Is the market tired of the Model S? Is Tesla neglecting its signature model?
As we reported, the Tesla Model 3 is retaining its resale value better than all other electric vehicles – and much better than conventional compact cars. Resale value for Tesla Model X SUV is also holding up. But there are signs that the value of Tesla’s Model S is starting to wane.
Determining these values is an inexact science. But looking back at August 2018 CarGurus data, as reported by TheStreet.com, the value of a Model S dropped by 1.25 percent over the previous 30 days and 2.7 percent in the previous three months.
That was last summer. And today? CarGurus data now shows the value of a Model S falling by 4.28 percent in the last 30 days, and 9.93 percent in the last three months.
CarGurus data from Jan. 25, 2019
It’s not ideal to compare luxury vehicles other segments because higher-priced cars usually show higher depreciation than budget models. But the only other long-range EV currently on the market is the Chevrolet Bolt.
While a 2017 Chevy Bolt lost 6.52 percent of its value in the past year, a 2017 Model S’s value dropped 20.97 percent. Bear in mind this is not a decrease from its original purchase price but a drop in the value of these model-year cars from a year ago compared to today. All of these numbers should be considered directional – and not precise indicators.
As recently as December 2018, a study by Loup Ventures showed that a Model S only lost about 28 percent of its value after 50,000 miles. That amount mileage would typically be found in a 2013 Model S. But the 28-percent figure does not bear out from the latest CarGurus data, which shows nearly a 21 percent drop in the first year alone.
Again, it’s tricky business reading these tea leaves. But these factors are relevant:
- The Model S looks pretty much the same as it did when introduced in 2012. Tesla future-proofs its cars via over-the-air updates – but styling updates also matter. Sales of the Model S in 2018 were below the previous two years – the first drop in annual numbers. The Prius Prime and Model X outsold the S in 2018.
- All the buzz from Tesla these days is about the Model 3. That’s likely to continue in 2019. Is the Model 3 cannibalizing Model S sales? Regardless, new competition from Jaguar, Audi, and others could impact Model S sales.
- Tesla no longer benefits from the full $7,500 tax credit. The credit amount will continue to diminish throughout 2019.