[UK] used value of their Tesla cars plummeting?

[Irata]

No, I am not worried that it will go down in value.
But I am worried that it will go up in value, which would mean that there aren't enough EVs made and we keep lining the pockets of oil dictators.

I like the bigger picture view here.

It's an interesting dilemma. Selfishly I'd like my car to not depreciate, so I can plan ahead to replace it while someone not in my situation buys it off me at cost. Makes me feel good and smug.

But... My selfishness doesn't help the majority. The majority don't buy new cars, so it's a cheaper second hand market that will really drive EV take-up.

So I also won't worry whatever happens.

 

[Olle]

I like the bigger picture view here.

It's an interesting dilemma. Selfishly I'd like my car to not depreciate, so I can plan ahead to replace it while someone not in my situation buys it off me at cost. Makes me feel good and smug.

But... My selfishness doesn't help the majority. The majority don't buy new cars, so it's a cheaper second hand market that will really drive EV take-up.

So I also won't worry whatever happens.

Exactly. You either have a valuable asset or the EV supply accelerates to solve a slew of world problems. You win either way.
The ones who are guaranteed to lose big on all fronts are the ones buying a new ICE or hybrid.

 

[mnobleuk]

In 3 years time far more than 17% of new cars will be EV. That will be the major impact to used car pricing, as we've seen currently, it's new car supply that drives used car prices more than anything else.

We're being flooded with the main stream marques releasing all sorts of EVs, from small to big. Due to all of the above, I very much see used car prices, EV or not, returning to the 50% ish 3 year depreciation.

We're being flooded with EV *models* not actual EVs on the street. The manufacturers want to remain exciting and relevant to buyers.

In the same way as they always advertise their expensive models which the majority don't buy then they advertise EVs heavily not in the expectation that you will buy their EV but that the "warm glow" it creates means you'll buy something else they make.

The issue here is that traditional manufacturers are very sketchy on how fast they are going to ramp up and whether they actually make money on EVs - it appears that most don't, at best they wipe their faces by displacing emission fines. The only EVs that can be proven to be sold at a profit are Tesla.

 

[pgkevet]

Exactly. You either have a valuable asset or the EV supply accelerates to solve a slew of world problems. You win either way.
The ones who are guaranteed to lose big on all fronts are the ones buying a new ICE or hybrid.

New car sales have EV's at about 14% but overall % on the road is 5%. It's going to be another 8 years before ice sales stop and ice cars have an average life of 12 years so buying a new ICE car now is still risk free for another 5 years. There's also a good chance that the 2030 deadline will shift with another gov U-turn due to lack of charging facilities etc.

 

[Olle]

buying a new ICE car now is still risk free for another 5 years. There's also a good chance that the 2030 deadline will shift with another gov U-turn due to lack of charging facilities etc.

It's risk free to buy a CRT TV too, because you could always sell it to a museum when you are done with it. And the government may make a U turn and force everyone to stop buying flatscreen TV by 2030 because there is a lack of wall brackets etc. CRT would take off like crazy then, values will go though the roof.

 

[EVer Hopeful]

In fairness, considering the vehicle now costs about $12,000 more than it did when I bought it, I'd say there's a lot of room for a 'plummet' before I'd get concerned

 

[qwickshot]

Why would you be worried? In the good old days, a car would depreciate to next to nothing in 10years and about 40-50% in the first 3 years. EVs haven’t seen anything like that, even before 2020.

The demand for EVs is growing and the lack of supply is causing huge problems right now.

If anything I’d be concerned that the high prices and lack of supply will make the government u turn on the 2035 deadline. That would be utterly terrible.

Will these crazy prices last? I hope not but they will be around for a good while yet as will this crazy inflation.

A 2010 Saab 9-5 in good condition is still worth over £12k. They were common as muck back in the 00’s (a bit like a model 3 now….) and they went out of business 10 years ago. Parts availability is probably better than Tesla still

 

[Irata]

New car sales have EV's at about 14% but overall % on the road is 5%. It's going to be another 8 years before ice sales stop and ice cars have an average life of 12 years so buying a new ICE car now is still risk free for another 5 years. There's also a good chance that the 2030 deadline will shift with another gov U-turn due to lack of charging facilities etc.

Sadly nothing in life is risk free.

Octopus Agile was the future not long ago, couldn't lose, people saved loads, even paying out sometimes to use electricity. Then a war broke out in Europe.

I wouldn't dare guess 6 years time, let alone 12. It's a volatile world.

But to be balanced, it applies to everything.

 

[Ricecooker]

Prices have indeed dropped for Model 3 and Model Y in China. Model Y RWD have dropped 16,912 CNY, that's around £2050, and referral programs have resumed in China. This really isn't surprising given the happenings that has been discussed here and hopefully UK prices will follow soon.

 

[Overworked]

There is a state rebate for cars below a certain price in China, and they have reduced the price to take advantage of it, as is about to happen too in the USA in my opinion when the IRA comes into force in January.

The increased production capacity in China and the similar increase in Berlin ramp-up means that they dont need to ship so many cars to Europe and can now sell them in the home market in China without any shipping costs for the cars at both ends of the production - and more are now available for sale there. It will mean that Tesla will make massively increased sales and deliveries in Q4 in both Europe and China.

I doubt that the UK prices will change as long as they can sell all they produce at this price. A price reduction will increase sales and they may not be able to fulfill those orders until Berlin is sufficiently ramped up - say late 2023 I would reckon.

 

[Jason71]

I doubt that the UK prices will change as long as they can sell all they produce at this price.

Agree but how long will that be true for? estimated delivery date for an SR MY in the UK is November/December i.e. this quarter.
They have ramped up production in China but the local market may be approaching saturation based on the price cuts. So that is more cars for export. Berlin is ramping up slowly which means less China cars for Mainland Europe. So assuming they can get ships I think they could be close to having more cars available for the UK than they can sell.
Before price though I think we will see generous trade-in pricing return and maybe some sort of incentives. If we see that then a price cut may not be far behind.

 

[Bouba]

The problem with predicting the future is that the supply is global but the demand is local...so the permutations are infinite. The UK is a special case...the pound dropping, the fuel tax high, electricity going up, right hand drive, the impending end of new ice cars. To me the the real unknown is what will happen to the existing ice cars after the new ones are banned...for a start we do not even know who is Prime Minister...but if the government lose the next GE, then it could be to a coalition of the opposition...this would leave the greens with a voice more dominant than their position....and the logic of why do we have all these old polluting cars on the road when we don’t allow new low polluting ones to be built or sold, will lead to the biggest (compulsory) scrappage scheme in history. So the used price of your Tesla will hold (maybe not the Tesla you currently own...but the next one)...until they are also banned.
Random thoughts on a random situation

 

[Hellayella01]

Agree but how long will that be true for? estimated delivery date for an SR MY in the UK is November/December i.e. this quarter.
They have ramped up production in China but the local market may be approaching saturation based on the price cuts. So that is more cars for export. Berlin is ramping up slowly which means less China cars for Mainland Europe. So assuming they can get ships I think they could be close to having more cars available for the UK than they can sell.
Before price though I think we will see generous trade-in pricing return and maybe some sort of incentives. If we see that then a price cut may not be far behind.

As much as I’d like to see a price cut I don’t think it’s going to happen. Even after the 20% price hike Model 3’s are selling faster than they can make them, same goes for the Model Y. If the market is willing to accept the price hike then there’s no reason for Tesla to reduce it.

 

[Jason71]

same goes for the Model Y. If the market is willing to accept the price hike then there’s no reason for Tesla to reduce it.

Does it?
In July eta for a Model Y LR was Q1 2023 now it is October and it is still Q1 2023. A lot of that is the recovery from Shanghai lockdown and the factory re-tooling but now those are behind us. if the new shipping shortage does not intervene then I think Tesla may rapidly eat the backlog of MY orders. Christmas is not a popular time for ordering cars. if the eta is still Q1 in January then they have not sold the quarters full allocation of UK vehicles so I guess we will have to wait and see...

 

[Kenners]

Funny thing is even if they cut the UK price the cost won’t change as higher interest rates will push up leasing costs. All the car makers going to discover people could only afford mega expensive cars due to zero rates. And no coincidence the most profitable part of a car company used to be the finance arm.

Makes more sense to start shipping to the US from China if they have demand / capacity problem, check out the cost of a model Y in US versus UK!

 

[kelvin 660]

Makes more sense to start shipping to the US from China if they have demand / capacity problem, check out the cost of a model Y in US versus UK!

But they won't be eligible for the $7K5 tax rebate not being made in the US...

 

[Kenners]

But they won't be eligible for the $7K5 tax rebate not being made in the US...

Didn’t think Tesla got anything anyway, Elon not that popular in Washington. He doesn't pay a long list of lobbyists!

 

[Overworked]

Didn’t think Tesla got anything anyway, Elon not that popular in Washington. He doesn't pay a long list of lobbyists!

That all changes in January when Tesla become eligible again for the rebates for US built cars.

Also a large bonus for battery manufacture in the UK hence the incentive to expand the battery production there also.

But that is getting off topic ...

 

[Overworked]

That all changes in January when Tesla become eligible again for the rebates for US built cars.

Also a large bonus for battery manufacture in the UK hence the incentive to expand the battery production there also.

But that is getting off topic ...

That should have said US!

 

[UrbanSplash]

Oof, YBAC offering £49k for a 6 month old model Y with 8k mikes. Bubble burst indeed.