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Your Model S just went up in price...less depreciation

Discussion in 'Model S' started by evalst2018, Jan 12, 2019.

  1. evalst2018

    evalst2018 Member

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    There has been a lot of chatter regarding the depreciation of of Teslas. If history shows anyting, all luxury cars depriciate at a farily brisk pace the first few years of ownership. Various market places are showing 3 year old model S marked down almost 50% from their original purchase prices. Now that the 75D will no longer be offered, entry level pricing is starting around $18k higher. I am sure that this should make older model S that have supercharging grandfathered in possibly more desirable and may slow down the rate of depreciation.
     
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  2. Silicon Desert

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    Hmmm, I am not following the thought process on that statement.
     
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  3. Snowstorm

    Snowstorm Active Member

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    Weird logic...
    Tesla is about to announce a refreshed S with >100kwh battery, I don’t think that will help old S keep their value.
    Tesla are on the leading edge of EV tech, it isn’t going to keep they value as they are innovating so quickly, but it is the very best to experience.
     
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  4. gaswalla

    gaswalla P4201/85/airsusp/pano/19i

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    This is like saying your iPhone 5 trade in value went up bc they stopped making it and now only make the iPhone X that is way overpriced
     
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  5. paraglide

    paraglide Member

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    You have it backwards...Would you pay a premium for 40 RWD after it was replaced?
     
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  6. emmz0r

    emmz0r Member

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    That might be true if there won't be a 75kWh replacement. But my guess is that it will.
     
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  7. Don TLR

    Don TLR Member

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    How do you know what new prices will be for mid and long range cars? Are you a Psychic? Elon call and tell you?
     
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  8. evalst2018

    evalst2018 Member

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    All good points people have commented on. I think my original intent was misunderstood, and let me try to explain.

    My point is that with the following things are occurring:

    1. The Fed rebate going away by 2019, that will impact

    2. Throw in the base price being bumped $18k with the removal of the 75d. The entry point of MS just went up

    No more lower end MS, in the $80k, removing the cross completion of their product roadmap ( i.e. model 3 buyers buying used model S instead) Please remember margin on 3s is already in the 20% range, at the last analyst call they are confident they can get to 30%. Likely with the changes they will be making at the new factory in China, they will be able to achieve this with all the leanings from Freemont. Hence margins are way better on 3s and, and thus they want MS to be a more premium product and have higher margins

    3. Pre mid2017 MS with supercharging grandfathered in ( for some this carries quite a bit of value)

    4. This makes MS, especially late 2015-2017 a super value. There will always be early adopters, who are willing to pay a premium for new. Folks who are fine dropping, $137k on a P90dl and have it worth $53k(link) 61% depreciation 3 years later with just 50k miles. Plenty of life left here as elect motors are rated for 200k-500k miles, and that is certainly evident by the Tesloop cars.​

    I believe this makes existing newer 15/16/2017 a tremendous value, and thus the rate of depreciation should slow , it may actually cause some to rise in value slightly as we saw with Leaf's and volts when Nissan and Chevy crossed their 200k ev car sales and a general public awareness and demand to move to EVs. Source: link

    At any rate, Tesla could reprice their whole line up as they seem to do quite often, or the govt extends the credit, all these outside factors could change some or all of what I have stated.
     
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  9. Modeler

    Modeler Member

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    The OP’s logic is perfectly sound. I thought exactly the same thing about my 2015 85D’s value when I heard the announcement. Existence of the brand new 75 had a suppressive effect on the used model S market. No more. If someone wants model S, and can’t afford $90k for the new 100, they will be in the market for a used S. Higher demand, higher prices. Simple economics.
     
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  10. mvotb

    mvotb Member

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    How does a 100, software limited to 75, with an upgrade option, fit into your equation? Hard for predictions to be accurate when they are based on assumptions.
     
  11. Uncle Paul

    Uncle Paul Active Member

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    Guess the point is that if there is no longer a lower range battery available the price to get into a Model X/S people will be willing to pay more for a used 75 rather than step up to a new 100.

    May become a mute point shortly if Tesla come up with a lower cost new battery, especially if it will have a faster charging rate with the V3 Superchargers.
     
  12. Vegas

    Vegas Member

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    I think the only factor that will help old MS's slow the rate of depreciation is the free supercharging. Perhaps a bit like having an old Iphone, but with free calls and data... Tesla new tech and pay supercharging, or old tech and free.
     
  13. cab

    cab Member

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    I hope it is slowing down, but that may be wishful thinking. I think my 2013 P85+ is still dropping to the tune of $600-$800 a month. Admittedly, that is less than half what it was dropping (on average) the first three years.
     
  14. commasign

    commasign Tesla Superfan

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    Elon said they’re getting rid of the 75kWh pack. But he did not say they’re getting rid of the ~$75k base Model S. Folks that keep saying the base price is going up by $18k are just spreading FUD or trying to pimp their referral codes.
     
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  15. evalst2018

    evalst2018 Member

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    Value is all about perception, there are plenty of folks who buy $150k car, with little to no idea what they are buying, they just know they "gotta have it", its an emotional purchase, or just to keep up with the Jones's. As MSs are still fairly new in resale market, the depreciation curves are not as well established as other manufacturers.

    In reality, very very few people actually need more than 200 miles of range per day. When was the last time you drove 200+ miles/day? Even if you needed to, you need 30 minutes of supercharging. 200 miles suffices 80% of normal driving easily. This move to get rid of the 75d, fits in to Tesla's previous strategy of bundling ( premium package, sub-zero package, the tech package, air suspension package) into the base price of the car. They make everyone pay for it whether you need it or want it. They now have fewer skus, and can just turn stuff on/off through software, thus using scaled manufacturing and increasing the bottom line.

    To Tesla's word...it's gone now. $94k starting price to have an "S".
     

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  16. Don TLR

    Don TLR Member

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    I don't need more than 200 per day but I definitely need it for road trips, we're not overloaded with chargers like Ca is.. The 4 corners area is very limited and where I travel a lot to so I wind up having to drive my jeep..
     
  17. dark cloud

    dark cloud Member

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    2 days ago. :cool: And every 3 weeks on average. If there were not superchargers in a few key areas I would not have bought my Tesla. So here is another factor to throw your way: the more superchargers they install the higher the resale price of used Tesla's.
     
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  18. evalst2018

    evalst2018 Member

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    Makes sense...that is in the 20%. 200 miles per day removes most range anxiety. With the increase of SuperChargers, Metro Chargers, and destination charging, along with higher voltage charging (ie faster) I think EVs will be at near 100% parity of ICE cars with respect to the lackt of of range anxiety in 2-4 years or less. People speak of Rivian, Audi, and the rest gunning at Tesla, without a charging network infrastructure I think it will be tough to catch Tesla, as they cannot address the 20%. Unless of course, 600 mile batteries and 300V home charging become the norm ( and it will probably in 5-7 years). Even with that, these traditional automakers just don't have it in their DNA to seriously compete with a company like Tesla. As long as Tesla, can fix their customer services woes, remaining fit & finish issues, and address some of the build quality issues..I think they are going to do fine.
     
  19. Oldschool496

    Oldschool496 Member

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    I agree with all your points.

    Two points you make were in my head as possibly causing the value of a 75-75D to go up prior to this thread, Lower rebate(vanishing) and Grandfathered Unlimited SC for all variants before they removed the 75-75D from the line up.

    Now with the probably temporary Discontinuance of 75-75D(lower price point car), well those in the know will definitely cause the used market to go up, supply and demand.

    Yes, the Tech is not at the edge, but self drive from A to B, even if they get it to work perfectly still has to go through the approval process. Dare I say we are 2-6 years away on that in my opinion. So the Tech is not that far off. Heated rear seats, some other minor improvements in the UI and the App. Perhaps some things I may have overlooked

    In the balance, if I could find a good CPO and thats the big question, FIND a good CPO, would I buy a used car from Tesla?

    I'm not so sure I would. Somebody else might.

    This will all change upon the next battery lower price point option if thats the plan.

    Will a lower variant ever come back or is Tesla truly creating a large gap from S,X, and 3,Y? They did it with the discontinuance 40,60,70.


    Lets see the next step in the saga. Meanwhile take good care of your 75-75D. If for no other reason, for yourself.
     
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  20. evalst2018

    evalst2018 Member

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