Tesla Model S Is Resale Value Champ In UK

2 years ago by Mark Kane 13

Tesla Model S

Tesla Model S

Tesla Motors store

Tesla Motors store

According to CAP Black Book in the UK, the Tesla Model S holds value better than other cars because drivers love them.

The second reason is for the S holding its value so well is that most of the Model S electric cars are well equipped above the standard trim.

The growing Supercharging network and software updates also improves the experience over time.

Jeff Knight at CAP said:

“The Tesla is still, relatively, rare in the UK and most are bought new by passionate enthusiasts or business fleet buyers. This means that second-hand examples tend to be fitted with between £10,000-20,000 worth of optional equipment. This helps the Tesla hold its value on the used car market. At Black Book, we have held Tesla values static for a year now, which is highly unusual.”

Knight continued: “Many Tesla owners alter their lifestyle to fit the charging regime, because they are that passionate about the benefits of their vehicle. In the US, it’s not unusual for owners to call at the supercharger on the way home and sit in the car, using the free Wi-Fi to send emails as the car charges.

“People, clearly, love this vehicle, which means it holds its value. For anyone looking to buy an executive car with green credentials, but can handle the charging regime, a Tesla is one of the smartest investments in today’s market.”

Sadly there is no example data of percentage of held value for used Teslas over time.

Source: Fleet News

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13 responses to "Tesla Model S Is Resale Value Champ In UK"

  1. ffbj says:

    I think another factor is Musk’s guaranty that they would hold their value. i.e.
    PALO ALTO, Calif.– “Tesla Motors announced today that it is raising the Model S resale value guarantee to be the highest of any premium sedan brand made in volume (excludes rare, low volume or limited edition vehicles). Buying a Model S through the Tesla financing offering now comes with a guarantee that the resale value will be higher than that of BMW, Audi, Mercedes, Lexus or Jaguar.”

    1. Speculawyer says:

      I suspect that Tesla very carefully controls the amount of Model S cars they build. They don’t build unless there is an order. And if you want your car quickly, you need to order a high-end model . . . the 70KWH models (and former 60KWH models) are only built when there are no higher-margin purchases in the queue.

      I’m not alleging a conspiracy or anything . . . just good inventory management.

      1. pjwood1 says:

        Tesla also doesn’t fleet vehicles, in any serious way (an auction value killer).

        The buyback used to be (trying to remember) ~36k of the base Model S price, plus ~45% of the options value. We’re just about at 39 months, and good luck finding one for 40k. Closer to 60k, or so. This was the main reason Wall Street used non-gap, because the ~40k contingency was a near value-less liability.

        Nobody puts back a lease car, they can sell or trade for 10-30k more $$. That’s the shrewd way Tesla structured its first lease program. Now, I believe they do both traditional and the newer guarantee.

  2. Speculawyer says:

    I think it the high resale price is due to the car’s desirability and high initial price. A lot of people would love to pick up a used one but used market is still pretty small since the new market is pretty small.

    And Tesla (wisely) refuses to massively ramp up production since if they did that, they would just end up with excess inventory forcing them to slash prices.

    And since there are STILL no other long range EVs available at all, they’ll be able to keep playing that game.

    1. Pushmi-Pullyu says:

      Speculawyer says:

      “And Tesla (wisely) refuses to massively ramp up production since if they did that, they would just end up with excess inventory forcing them to slash prices.”

      Huh? Correct me if I’m wrong, but Tesla has been ramping up production at roughly 45% every year, since the Model S debuted, and their plan is to continue doing so until the Model ≡ comes out, at which point they plan on ramping up production much faster.

      So far as I know, there is no other auto maker of any significant size which is ramping up production even remotely that fast. Not even in China, where there are a large number of small auto manufacturing companies, but very few large ones. So far as I know, the only auto makers ramping up faster than Tesla are very small ones indeed.

      Speculawyer, in an earlier post you said:

      “I suspect that Tesla very carefully controls the amount of Model S cars they build. They don’t build unless there is an order…

      “I’m not alleging a conspiracy or anything… just good inventory management.”

      Yes, but I submit that’s only a small part of the picture. More important is how Tesla manages demand using promotional events, tweets by Elon Musk, and by carefully timed rollouts of improvements in the car; improvements like the “D” dual drive Model S, increased battery pack sizes, and repeated incremental upgrades in the 0-60 time.

      In other words, Tesla is creating or increasing demand for their cars, and they carefully manage how fast demand increases so they won’t ever be caught with more manufacturing capacity than demand.

      This has worked pretty well in North America, in Europe, and in British Commonwealth markets… but not well at all in China. Note Tesla’s recent promotion offering, for the first time, an across-the-board price reduced price on the Model S for the China market, and only for that market. Tesla wouldn’t be offering a reduced price if their usual promotional strategies worked in China as well as elsewhere.

      1. Robb Stark says:

        There is no specific Chinese price reductions other than the ~$1K off on referral like every place else.

        The Chinese “discount” is a trade-in offer where Tesla auctions off the trade-in car without auction fees for Model S customers. Not really a discount. Auction fee is just noise and a reshuffling of fees.

        1. Pushmi-Pullyu says:

          Well, here’s what the InsideEVs article on the subject says:

          “Tesla Motors announced on its Chinese blog in November a year-end discount of up to 80,000 Chinese yuan (today over $12,500) if a Model S buyer switches from non-electric or other electric cars.”

          Okay, it was an overstatement for me to call this an “across the board” discount.

          Robb Stark said:

          “Not really a discount. Auction fee is just noise and a reshuffling of fees.”

          Sounds like you’re suggesting that Tesla sales reps are engaging in the same sort of “four square” head games a legacy car salesman uses, shuffling numbers around, trying to find some combination of price, down payment, monthly payments, and trade-in value of the old car which the buyer finds attractive while not actually saving the mark buyer any money.

          Tesla has earned a reputation for a pleasant sales experience precisely because their sales reps do not engage in those sorts of sleazy sales tactics.

          Whether or not you want to label it a “discount” on the price of a Model S in China, it’s a sales incentive which Telsa offers, reducing the price to many (but not all) customers for buying a Model S in China, and only in China.

  3. Jonathan says:

    The reason used Teslas sell for more than low range EVs is that the $10K or so tax credits are a smaller percentage of the purchase price compared to something like a Leaf, so the values don’t take as big of a hit.

    1. ffbj says:

      What passes for logic these days.

      1. Nick says:

        I think you meant arithmetic.

        😉

    2. Pushmi-Pullyu says:

      Jonathan said:

      “The reason used Teslas sell for more than low range EVs is that the $10K or so tax credits are a smaller percentage of the purchase price compared to something like a Leaf, so the values don’t take as big of a hit.”

      That has very little to do with it. If you added tax rebates back into the purchase price, you’d discover the Model S still has a resale value surprisingly high for a mass produced car.

      Why does the Tesla Model S have such a high resale value?

      1. Because Tesla carefully manages demand to ensure it keeps exceeding supply

      2. Because if you buy a used Model S, you don’t have to wait for weeks or months before delivery, as you do if you order a new one

      3. Because Tesla battery packs have proven to hold their original capacity over time significantly better than most other EVs… notably much better than the Leaf.

  4. Tesla has increased the price in UK several times due to the strong US dollar. Obviously it effected the very limited used market too.

  5. SJC says:

    Tesla said they were aiming for 25% pack cost. That would mean an $80,000 Model S would have a battery pack cost of $20,000. Something to consider with resale pricing.