Will Tesla Have a Residual Value Problem?

[Lhshockey24]

Out of curiosity given the recent price reductions I was curious what the trade-in value of our X P100D (5/17 build) would be via Tesla. The residual at the end of our lease on 1/1/2021 is $98,000. Subtract the $7.5K tax credit and that’s about $90K.

Right now Tesla would give $78K for the car when supposedly it was supposed to be worth around $90K at the end of our lease. Is Tesla going to have a problem losing money on all the thousands of lease returns coming up in the next few years on cars leased before the price change and subsequent residual change? Just food for thought.

 

[commasign]

I think if and when Tesla can get FSD working, it’ll help with used car values.

 

[Lasttoy]

I wonder why u would trade in a Tesla.? I would sell it on internet.
Thers no way u will get a good price from Tesla.

 

[PHX2IAD]

Over the long term, their lack of a bonafide CPO program is going to hurt them. They can probably get away with not reconditioning cars before resale or taking a higher percentage to auction now since the volumes are so small. Once they start leasing Model 3s and dealing with trade-ins in mass quantity they are going to need a way of keep those cars out of auction lanes. And the only way to do that is to retail them through the Tesla network. If they control the greatest share of the market, then they will have a strong handle on residuals.

 

[Lhshockey24]

I think if and when Tesla can get FSD working, it’ll help with used car values.

I’m not confident they can get FSD working on AP2.0 or even 2.5. Pre-August 2017 cars are 2.0 and will be coming off-lease in masses by 2020.

 

[turtlesz]

Enjoy the cars for what they are. Seems like the die hard and informed fans have nearly all bought Tesla's if they wanted them. Tesla will have to continue to push sales so prices will drop if inventory keeps getting built up. I believe the S and X will drop 30k in MSRP over the next 2 years to match their main competitors. The S is more of a E class/5 series/A6 class of vehicle and not like a ultra luxury S or 7 series. I can see the MSRP of a base model S moving to $50-55k which is what the competitions prices start at. And the X compares to a X5/GLE/Cayenne/Q7 segment so could likely start at 60-65k in year or so. I can't predict the future but totally basing it off the prices I was able to get this quarter. Blue P3D with white interior and autopilot for $57.3k (new non demo and $7300 off), and P100D with white interior and EAP for $77k. What's considered a "screaming deal" today will likely be the norm tomorrow.

 

[SSedan]

I wonder why u would trade in a Tesla.? I would sell it on internet.
Thers no way u will get a good price from Tesla.

Sales tax bill is greatly reduced with a trade in, in many states. With the value of a Tesla, this matters.

 

[Lhshockey24]

Sales tax bill is greatly reduced with a trade in, in many states. With the value of a Tesla, this matters.

Missed the point a little, I’m not trading anything in. Was just curious the value versus the residual in 20 months.

 

[kirkhilles]

The thing that people don't seem to "get" is that it's about reliability and future repair costs. There's a reason why a $200k Bentley might be for sale for $30k. The whole "Teslas are more reliable because they don't have moving parts" is a lot of BS and repair costs (not to mention accident costs) are very, very high. I can't justify even getting a $27k used MS because I don't have $10k to throw at it as needed.

 

[raptor5244]

Probably not so much on the S and X since they are much lower volume. The Model 3 leases don't look so great right now and you have no option to buyout the car at lease end. Supposedly, they will take them back for a robo-taxi service. A more realistic expectation is that they will resell them as used inventory off the website for buyers in the $20-30k price range. A 2 to 3 year old SR+ with miles in the 30-40k will probably sell for $25-30k range. I hope it is more but it will depend what the EV market looks like in 3-5 years. The Tesla Model Y and Pickup truck should make things real interesting as those are two highest volume vehicles sold. SUVs and pickups.

 

[jesús sucio]

I'd say this 100% depends on what everyone else is making and what Tesla comes out with next. If the next generation of cars is far more capable then that would hurt resale, if other manufactures are still 10 years behind (and I don't think that's an unreasonable assumption) then resale is pretty safe.

 

[samk579]

I'd say this 100% depends on what everyone else is making and what Tesla comes out with next. If the next generation of cars is far more capable then that would hurt resale, if other manufactures are still 10 years behind (and I don't think that's an unreasonable assumption) then resale is pretty safe.

Yes! The Maxwell integration for next gen Tesla will make all existing Tesla old technology.

 

[JBNorthwest]

I've always wondered when the first non-depreciating car will come out. I feel like the whole car ecosystem is a giant scam where you throw away your $60,000 vehicle in 10 years. my last house was 120 years old. every bit of it has been redone and upgraded. Mysteriously it's worth $500,000. I'm hoping EVs with million mile motors will be this very thing, replace seats every 5-10 years, suspension as needed. computers as they improve.

 

[banned-66611]

If the robotaxi plan comes to fruition (it won't) then depreciation could be pretty bad. No-one wants to drive a taxi as their personal vehicle, and that's what Teslas will become.

Plus there will be competition from other manufacturers so forget all this "appreciating asset" rubbish. As soon as someone gets it working it will become a race to the bottom. Taxis don't care about having a large sensor package on the roof, they only care that it works and what the payback term is. Why use an expensive car when you can just stick it on a Ford and make the same money?

 

[raptor5244]

If the robotaxi plan comes to fruition (it won't) then depreciation could be pretty bad. No-one wants to drive a taxi as their personal vehicle, and that's what Teslas will become.

Plus there will be competition from other manufacturers so forget all this "appreciating asset" rubbish. As soon as someone gets it working it will become a race to the bottom. Taxis don't care about having a large sensor package on the roof, they only care that it works and what the payback term is. Why use an expensive car when you can just stick it on a Ford and make the same money?

Fully agree. The robo-taxi vision talk is cool and all but this assumes nobody ever wants to drive on their own anymore. I don't want to take a taxi or a robo-taxi unless I have no other choice. We have something similar to that today, it is called public transportation.

To your point if they want to make a robo-taxi then just build the cheapest EV possible not one with fancy white seats, premium audio, etc. It should be the robo-taxi Model 2.5 that costs $20k, no steering wheels, pedals, screen doesn't need to be too fancy, cloth seats without power, no heat seaters, why have wipers, etc. Fun visionary talk but first they have to make AP/FSD reliable enough to use with a driver in the seat.