Tesla Model 3 Depreciation - What Will Your Model 3 Be Worth In 5 Years?
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- Опубликовано: 26 сен 2024
- A New Survey Out Shows That the Model 3 will have better than average depreciation, but there could be one thing which would trip it up. // Can't wait for your Model 3? Buy a New Model S or X today with our referral code and get $1,000 off + Free Supercharging! Learn more at • Who Killed the Tesla R...
To understand how depreciation relates to the Model 3, a car currently not available to anyone but Tesla and SpaceX employees, we need to first look at depreciation as it relates to cars in general.
Depreciation is the reduction in value of an asset. From an accounting standpoint, you can think of it as reallocating the cost of the car over its lifespan. As consumers, we can think of depreciation, when it comes to cars, as the difference in price of what we paid to purchase it versus what we sell it for.
So if you buy a car for 50K, then five years later sell it for 25K you have a 50% depreciation rate on that car.
When we think about owning a car, depreciation shows up as the largest cost always in the Total Cost of Ownership model. Popular auto sites like edmunds.com and kbb.org use this model to estimate the total cost you’ll pay for a vehicle over a five-year period. In order to use this measure as a comparative tool for different cars, they need to make some assumptions and consider all the major expense categories such as financing fuel, maintenance, repairs, fees, and insurance.
For most cars depreciation starts the moment you drive off the lot. On average cars lose 10% of their value at this exact moment while some lose as much as half moments after you take ownership.
It doesn’t stop there either; new cars continue to lose value for their entire first five years of operation with an average decline of 15-25 % per year. Most new cars will lose 60 percent of their total value in this time short period.
Recently Autolist.com published the results of a survey they did of 14,476 individuals between Oct 2016 and July 2017 which they used to forecast what the depreciation for a model 3.
Nearly 60% of the people in the auto list survey listed their main reason for not buying an EV as cost and range, if those numbers were to hold up for the larger market, the sky isn’t even the limit for the Tesla model 3. With an estimated 310 miles per charge and a starting price of $35K, the Model 3 should squash the main reasons people had for not buying an EV. Now we obviously don’t have depreciation data for the model 3 yet, but we do have it for the Model S and its in-brand competitors.
So if the Model 3 tracks similarly to the Model S and the in-brand counterparts hold up as they have, the Model 3 will hold around 70% of its value during that five-year period.
The only issue I see here is that the size of their survey is small compared to the overall market and they didn’t list how they collected this data. So, for example, the people they interviewed may have a selection bias which resulted in these findings, and without larger and more studies it’s hard to say that these numbers will hold true. Before we go on, I need to mention one thing, however.
Looking back only 4-5 years, the Model S has inferior resale value, meaning severe depreciation. The main reason…autopilot
Autopilot was a game changer for Tesla and the Model S. If your car didn’t have autopilot, the value plummeted. Even my car which I bought in 2016, was almost 50% cheaper than it was just three years prior
So could there be something that kills the model 3 resale value?
Not likely, the cars come with the latest hardware that will one day allow for full-self driving. The rollout strategy is also going to confuse things when it comes to Model 3 depreciation. In the US it’ll be late 2018 until “most” people have their Model 3 so until then the demand will remain high, possibly even letting owners of the cars sell them for more than what they paid.
We can't forget either, that we only realize depreciation when we sell our car, and who’s ever going to sell their Model 3?
I’d like to know what you think! Do you think the Model 3 will hold its value better than its competitors? Leave me a comment down below.
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Part of current depreciation models is assuming cars will not get cheaper. Can we assume this with EVs? Right now because of the Federal tax credits and State incentives, my guess is the net cost of EVs will not get cheaper anytime soon. However for those buying after the Federal credits run out this may not be true. In 5 years I full expect a 300 mile Model 3 will be entry level and adjusted for inflation will cost less than one does now.
So dropping battery costs and faster charging batteries may well be what causes current EVs to depreciate faster than expected.
great point, didn't think of that
If that is true, then cars in general would have decreased in price but they have actually increased.
yeah now that the range won't need to go up. Battery technology evolution in price and density will affect prices causing them to come down also faster charging technologies might come to effect too. Battery prices are expected to come down 80 percent in the next decade if it follows the existing trend so yeah in 3 years the model 3 will face much steeper competition then the model S today witch should increase it's devaluation by quite a bit.
Out of curiosity I checked out my car today. Tesla themselves are only offering me a trade in value of $40,800 for my LR AWD Model 3 (with EAP) I took delivery of exactly 9 months ago. With a purchase price of 61.7k (a bit over 66 after taxes and fees), and 16k down apart from taxes (over 25%), my outstanding principal on the loan I financed for the remaining 75%, even after paying regular and some extra payments, is greater than that trade in value by about $500. My car has lost a third of its value in 9 months, and I literally can't even pay down the loan fast enough to keep up with the depreciation on it, even after a 16k head start.
Oh dang. Thats not what I wanted to hear. Sorry
You would get a much better price selling it direct too next owner. Seattle area there are no second hand m3 deal as of December 2019.
Depreciation is going to get steep. As more competitors come into the market, battery technology improves, and the low cost version comes to market, people are going to ask themselves do I want to buy a 3 year old Model 3 that cost 50K 3 years ago, or do I want to buy a newer Model 3, with better tech, slightly better range, and come complete with a new low lease payment that will be lower than a used car payment on the 3 year old Model 3. The low 200mile range Model 3 will drop the fastest as no one will want to buy a used low milage one, when the lease payment on a new 300 mile one will be less. So bottom line, expect the model 3 to drop 55-60 in 4 years for the low range. 45% in 4 years on the performance model. . Let me know if 4 years if I am right.
I doubt it will hold its value. By 2023 (5 yrs after I get my model 3) there will be loads of new tech out there. Just look at how much your iPhone has changed over 5 years. Although the iPhone 4s was a good phone - it's not worth much these days.
that's cause you guys buy the same shit over and over again. If you don't buy new iphones every release, maybe something will change.
A phone only has a 2-3 year lifespan. A brand new iPhone 4s would still make a pretty decent phone imho.. a 5 year used 4s not so much...
Gareth Foster I would still chose a 4s iPhone with bigger screen, camera resolution and battery life, if it were available, most of the newer gimmicks suck, I don't expect anyone to agree
iPhones hold their value because there is not enough new technology being developed to convince the buyer they need a new one. The EV technology is still new and thus massive changes are taking place quickly. EVs are looked at as both vehicles and electronics. There is also the perception of how much battery life will I have remaining with a used EV.
you missed the part about literally every other car company coming out with affordable EV's by 2023. which will make a used Model 3 for $25k seem ridiculous.
I kind of hope that depreciation is similar to ice cars, because I can't afford a new one.
I'm hoping that some early model 3 owners get it, hate it and flood the market with low mileage, almost new cars.
That way I will get a long range fully loaded model 3 for base model money.
I know I will not see this happen, but a man can hope, can't he?
We can hope, but i expect second hand model3's to be more expensive than new ones until the waiting list is mostly gone. (or until truly comparable alternatives are available, whichever comes first)
Well it sure won't be mine. Going to hold onto it indefinitely!
If the car can drive itself and help earn money for the owner then most used tesla model 3 won't even be for sale. Better to just buy a new base model 3 and let it earn you money when you're not using it.
GrimX - I know what you're saying. But as I am the kind of miserable git who hates having people in my car, I can't see me ever loaning my car out.
Just the tjought of a strange kid with sticky fingers touching my car makes me shudder. Have you seen where kids put those fingers? Uuurrrggghhh.
Model S owners have lost tens of thousands on low mile cars. I don’t need autopilot.
I bought my model 3 last year. Paid$43,600 trade in value offered by Tesla...$29,400😱 32%depreciation
this needs an update :)
One thing I believe contributed to the depreciation early Tesla’s showed was the market perception of the viability of the company and their ability to provide continuing maintenance and (in Tesla’s case) provide the worldwide recharging stations that give Tesla owners independence from range anxiety. Look at how much Pontiacs depreciated when GM announced the discontinuation of that brand. Now that Tesla’s Model 3 (and soon, the Model Y) seem to be in full production, cash flows are increasingly stable allowing a resurgence in the resalability of even older Teslas that had suffered from this perception.
Only thing is that the Model 3 does NOT cost $35K with a 300 mile range. It costs $50K with the 300 mile range which only marginally improves both numbers from the Model S. It will take several years of production or buying a depreciated (used) car after 5-10 years to make Tesla EV's widely accessible to general drivers. I'm rather frustrated that when Tesla SAYS they will build an affordable mass market car they still keep making BMW's rather than Volkswagens.
There are already several "Volkswagens" to choose from. The Model 3 is a Tesla at heart, and Tesla doesn't make low-end vehicles.
Not really $50k with all the incentives for EVs. The upgraded range cost $9,000. So if you were to get base price + range it would be 44k. Don't forget to subtract $7,500 for federal tax credit if you live in the US.
you can't subtract $7,500 if you do not have to pay that or more in tax's because it's a tax credit not a check
theAppleWizz effectively the same thing. It's a credit not a deduction and if u don't pay at least 10k in taxes a year u shouldn't be buying one in the first place.
Tesla cars aren't required to be built with complex ICE engines with things that whirl and buzz and spring leaks. The car is very minimalistic. Having said that, practically everything can be replaced and swapped out for new parts. Therefore I can conceivably renew this Tesla car for ever. if that is the case, I would argue there is no depreciation and therefore Teslas would hold it's value if not appreciate. Thoughts?
Why lease price on tesla website is so high if the depreciation is so less?
i dont care about the depreciation, i wanna drive the hack outta that car untill its completly done
M.C. LioLenz people will make a living out of u lol
M.C. LioLenz You’re the perfect customer. 😂
I looked at the Model 3 Performance vs a BMW M3, using data from IntelliChoice. In 5 years the Tesla Model 3 Performance is suppose to depreciate $38,946 (holds 58% of its value after 5 years), while the M3 only $29,733. The Tesla does have lower fuel and maintenance costs though that somewhat offset this.
@@nafnaf0 nonsense
@@SquarePenix. guys if thats what he wants to do so be it dont be rude other people spend thousands of dollars in shoes watches bags and all kinds of useless stuff. People like different things don't judged and let others live their life how they want to
Tesla are very good at customer service in warranty. By all accounts they have their fair share of issues. The model 3 depreciation will depend on reliability as it approaches end of warranty
What about being a beat down Tesla? Lots of people only talk about battery swapping & that’ll keep the car from depreciating.What if I go to see a Tesla with a newly swapped battery but has dings & scratches all over it like some 5 year old cars,because we all go to the movies,wal mart,Home Depot,work & running everyday errands(typical places for dings & scratches).Should I still expect to pay top dollar just because it’s a Tesla?
*Mid-April 2023 here!* My 2018 LR RWD Model 3 with FSD was about $59k in total before taxes and similar inventory from Tesla with ~50k miles is selling for ~$38k which is ~36% depreciation in ~5 years. My May 2022 Model 3 was $60k and similar with 7k miles is selling for $53k in Tesla inventory (~8.5% depreciation). Note that actual resale would be less than sellers so probably subtract an additional 5%. The LR AWD still isn't available brand new but a brand new performance Model 3 is ~$55k before taxes and I could imagine the AWD being around $50k which is a market reduction of $10k, not even including the $7500 tax credit that people are getting now which further devalues anyone who bought last year. The only difference is the higher interest rates.
Tesla Model 3's went up and down in price over the pandemic, supply chain issues, used car price spike, used car price drop, and now the EV rebate rules causing Tesla to drop their prices (also the white paint I got was an extra $2k and is now free.) It makes it pretty hard to distinguish actual depreciation from market changes but effective depreciation seems to have been very very low in 2022 and high in 2023 now.
Who will sell their Model 3? Those that buy into "gotta have it now" hype, purchase a single motor Model 3, then down the road a bit decide they want to upgrade to the dual motor Model 3, or future Model 3's that will no doubt have more advanced features. This is the same thing that happened with the early S models, and why there are so many used Model S's for sale.
It's inevtable that in order for Tesla to stay on to of the EV game they will have to constantly develop new innovations and upgrades with newer models, making the earlier models somewhat less desirable.
Something to consider... An ICE vehicle depreciates mostly due to the wear and tear (mileage) of the engine. Let's say one were to own an electric vehicle for 8 years. They will likely be able to swap out the old battery with a new one that has far more efficient chemistry. Furthermore I assume that an electric motor is far less costly than an ICE due to its simplicity. Therefore what makes an electric vehicle "go" are simple parts that could be more easily swapped/replaced than their ICE counterparts. This doesn't take depreciation out of the equation but does allow for older EV's to be "refreshed" and updated to more closely align with the latest and greatest technology. The batteries will also maintain some value for re-use in other energy storage applications. The next decade will be the most transformative in automotive history.
The rest of the car will get worn, like seats, paint, and plastics.
I gave away to charity my old Mercedes 380SE after driving it for 23 years because of electrical problems, otherwise it looked like new. ICE manufacturers have been becoming more and more blatant in their planned obsolescence. That is one of the reasons why I have a reservation in for a Model 3. Musk doesn't play games like other manufacturers (one of the reasons that they hate him
My concern is the cost of ownership AFTER the warranty runs out. After 50,000 miles what happens?? I heard tesla parts are super expensive so when tesla doesn’t cover it, how much would we be out of pocket?
+respinoza89 lookup Tesloop eHawk
Imho, all teslas will tank in value. The repair costs are so high that no one will want an out of warranty tesla.
Hi Ben, I think you are missing one important point, something that might HUGELY influence the values of Tesla cars in the future and might even bring difficulties for Tesla as a company: the introduction of solid state batteries. Toyota and Dyson announced their work on the topic and said the technology would be production ready by the end of the decade. We know from the research team of Mr. Goodenough, also the inventor of the lithium-ion based chemistry 30 years ago, that the new possibly sodium based technology will beat the old technology by orders of magnitude by all relevant means. 3-10 times the capacity, much faster to charge, much more cycles, not inflammable - and much cheaper. If such technology hits the market while Tesla is still sitting on the old technology even if optimized by a factor of a few, old cars might lose a big portion of their value from one day to the other, because you will be able to buy a bigger range car for less money - new. Tesla as a consumer and also producer of batteries is affected by this even stronger. If the Gigafactory cannot be partially updated to also support alternative technologies on time, that might also impose a loss on Tesla's investments in the infrastructure. I really hope that this won't be the case and Tesla will be on the forefront of this evolutionary step in battery technology improvement or at least be a part of it on time. But even if so, the question remains whether battery exchange programs for old vehicles would be introduced to help conserve their value on the long run. Tesla has at least a good way of recycling the old batteries in their energy products. Long story short: I think the improvement of the battery technology might and will probably pose a big influence factor on the value of older electric cars. I think the topic itself would be worth being dealt with in detail also on Teslanomics. I would be happy to hear your take on it in a later (maybe dedicated) video. All the best, keep up with the excellent job! Laszlo
Won't be surprised if the origional Tesla Roadster will soon become a collectors item
Coming at this from the wrong angle...if you're money savvy, you LOVE big depreciation. Buy that 2018 Model 3 for $25,000 cash in late 2021. The release of the Model Y & updated S is going to increase the supply / decrease price of used model 3s even more this year (more owners trading in their S, X & 3 for the Y).
very good analysis on the subject, Model 3 gonna be depreciate slower than most cars in the world. The trending will be similar to that of iPhone early gens resale value. When the product is so good and so far ahead of the competition, the demand of it will be a lot more and aka slow down the depreciation.
With the wave of new tech and EVs coming out there is little change the model 3 will hold it's value over 5 years. Just be happy to be a first adopter or buy used. Either way keep your vehicle for 10 years. It's good for your wallet and the environment.
I think it is unpredictable what it will be in 5 years. There are two very strong opposing variables.
+Supply of 200+ mile EVs may not catch up with demand.
-In 5 years, new EVs may charge at 350kV, have double the battery per dollar as well as other potential improvements.
Arjen Smit I think basically doubling or tripling the market for EVs will hit the general 'resistant to change' portion of the population. Although I think the EV market will hit exponential growth, it will not be smooth or easy. Demand will wane then pick up once the inert masses get pulled in. Remember oil prices will get crushed if the EV market takes off. Gas driving will be super cheap. Until, at least, new investments start to dry up since profits will be gone. Once that happens expect violent swings in the oil gas markets. Price spikes will drive the timid late adopters in. It will be bumpy not smooth. But: "prediction is hard, especially about the future" !
In europe our governments will surely prevent gas from getting cheap :D
I think the gas prices here are already causing EV adaptation to go much faster than in the US.
Indeed hard to predict it all.
Personally i do think that there are a lot of people ready for EVs. When there are 400-500k pre orders, thats just the tip of the iceberg, the people so fanatic that they will pay 1000$ to wait 1-2 years for an unseen product. For every 1 of those there are probably a few dozen who will buy a good EV when they can just go out and get it.
It looks like they’ve actually appreciated.
I think we can consider 2 edge scenarios and likely outcome will probably be somewhere between these 2 extremes.
Scenario 1:
Progress has been fasten than anticipated.
in 5 years there's a new $15-25k EV with 300 mile range with specs similar to 2018 Model 3 Long Range, but smaller and more efficient.
Li-ion batteries got significantly cheaper.
There's a new self-driving hardware 100 times more powerful than Tesla's hardware 3.0 of 2019 that's incompatible with older Tesla vehicles.
Self-driving with hardware 3.0 works but not quite up to 2024 standards and it's not allowed to use for ride-sharing.
In this scenario Model 3 long range can drop to as little as $10k after 5 years.
Scenario 2:
Progress has been slower than anticipated and the cost of li-ion batteries stopped declining almost completely.
In 5 years there were only marginal improvements to EV's while costs to manufacture remained almost the same.
Self-driving in Model 3 with hardware 3.0 works good enough to allow for self-driving ride-sharing.
Self-driving tech hasn't improved much since hardware 3.0.
New EV's with 300 mile range with comparable specs to model 3 still cost at least $40k+ in 2024 and there's no any government subsidy left.
In this scenario 5-year old Model 3 can cost as much as $30k, maybe even $35k retaining much of it's value.
My bet is that 5 year old Model 3 long range after about 50-70k miles will cost about 20-25k, but who knows...
With the first scenario, which I am also anticipating, the best bet is to keep the car. Still, it will be a great car, with old technology, but better than any other existing expensive car if you buy them today.
I have only purchased new cars, a total of 8, some for my spouse, and have never factored in the selling price expectation. I get new cars for reliability and function. I've traded in every one of them due to repair issues being too expensive. Two of those I had for 8 and 9 years. This car will be another step up in function and reliability, I hope. If it ends up not becoming the expensive repaired car like my past I'll keep it forever. Would be nice to have a third car that outlives its payments. The depreciation will be due to charging (speed and flexibility), battery life, distance to recharge and autopilot advancements.
If its upgradable, like a custom built pc, depreciation rate will be slower.
My former 2016 Hyundai Genesis was $50k new, and was worth $25k in 2 years lol so a Tesla losing 50% in 5 years is perfectly ok with me!
Not bad, but you really need to talk about how the expiring Federal Tax Credit will effect the Model 3 resale value. Once the $7,500 tax credit is not longer available, (and that will be soon after Tesla ramps up Model 3 production) the Model 3's resale value will get a huge boost, because it effectively increases the used Model 3 market by ~$7,500.
Here's a few things to consider:
The Nissan Leaf seems to have the most aggressive depreciation of any vehicle out there. After the government incentives and such (which will go away in time), you would spend $30,000+ on one back in 2012. I see a 2013 model on Craigslist right now with 18,000 miles for $7500. Show me any 18,000 mile car that costs anywhere near $7,500. If you do the math, that equates to $1.25 PER MILE! At that rate, it would cost me $115 PER DAY to commute to my job and back. The most significant difference between the Leaf and the Model 3 is that the Leaf has all of about a 100-mile range on a good day. Doubling this range makes it practical for someone who lives outside of a city's highway beltline, but read on...
With the majority of urban dwellers parking on the street, they have no place to re-charge their vehicles unless they run an extension cord out across the sidewalk. Or, go to a charging station. Going to a charging station is almost as bad as making another trip to the laundromat. Not many people I have met actually enjoy doing that. To make matters worse, as the charging stations start getting privatized, simple supply and demand is going to adjust the price of electricity to something probably about half the price of gasoline. Who is going to want such a car?
So, now we have to look at what type of demographics typically buy used cars. Typically, they are those who live in apartments. Apartments really don't have much for charging capabilities, so its off to the charging station for sure unless you run a cord out of your bedroom window. Then, as charging stations and infrastructure gets built up, then out come the copper thieves with a bolt cutter and grab some really nice thick gauge copper.
If people will break into houses to steal copper pipe, you can't tell me that this won't happen on a reasonably often basis. Who is going to want such a car?
Next, battery life. I am not talking about miles or charging cycle ratings. Show me *ANY* battery *ANY* time in your life in *ANY* device that has lasted 10 years and was still strong. I have yet to see it. If suddenly Tesla's Panasonic battery specifications make them last longer than a typical laptop or E-cig battery, why can't they make me a Lithium Ion battery to start my old petrol burner? My motorcycle, jet skis, snowmobiles, etc. I hate replacing batteries. They are expensive and go bad even if you don't use them. Imagine having a $35,000 car that has good resale value that after 8 years, it comes time to sell it. Well, in time, it is going to become common knowledge that you are going to buy that 8 year old car and have only a few years left in it before it is going to need a really expensive battery replacement. Who is going to want such a car? Replacement of an engine or transmission is still going to be less than half the price of a new battery pack. Even some Leafs are getting battery replacements already. Look at them on Craigslist. It isn't uncommon to find one advertised as having a new battery. If you buy an electric car NEW and drive it a lot of miles in 10 years, and can charge it off of your household electric supply, the fuel savings will actually pay for most of the car over time, but we are talking about USED car values. There are a LOT of 2008 model year cars still on the road and doing well. Until the battery can achieve the same level of longevity or be manufactured for less than 1/3 of the current price, the resale value of these cars are going to plummet.
Before you bash me, SHOW ME A BATTERY THAT HAS PROVEN TO LAST 10+ YEARS of regular use!!!! Please!!! Nobody has ever been able to do that. They just keep looking at charging cycle ratings and that isn't good enough. TIME is also a factor.
Another battery idea would be to continue using the Panasonic 18650 battery cells for 2 decades at a time. There will always be a decent supply of wrecked cars out there. If you have a car that is 8 years old, and you can swap the cells with a 1 year old car that was totalled, that would make it very affordable and be a big boost in recycling.
+Paul Standaert www.tesloop.com/blog/2017/8/30/tesla-model-s-hits-300k-miles-with-less-than-11k-maintenance-costswww.tesloop.com/blog/2017/8/30/tesla-model-s-hits-300k-miles-with-less-than-11k-maintenance-costs
I've gathered that due to the reliability issues that Teslas currently have, it's best to have one under warranty and then sell it once it is out of warranty. This can flood the market with sellers and lower the amount of potential buyers. Also Tesla likes to gradually lower the price of their vehicles over time. If I buy a Cybertruck for 2022, then in 2025 a brand new one could cost $5k less, so that hurts my resale of the 2022 which is now closer to being out of warranty. Also due to the price of the full self driving package, that has to be included in the overall price evaluation when calculating depreciation.
Resale of a car is generally related to the number of units for sale Vs number of customers. So the Model 3 may have an unusually high resale for a while [because of demand] until more units are in the resale market. In a few years when the market is flooded with used Model 3s there could be some good deals for buyers. If the product shows the ability to go many miles with little maintenance costs then the resale could be better than ICE cars which are viewed as "used-up" when they approach 6 figures on the odometer.
I actually fucking love this guy and and his videos he makes good statements and funny ones too and I agree who’s gonna sell a Tesla model 3 I’ll drive it until it dies
First of all. Tesla's EVs. are such a new product you can't compare them to an ICE car at all
After 5 years and 200 thousand miles driven plus maintenance of a ICE is why you buy a new car. The ICE has over 2000 moving parts in the power train ..... The EV only has 19.
What people don't relized yet is the Teslas ( all EVs.) have a extended life ...... I'm going to guess it's about 15 years .....electric motors never wear out
A tesla could very well be a once in a lifetime purchase
One more thing no one is talking about.... there's no way it costs more to build an EV then an ICE auto. The price of an EV is really the battery. ...and that price is dropping fast.... there's no way to make an ICE cheaper.
I think most people see this...
You are clueless if you think an EV is so simple. The battery has to be cooled or heated and this is a fairly complicated system. I know Elon said a Tesla will become an appreciating asset. Nonsense. In 5 years when the market is flooded with cheap Korean, domestic and VW EVs you will be lucky if your Model 3 is worth 50% of what you paid.
The Model 3 will not exhibit the same kind of depreciation that the Model S did. Yes, the Model S was a stable for Tesla's existence.. however, the Model 3 is the staple to really beginning that huge turn towards sustainable energy and the adoption of electric vehicles into today's society. Therefore, (I believe) depreciation of the Model 3 will be much less than the S.
When you buy a car you don't expact to make a huge return on it later ....
I would think that it actually will loose value. due to the model Y being a more practical family car.
I agree, I think the Model 3 will hold is value better than it's competitors. It's the first affordable compelling electric car - i.e. with decent range and great features.
So whats the answer? You talk about the survey being done that shows a 60% retain of value and then you go and cancel that survey by saying that the sample size was too small. So whats the answer on the question of your video?
I'm curious what you think? As a data geek I'd say it's unreasonabl to put forth any estimate, but it doesn't mean we can't have fun guessing :)
Hmm okay. Lets take what we know as a fact in depreciation in conventional cars. Besides as you said they lose from 10% and more the moment they stop carrying the "NEW" stamp they also lose exponentially more the more you use them. For example after 5 years time in many places around the world most drivers will have driven half of their car's lifespan (i am giving here an estimate of about 20k km per year and a conventional engine's lifespan at 300k km before extra issues arise) so with these numbers its easy to see why most cars lose that much value (depreciation as you mentioned 50% and above plus the costs to repair etc). Now with electric cars we don't have that. The only things that needs to be changed in an electric car with good to very good usage are the tires even if they drive 5 times as much as a conventional engine per year. Battery has a 8 year warranty in tesla if i remember correctly and if i also remember correctly, but don't quote me on this is that if your battery loses more than 20% of its capacity during that time tesla will replace it. So with these numbers my estimate would be for model 3 assuming though that when they hit the roads they don't get plagued with problems like say samsung note 7. Great phone for what it was offering but literally ticking time bomb. Depreciation for model 3 with really good taking care of: -10% for no "NEW" stamp anymore and then a -3 to 4% per year so another 15-20 %. Total retained value ^65-70 %. Now many more smaller facts play role and understandably not all can be noted. Points can be deducted if the car owner was a smoker, if he would not drive carefully and the axis is tortured, i mean for the heck even living near the sea can cause faster damage to your car than living in the countryside. With my above reasoning i would assume that if the car can retain excellent status in cosmetics and chasis it would retain 70% of its market value with a side note that aside from baltic countries in Europe many others are now starting to put good electric car support so this will allow in 5 year time the depreciation to remain at that point.
P.S. Many of this I think that you also note in your previous videos and I found it a bit sad that you didn't mention them here and make a good summary/presentation. I also know that the text above may be a bit chaotic so sorry for that.
He did not actually say the sample size was too small. He said it "might" be too small. He was essentially hedging his bet--not because he doubts the surveys premise, but rather that as a data scientist he knows the sample size makes the margin of error quite large.
50 percent in the 5 years works for me. Since the average age of a vehicle in America is 11 years...maybe I'll end up keeping the model 3 for all 11 years as long as it serves well. The range of 220 miles is more than enough between charges and the recharge time overnight works for me as well. I'm a little disappointed in the acceleration to 60 mph is not in the four second range as a base model. Of course I'm being ridiculous but that area being performance would or could get me to trade in. Good videos..thanks for posting.
Jonathan Brown If the dual motor is only $4000 (£3000) extra, the larger battery option might then be worth it, if together it gets mid 4s 0-60? (as well as longer battery life and range?)
Here's a good hypothetical reason for quicker depreciation or selling your Model 3: A Model 3 in say 2019 gets the ability to supercharge at 350+kW. But only new cars get this ability. I would bet some early buyers would sell their cars and buy a newer one. This happens quite frequently for some Model S buyers that wanted new hardware features.
The Model 3 is going to be the next Toyota Camry and That's why I'm sticking to my 1986 Porsche 928S V8 that gets 16-25 mpg with a 23 gallon gas tank and takes less than 2 minutes to fill up. 0-60mph 5.7sec top speed around 160 mph. It's equipped with ABS, LSD, 8" Android GPS, Bluetooth, rear/ front dash cam and a hatchback to fit an EV bike. I do work on my own cars so maintenance is not a problem and when it dies, I'll convert it to an EV. Autopilot is a joke unless you're flying.
Estimated depreciation and actual depreciation are two different things. I think the latter will be much greater
If the tesla model 3 can fully drive itself why would you even want to sell it? Send it out in a tesla car sharing network and earn you money.
Hey planning on getting an S or X and I was going to go with a different youtuber's referral code because I did not want to have to go through your website to get it. But with all the stuff you put out there/ work for EV I felt you deserve it so I did go through your website...
DM me on twitter and I'll send it to you...
Hey, I don't have twitter, went through your website and got the e-mail but it does not actually include the code in the e-mail, it links me back to your website to enter my info.
I'm afraid the model 3 will have a similar fate to other cars. I expect around 50% depreciation in 5 years. A great steal to pick one up with 80-90% of drive-train and battery life remaining
I predict the Model 3 will have very little depreciation for about 2 years due to the lack of competition and an availability backlog. After that I predict a bit less than average depreciation for the next few years. However, once used Model 3's come onto the market, I predict Model S depreciation will go up significantly.
Please, make a video about your purchase, your experience. Like, I bought a 2013 model S XX kWh by USD XX, which means half of the price of a new one. The autopilot that I have is XX and the changes in model S occurred at the years 20xx with the enhanced autopilot, 20xx with the HW 2 and 20xx with Simon.
In the last 12 months, I run XX miles and have these issues with the car XXXX. The customer service was good/regular and the cost of repair was USD XX.
…..
And remember, when you free the data, your mind will follow. Thanks !
Look for "Yearly Cost of a Tesla"
There is limited market for EVs. In 3 years they are going to be too used EV for the market to absorb. The model 3 will be ellipsed by many new models and brands. Remember, 2022 is the year many Auto makers are releasing their quote-unquote model 3. You havn't even facted in the Chinese brands. China is already building full size EV buses. 10 major world Cities have already ordered them. They are working w/ Uber. How strong is China? Tencent, a Chinese co. OWNS 5% of Tesla.
You're forgetting that the percentage depreciation on the Tesla (although smaller) is applied on a much larger sum compared to non-luxury gas cars. So you'll still end up losing more money per year on depreciation.
Buying slightly used letting the first owner take the initial depreciation hit greatly helps
Ben Jake I’m with ya, that’s what I’m planning to do with the cyber truck!
As soon as they appear on the used market, I’m buying one. 👍
I agree with you hundred percent.
A depreciating car is really in the eyes of the user.
If Tesla develops Ultra Supercharging at 5 or 10 times the current charging speed, that could be a game changer similar to the addition of autopilot. Another depreciator could be reduced battery costs on newer vehicles driving down all EV prices including used vehicles.
s-f
This will be the change that makes the difference in a few short years. You nailed it.
The reality is that repair for Model 3 is MUCH more expensive than a regular car, period
4:40 "The cars come with the latest hardware that oneday will allow for full self-driving capability." This is now false right? Unless you bought a model 3 sometime in 2019, you will not have 3.0 HW. Perhaps this is a non-issue, as when you pay for FSD upgrade, they will upgrade your HW, correct?
IF you FULL buy FSD then it includes the HW upgrade like mine did but if you want to use the subscription model, I've heard you have to pay $1-2k for the computer upgrade unless your car was something like mid-2020 or later. Still even HW4 is rumored to be in the works for true FSD so HW3 may be limited. I use FSD on my 2018 with HW3 and it's pretty awesome imo, but I can see maybe another leap in HW making up the difference in little issues that FSD currently has.
Tesla will be able to increase the value of it's certified used Model 3 stock by updating/upgrading these cars with the latest autonomous driving software and perhaps freeing up additional battery power, performance enhancements, ect. This will be easy and inexpensive for Tesla to do yet add tremendous value for Certified Used Model 3 buyers. I plan on buying a certified used 3 from Tesla once the Y is in full production as I anticipate many 3 owners will trade in their 3s for Ys there by softening 3 demand. Until then I'll make do with my old Porsche.
If Tesla has another breakthrough, it can depreciate just as quickly. The next model might be able to recharge in 30seconds or a few minutes, for example. You just don't know, and it doesn't matter as long as you don't mind the risk.
Also: don't buy new, buy one when they are 2/3y old if possible (any car)
How about flying car option?
Teslanomics by Ben Sullins Might be, if it ever get's the label safe enough. It could just happen that another car company has fully autonomous level 5 driving before Tesla, but it is highly unlikely.
I will probably wait a few years before getting a Model3. To me it's not worth it to strech a specific budget to a (new) model 3. I'd rather up my investments in Tesla in the meanwhile.
A high end model S that cost 120,000 will sell for under 50k with just 15000 miles on it
Where? I’ll buy it!!
Silly to factor in depreciation on a car. It’s a liability not an asset. Average age of cars on the road is 11.5years. Drive it till it dies, or maintenance cost is too high.
At some point within the next 2 to 5 years affordable solid state lidar will become available, at which point Tesla will put it in their cars when they refresh the autopilot hardware, and believe me they will since lidar is just that much safer, I also expect Nvidia to release their next gen Volta architecture which will also go into the cars.
In 5 or so years when there are more used model 3s, model Ys and cyber trucks on the market the older used model s’s that are on the used market now (in Aus) will be dirt cheap.
Tesla will have introduced their plaid drive train and the km range of Tesla’s that are on the road will be far higher than what there is now.
So the low range model s’s will depreciate a bit due to simply not having the range to compete with other us Tesla’s on the market.
price is dropping, means it depreciate more
I don't believe the Tesla Model 3 can achieve level 4 or 5 autonomous driving capability without lidar imaging technology. When this becomes clear to the public the resale value of the model 3 will tank, at which time the Lidar imaging technology will be installed in future Tesla Model 3s.
Nonsense. Have you been shorting Tesla again?
The higher innovation the higher appreciation. May we have 3 times better batteries in 5 years? Possible.
Some of the depreciation is artificial, in the sense that the original buyer buys it for say $35,000 and gets a $10,000 tax credit, everyone knows he actually paid only $25,000 and the next buyer will start from there and work down according to wear and tear. So it may appear to be a big depreciation, but the government incentives cover a huge part of it.
I think EVs are going to always have more depreciation due to the tech factor, even the ones with autopilot are going to depreciate fast because there will always be better batteries, motors, inverters coming out.
I do think once all incentives on EVs are gone, the perceived depreciation will decrease. Nissan Leaf appears to depreciate 90%, but the truth is most of that was eaten by Nissan and the state and local incentives.
Scott Warren, he's saying that the lack of autopilot on the early model S made their value plunge as soon as newer models came out with autopilot, and Tesla stated that it can't be retrofitted to old models.
I definitely agree with you. We can already see en example of this with the leaf were the base price model has 40 miles more of range and most tech for less money. And this is coming of the line. The trend of evs is to come down in price at least for now and the next few years. That will translate to faster depreciation.
wascar mieses, yes, I think they will be discounting the leftover 2017 Nissan Leafs very heavily, and with the tax incentives on top, it's going to be a great deal for someone who wants a nice city car.
I'm wondering hoe the model S will hold up once they are 8 years old, no warranty. How well will all the rubber gaskets and insulation hold up? When will these become an electrical nightmare? I've had ICE cars that were electronic nightmares when they got old, how about EVs when they get old?
fatboy19831, I think the Bolt will suffer a lot of depreciation until Chevy gets some tweaks done to the battery. They had a good battery in the Spark EV, but went with a cheaper cooking method for the Bolt, and perhaps cheaper cells as well. The spark EV charges faster than any Tesla, but the Bolt EV charges slower than Tesla model S, and but perhaps the same speed as the model 3. We won't know until some model 3 owners start posting good videos.
fatboy19831, yes, the Spark EV basically used the Volt battery design, which is probably one of the best (but most expensive per kWh) batteries. If they make a 60 kWh battery with that technology, it could charge at 150kw and it would be much faster charging than a model3. I'll be surprised if the model 3 can charge much faster than the new mini superchargers (72kw) Tesla is putting out.
The technology is there. Chevy and every other car maker can make a good EV, it's just a matter of getting the right balance of performance and range for a good price. I still feel most automakers are waiting for the right time to jump in, when the EV is actually economically viable, which will happen in the next few years at this rate.
I don't understand. If a new car loses 15% to 25% of its value per year, then why is it Tesla expected to lose 30% of its value after 5 years?
People would rather buy a new Model 3 than a Used 5 year old Tesla if the price difference is low. Other car companies are catching up so prices are going to be lower in the $15k -$25k range. Do you remember the first $400 Texas instruments calculators during the 1970s? You can get a better calculator for under $10 or download a free app on your phone.
If you want low depreciation get a car, a Roma a Tributo or 911.
In a free market a used car price depends on multiple factors. If Tesla plans to grow and develop newer and better cars (I hope they do) after hundreds of thousands Model 3 will be on roads, then Model 3 will depreciate at similar rate others do. Why would you drive an "old" 5-years old car if there are new cars available with newer design, larger driving range, more power, etc.? Then, you want to buy a new car and get rid of your current one. This mind set might not be true for an upper class Model S, however, very reasonable for an affordable Model 3.
The state of EVs is now comparable with Computers in the 90s. In the 90s the power of a Computer doubled each 1-2 years. Now there is no such increase of power. Computers are mature now.
So current EVs will drop very heavy in price as used cars, because new EVs will have more power an mileage. And the price for new EVs will drop the next 10 years. At this time I would try to get a cheap used EV, which fits my requirements basically. Then, in about 5 years, I would buy a new one of the actual state of art.
In short terms. EVs are a bad investment now considering deprecation because of the fast progress of technology the next 10 years.
If I were to fork out a $50,000 on a new car but would look at all the numbers including depreciation value, I'd be a careful calculating buyer..then, why would I bet my money on a survey of a group of people I don't know. We all know the accuracy of polls after the last election. And Ben, do you even believe these results when you know you bought your 3-yr old model S car at 50% value DESPITE several hypes that helped retaining its resale value, 1) company assurance that it is best resale value in its class, 2) free fast charging lifetime, 3) unlimited lifetime maintenance warranty. Now the Model 3 doesn't have all of that going for it. It will fall right in the pack of the cars in its class or worse, like other EVs.
Addendum. Interestingly, you can lease the Chevy Bolt for under $300
A lot has to do with how well the AP2 hardware will actually work for FSD. I will not buy a Tesla(or any new expensive car) before I know the hardware actually works and that the car can actually drive itself. There is already AP 2,5 and I guess soon there will be AP3.
Honestly I am skeptical of the model 3's autonomous mode. Self driving hasn't truly been demonstrated in a production vehicle. I also think that tesla is a company that innovates and.most certainly will ads new features. Autopilot came.out how long ago and we didn't expect it at all.
With that said, tesla is very much supply constrained. So the model 3 might hold its value for a few years on that metric alone.
It will be a game changer
Even 25% of value loosing by year means that if I want to sell my car after 5 years I have to pay to the buyer 25% of the value. :) Cool, I want to buy all!
Ian Contrar math isn't your strongest suit! Let's use 50% depreciation per year to make it even easier. Something worth $100,000
Oops! Something bought at $100,000 dollars will be worth $50,000 after first year, then $25,000 after second, then $12,500 after third year, then $6,250 after fourth, etc etc
The first mistake is not going head to head with gas. We have a lot of very nice gas powered cars to chose from and they are in direct competition with EVs. I think it all has to do with everyone needing the newest and next greatest thing and EVs are advancing much faster than gas cars so they will depreciate much faster. With me, if you had two friends buy new cars and one was a Tesla and one was a MB S-class I would walk right past the Tesla to look at the MB. The Tesla will only be something cool for one year at best then it's old and out dated like an 8-Track player.
Depends on battery technologies I gusse
I also think that the model 3 will have many improvements in the next few years plus all the manufactureswil be putting EV's that this model 3 will depreciate fast...
Question; why exactly does a new vehicle depreciate once you drive off the lot? Is it just like pure greed by someone somewhere? I don't get it. At least let it keep its same or slightly less than value for a certain amount of time!!! Don't just stick it to you before you get out the door (or off the lot) I will most likely never buy a new car, ever!!! Unless of course I became filthy rich and money wasn't an issue. Which will likely not happen. Although I'm always hopeful 😁
You leave out leases, many will be leased and in 2-3 years, leases will start to swamp the market since most leases are 2-3 years.
+Adrayven well, the price of the lease is also dependent on the resale value of the car
And Tesla hasn't been selling Model 3s on lease. Moreover, everybody seems to be forgetting foreign demand. Europe is busy getting rid of diesels and the market for EVs is booming
Its doesn't matter. The model 3 is a company appliance. Writing off every mile and in 5 years it will pay for itself.
I want a Model 3...
5 years old battery is about to die ,depends on the number of charges and temperatures how quickly.
Tesla owners are ashamed to say , i regretted to buy a Lemon.
It’ll depreciate ~46% in the first 5 years, book it.
I drive so much and I loose so much per year for diesel, that after 4 years of using M3 I will drive for free and even if M3 will be worth nothing I still will gain a lot, so I don't buy this 70% of value loosing theory. I think that market doesn't know yet how to treat electric cars, because in real they are worth much more than 70% of their value after 5 years, but economic brains didn't get it yet, becaue they still don't understand how big revolution Tesla started and how big consequences will appear on next few years, not mention about next decades!
Once EVs prove their long term viability, the depreciation rate will slow. In the meantime, if is probably best to buy a used EV or to buy a keeper.
Not mentioned: the horrific depreciation of luxury cars, which the m3 mostly is. It will be tied to a market full of enough arrogant young showoffs to create a high turnover market. No offense boring old people interested in a Tesla (me).
It would be more than stupid to pay more than 5000$ to get 5 year old model 3
The model 3 will depreciate just like the model S. It’s a computer on wheels and just like your laptop or phone is worth less than half price. The 2018 model 3 will soon be worth $19,000 on Craigslist. Owners will have lost $30,000 in 3 years. Why because the 2022 Tesla will be out.
I am planning on changing my car in first half of 2019. If I reserve my model 3 now do I have any chance to get it by that time? I live in Finland
+snowbeen hard to say, you can always cancel
i got my 2006 bmw e90 for 15% of its original MSRP of $40,000
Seems that if the depreciation expectation is that good, then it would make sense for Tesla to lease the car. Since the residual value of the car would be high, making the lease price low. But they aren't leasing the Model 3, leaving me to believe that they can't make the numbers work with respect to the residual value. I'll bet the depreciation (or residual value) at the end of a 3 year period is more like 50%. If so I would agree that the economics of leasing a car would almost equal buying the car.
I will be in the first traunch of Model 3 owners, and I am VERY disappointed that I won't be able to lease it. And someone is going to have to explain why. Until then I will blame it on excessive depreciation assumption. Probably because the car is overpriced, anticipating that we will all receive the Federal Tax Credit.
Someone tell me I am wrong
Yes. I will tell you that you are wrong. If Tesla has 400 reservations why should it provide leases? And they don't have to explain anything to you
There will be so many new EV's out there in 5 years which do it the same or better. Battery costs will come down. The model 3 of today will the...remember that old thing of tomorrow...soon. Your mad to jump in now and line up and part with $1000 deposit waited 2 years and then pay close to 60K to have the car now. Better prices will come to those who are patient...
Well, Tesla reduced the prices a couple of months ago and many people lost 15tsd Dollars overnight. Tesla shouldn't do this..
Statistics allows you to take 1k people and extrapolate if done properly
lol!!! - "Depreciation only becomes a reality when you sell your Model 3. And... who's gonna do that?" - Love it! :-)
I took musks advice and made a fortune renting my car out as a fully autonomous taxi. It has simply been amazing, I would have been a fool not to have bought a Tesla.
lol
The only reason a car depreciates the second you drive off the lot is because someone just said that and other people agreed. There is no real reason for why that happens. Using that same logic why doesn’t a car you take for a test drive lose its value??