tesla for sale group and started an ebay auction. I ended up killing the auction because I had so much outside activity and the car was sold sight unseen to a buyer in Florida who had it shipped down.

 

[mrtian97]

I agree, the base Model 3 still maybe 1 yr away, with the long range M3 price closer to MS75, I would rather have MS (which what I did when I bought mine in June). I think MS still show the elegance vs M3 while it’s what everyone talks about but still considered the cheaper Tesla (just like MB C class vs the S or even the E). But again, this is just my personal opinion

 

[Ketchups]

2. Model 3 production is much lower than forecast because of the battery pack construction at the Gigafactory. I don't think we will see enough production in 2018 to relieve pressure and if anything this will be positive for Model S/X as people with Model 3 reservations who can afford S/X or can stretch finances will do so in order to get one this year (before the tax credits run out)

How does a used vehicle purchase qualify for the tax credit?

 

[JayyyDeee]

I don't really see the 3 impacting the S until there are quite a few thousand more on the road. Many owners (to include myself), are getting rid of the S' and opting for the 3 instead. Although it isn't quite comparing apples to apples with the two vehicles, the LR 3 just seems too enticing with the 300 miles of range for nearly half the cost (comparing S 100D to 3 LR).

You just proved why it going to impact the S. You and everyone knows the 3 is a better deal and there will be a ton of used Model S for sale

 

[JoRey]

I think you guys are missing a point. Namely the stark absence of high mileage Model S. With the unlimited supercharging and 8 year drivetrain warranty people who drive for a living are unlikely to trade their car's until the warranty runs out. Then we must also consider that people are willing to pay obscene prices for used Tesla's and the prices of some car's dont seem to match with the prices of CPO's that Tesla sold of a couple of months back. The price should fall when in about a year when the Model III becomes more common place. It will plummet when the 8 year warranty runs out.

 

[IdaX]

You just proved why it going to impact the S. You and everyone knows the 3 is a better deal and there will be a ton of used Model S for sale

I thought this too, but now I'm not so sure. It could be that as Tesla gains higher brand awareness due to the profusion of 3's demand will increase to match the new supply.

 

[Qbenjamin]

You just proved why it going to impact the S. You and everyone knows the 3 is a better deal and there will be a ton of used Model S for sale

The number isn't that high of owners who are getting rid of their S in favor of the three. I said "tens of thousands," versus there are probably only a couple thousand owners making the switch from the S to the 3.

 

[bob_p]

We've had our S P85 for 5 years (over 90K miles) - and plan to sell it or trade it in soon for a new Model 3.

Based on Kelly Blue Book, the projected trade-in and re-sale prices are in line with what I would have expected, depreciating around 2% per month since delivery, similar to the depreciation rate I've had with ICEs.

While a new Model 3 might eat into the market for used Model S's, that market will also likely be expanding as more people get used to the idea of driving a long range EV, coupled with the expanding supercharger and destination charging network.

Unless something bad happens with Tesla itself, I'm not concerned about the future resale value of our S 100D.

 

[PhaseWhite]

How does a used vehicle purchase qualify for the tax credit?

To expand on that thought, it's more about overall Model S demand. If Tesla's production for Model S can't meet the demand and buyers face longer than normal wait times for delivery, then this will put more upside pressure on used prices.

 

[Ken7]

And of course many have given up waiting for their Model 3 and purchased a Model S instead. So there's that.

 

[JPUConn]

The 3 has brought more near term demand to the used S market. With the reduced inventory prices have gone up ~20% from 3 months ago.

 

[kingjamez]

The 3 has brought more near term demand to the used S market. With the reduced inventory prices have gone up ~20% from 3 months ago.

This. People like me who are in for a longer than originally expected wait are now searching for used Model S's.
I'm buying an S tomorrow night and the seller said that he has been slammed with interest from the moment he posted it.
-Jim

 

[dknisely]

I've seen M3s in Fremont, and the interior is definitely superior to the MS and I'm sure I would prefer the smaller footpring; however, overall, I still prefer the MS with the larger storage capacity and even the old-fashioned binnacle display still has advantages. However, yesterday, we saw the M3 in the Bellevue Square Tesla Store showroom (at a distance), and my wife said it looks just like a MS except better (she actually prefers the exterior, which I definitely don't).

We didn't get close as there was a long serpentine line out into the mall to see it (as expected).

Our M3 order is now eligible, and I'm not sure she won't push for it once the AWD becomes available.

I may be simple minded, but I love the MS automatic trunk open/close feature so much. The M3 seems like a Toyota Civic (non-hatchback version) in comparison.

But, yeah, M3 will kill MS value, and they will have to dramatically step up the MS/MX game. So much more range and interior styling for the money...

 

[⚡️ELECTROMAN⚡️]

I've seen M3s in Fremont, and the interior is definitely superior to the MS and I'm sure I would prefer the smaller footpring; however, overall, I still prefer the MS with the larger storage capacity and even the old-fashioned binnacle display still has advantages. However, yesterday, we saw the M3 in the Bellevue Square Tesla Store showroom (at a distance), and my wife said it looks just like a MS except better (she actually prefers the exterior, which I definitely don't).

We didn't get close as there was a long serpentine line out into the mall to see it (as expected).

Our M3 order is now eligible, and I'm not sure she won't push for it once the AWD becomes available.

I may be simple minded, but I love the MS automatic trunk open/close feature so much. The M3 seems like a Toyota Civic (non-hatchback version) in comparison.

But, yeah, M3 will kill MS value, and they will have to dramatically step up the MS/MX game. So much more range and interior styling for the money...

How is the interior definitely superior? Is it just because the door pockets and coat hangers? I prefer the look of my interior, but I haven't sat in a 3 yet.

I prefer the MS exterior too. My 15 year old daughter and I went down to the service center last week and we got to see a bunch of 3s in every color. It's a very nice looking car, but it just doesn't have the wow factor of the S. It's cute. The front reminded my daughter of the New VW Bug. Interesting because Franz helped design the Bug. I think the front looks like a Porsche, for obvious reasons. I thought I was going to like the 3's exterior more than the MS, but so far I don't. Also, seeing the two cars side by side I thought I would definitely prefer to be in the S if I were in a serious car accident. Safety was my #2 reason for buying a Model S.

 

[dss33]

How does a used vehicle purchase qualify for the tax credit?

It doesn't, because the incentive can only be applied to each vehicle once (when first purchased from the manufacturer/dealer).

 

[Asymmetry]

I think the prices will fall hard on the lower battery S, S60, S70/5 compared the 80kw model battery on M3.

There isnt that much value add on the non performance S compared to M3. Also people are still wary of older model production issues and question mark on battery replacement. People are still somewhat think a M3 is a upgrade to MS.

New M3 or a used MS, I think people will opt for the new car, thus the price on the S will depreciate faster.

 

[Ketchups]

It doesn't, because the incentive can only be applied to each vehicle once (when first purchased from the manufacturer/dealer).

My thoughts exactly. Unlike State sales tax (CA), where the vehicle is taxed each time it is sold (for the rest of it's life), the Federal tax credit is only good for New qualifying vehicle purchases. However, it is possible for a state tax incentive that includes used vehicles but I am not aware of any.

phasewhite's original comment was inferring that m3 reservers (made up word) would stretch their finances in order to take advantage of tax incentives, by buying a mS/X before the incentive expires.

as people with Model 3 reservations who can afford S/X or can stretch finances will do so in order to get one this year (before the tax credits run out)

However he added this later on..

To expand on that thought, it's more about overall Model S demand. If Tesla's production for Model S can't meet the demand and buyers face longer than normal wait times for delivery, then this will put more upside pressure on used prices.

I do enjoy seeing all this speculation on the used mS sales market. Waiting for some concrete data tho.