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Tesla S - Depreciation and projected resale value after 2 years?

Discussion in 'Australia & New Zealand' started by ElectricAutos, Dec 9, 2014.

  1. ElectricAutos

    ElectricAutos Member

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    Has anyone estimated the depreciation rate for a Tesla S and it's potential resale value after 2 years.

    A 2012 Holden Volt with 30,000 km on the clock is worth about $35,000 to $40,000. It cost $70,000 on the road.

    A 2012 Mitsubishi i-Miev with $30,000 km on the clock is worth around $25,000. It cost $60,000 on the road.

    So the question is will the Tesla S lose half it's value in 2 years?
     
  2. green1

    green1 Active Member

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    Elon was quoted at the time of the resale guarantee to say that he expected depreciation similar to a Mercedes S class. For a long time depreciation was less, but it's increased with the roll out of AWD and autopilot on new cars.

    Continued demand constraint and long wait times for new vehicles drive used prices up
    New innovations (like AWD, or autopilot) and shorter wait times for new vehicles drive used prices down

    Which of those 2 items will be more prevalent 2 years from now is very hard to guess, so it could go either way. This also assumes no real "Tesla killer" emerges from a competitor, but honestly, in the 2 year time frame from now, I don't think there's any real worry of that.
     
  3. Dborn

    Dborn Confirmed

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    Frankly, after my very recent experience selling two used cars, there is no such thing as a car retaining its value. Drive out of the showroom and around the block and i reckon you will drop 10 grand. So, 50% drop after two years sounds about right.
     
  4. Tasdevil

    Tasdevil Member

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    So I should try and pick up a used modelS instead of a new model 3. The model3 is probably 2018-2019 for us anyway...
     
  5. Gabz

    Gabz Member

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    which is fine with me signature red is my colour. give yourself 2-3 years of that car then buy yourself a nice shinny P85D and i'll take that boring old S85 off your hands.
     
  6. JFK

    JFK Member

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    I paid $37K for my Prius exactly two years ago and the best offer I have got from a private buyer is $22K. Not quite 50% but close.

    It' certainly not a good investment!
     
  7. green1

    green1 Active Member

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    Cars never have been. And for all it's advances, the Model S is still a car, and as long as Tesla keeps innovating, the older cars will keep depreciating, so for that reason, I hope the cars keep depreciating because otherwise it means Tesla has stopped innovating!
     
  8. PokerBroker

    PokerBroker Member

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    Currently, 2-year old S60 with 15,000 is fetching roughly $52,000, a S85 with 25,000 roughly $62,000 and P85 with 25,000 roughly $74,000 on the private party resale market. These numbers represent roughly a 40% loss of value in two years but don't forget that in the US many buyers are receiving a $7500 or more rebate.
     
  9. Keiron

    Keiron Member

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    Reasonable guesstamatics

    It should be interesting to evaluate the depreciation curve on Model S in Australia.
    To some degree we the early adopters have an amount of leverage on how much we are prepared to accept relative to new replacement values.
    Until now the core reason for depreciation has been the end life cost curve for existing liquid propelled transport.
    Given the total expected lifespan has now elongated to a linear running cost with 8 year guarantee on the cell Plus unlimited kms warranty the prime case for 50% in 2 years and a further 50% in the next 3 may be argue able in a BMW or merc because there huge cost of maintaince when high kms have been covered.
    i would expect the reality ought to mimic the Prius effect where retention value is good up until the batteries need changing then the resale value plummets brutally.
    I would think that a good stratergy may well be to spend the 12k US fit a brand new cell THEN offer for sale with 8 years on the cell and unlimited on the car .....
    In my case it highly likely we will acquire more Telsa product rather than selling as I firmly believe that Tesla deserves our continuing support for simply existing against all the odds.
    I have respect for mavericks who won't say no!
    Regards
    Keiron
     
  10. meloccom

    meloccom Moderator Aus/NZ

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    It has been a big financial stretch for me to buy this Tesla so I have no intention to sell it before the 8 year unlimited battery warranty runs out.
    By then I'll probably trade it on a Roadster II coupe. :wink:
     
  11. Mark E

    Mark E Member

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    $100,000 cars tend to drop in value faster than $50,000 cars simply due to the market dynamics of who buys them and with supply and demand. A 2 or 3 month waiting list is a good thing for resale value, as is cars built to order as opposed to inventory. Unfortunately with the Tesla you also have a continual cycle of upgrades coming along at the same price point.

    We also have the possibility that other incentives like reducing the LCT or stamp duty can push the price down hurting existing buyers - but with our government and budget I'm not holding my breath for that one.

    If the price of fuel stays high and incentives like, for example, transit lane access, reduced registration etc happen then the price will also be supported compared to a similar price ICE. The biggest determinant will be the perception around battery degradation. With the Model S I'd expect that it will hold up better than the smaller battery alternatives since there is simply no need to fully charge or fully discharge for 98% of the time. A 180km day driving around is easy when you have a 400km range, not so easy when that's your maximum to start with, so the battery will be less stressed for the same mileage.

    I'd also seriously consider other options like colour combinations, and config to suit resale if that's important to you - e.g. the extended leather interior is nice to have, but may not actually improve resale value much if its not a drawcard. Compare that to the impact of not selecting the tech pack and you'll get my idea. Red and black cars don't seem to hold up as well as white or silver - but this will also vary depending on fashion.

    Sports cars generally lose value faster than others, and really high end (Ferrari/Lambo) lose dramatically with use.

    The market for a MS is new, since its a luxury type family car and is evolving rapidly. If there is a 100kWh version in a years time that costs less, then the impact will be greater than if capacities and options stay similar.

    At the end of the day, all new cars drop dramatically over the first 2-3 years, and most leases are calculated with a 50% max residual after 3-4 years. After all, would you buy second hand to save 5% from new? 10%? 20%?
     
  12. Higgy

    Higgy Member

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    It will be interesting toi see what I get for the RX8 - Whilst 8 years old it is in perfect condition, leather , sunroof, etc, recently fully detailed and only 49700 on the clock....the market seems to be $15-$20k. New price was over $60k in 2005 dollars.
     
  13. Ascientist

    Ascientist Member

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    Mitsubishi I-Miev was/is $53k new and two year old is $17k which represents a 63% depreciation.

    Unfortunately not a lot of Australians are smart enough to appreciate EVs regardless of how they look. The I-Miev is not a bad car.

    Tesla is a much better value proposition than a new I-miev leaf or i3.

    The real test is how many of you want to sell your S. My prediction is not many :) so this should keep your resale high.
     
  14. green1

    green1 Active Member

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    Except this has proven false already. All it takes is Tesla releasing a newer better model and everyone seems to want to upgrade.

    That's what drives depreciation, the fact that new cars are better, not because the old cars have gotten worse over time, but that the new ones keep improving
     
  15. ArtInCT

    ArtInCT Always Learning

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    #15 ArtInCT, Dec 11, 2014
    Last edited: Dec 11, 2014
    It is very important for the secondary market to form and have demand for the Model S.
    There are many folks who desire an S, but due to various circumstances, their finances
    and perhaps, risk aversion, have put them in the keen position of forming this market.

    What is lacking, however, is a clear understanding for what options, colors and performance
    packages and prepaid service warrantees this market will value above others...

    Example, green and blue and brown cars (all cars not just Tesla S), in the secondary market have more days on
    in the market vs other more popular colors. So will color be a factor?

    Will Tesla be perceived as a "great" company to do business with and do the right
    thing for secondary owners?

    Will the 40 and 60 Kw cars be held in as high regard vs the S85, P85 and P85+ ?

    Time will tell. And the answer to those and other key buying factors will
    have a lot to do with your depreciation question.
     
  16. Zextraterrestrial

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    not quite. 2012 P85 cost $100k, fully loaded excluding 2nd charger and rear seats.

    ~ 25%-30% loss, which is pretty amazing for a 100k car

    - - - Updated - - -

    and the old ones have gotten better too so how does this change things? my 2012 has many better parts than what was available in 2012. + the rear P85 is quiet and actually pretty 'close' to the P85D in speed aspects especially over 60mph
     
  17. green1

    green1 Active Member

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    Does your 2012 have the auto-pilot sensors? the dual motor all wheel drive?
    Your 2012 has improved in tiny amounts, the new vehicle has made it obsolete.

    If you don't believe that people are selling their older model S to buy newer ones just read this forum for many many examples of people upgrading to the P85D, also note the massive increase in numbers of used Model S available since that announcement.

    You personally might not upgrade, but many people do. and this same thing causes depreciation of your old car, who wants to pay full price for it when it doesn't have many features available on newer cars.
     
  18. Zextraterrestrial

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    I agree and disagree to some extent too.
    People definitely are selling their older S' to buy the latest and greatest. Are many of these the same people that buy new cars every couple of years or every year? lots of these have gone from a P to a + and now to a D. Many also have Mclarens and other exotic cars. I have never even been in a $100k car besides my S!
    If I was drowning in cash I would get a P85D too, no doubt!

    But as of now there is no other rear wheel only, 4s electric car on the market (speaking of the P specifically)
    the option is a weaker/controlled awd 5s or much more expensive awd 3s car. and Tech only comes w/ the autopilot stuff now.
    Autopilot and the new 'nannies' are not features I (and I'm sure quite a few others) desire

    no one will want to pay full price for it but the ~$70k+ prices for a 2012, 30kmi car are no too bad.
    unless someone else does a powerful M/R sedan(and how many even exist?) I think the p85 will still be desirable.
     
  19. green1

    green1 Active Member

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    I didn't say it won't be desirable, only that it will depreciate.

    70k for what was a 130k car (fully loaded) is still a significant drop. and we're seeing some cars in the 60s (USD)

    Basically the resale market has so far proven that these cars depreciate like other high end cars. The only way that will stop is if Tesla stops innovating. If a 2018 MS is identical to a 2015 MS, then the price difference between them will be less, but if that 2018 has loads of new features not available on the 2015, then depreciation will continue.
     
  20. ggr

    ggr Roadster R80 537, SigS P85 29

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    Not only do the new ones keep improving, so do the old ones! New features keep appearing overnight.

    I'm glad we got a one-of-a-kind... it prevented me from pressing the buy button on the night.
     

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