Report: The Tesla Model S Depreciates Only 28% Over The First 50,000 Miles

SEP 14 2016 BY MARK KANE 46

Autolist reports an unprecedented high residual value for the Tesla Model S, based on data on used car sales from January 1, 2012 to August 31, 2016.

Tesla Model S used offers retail much higher than its peers

Tesla Model S used offers retail much higher than its peers

Tesla residuals are not only the highest among other plug-ins, but is highest for all cars in its class, regardless of the powertrain.

Estimated depreciation rate for Model S versus mileage stands at:

  • 6% after 10,000 miles
  • 12% after 20,000 miles
  • 18% after 30,000 miles
  • 23% after 40,000 miles
  • 28% after 50,000 miles
  • 32% after 60,000 miles
  • 37% after 70,000 miles
  • 41% after 80,000 miles
  • 44% after 90,000 miles
  • 48% after 100,000 miles

Selling 50,000 miles Model S for 72% of the  MSRP sounds impressive, especially compared to about 60% for other models from the class.

The Nissan LEAF and BMW i3 at 50k rated at about -59% depreciation, which means a residual value of 41%, while Chevrolet Volt still holds ~55%, but still behind the industry average.

Tesla Model S value (source: Autolist)

Tesla Model S value (source: Autolist)

source: Autolist

Categories: Tesla

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46 Comments on "Report: The Tesla Model S Depreciates Only 28% Over The First 50,000 Miles"

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SparkEV-Fiat500-Leased - M3 Reserved - Bolt- TBD

That’s crazy good and hopefully will maintain this as inventory rises as Model 3 introduced.

The other EVs are getting crushed on resales on the wholesale market to date.

Bolt may be first non-Tesla to reverse trend if performance is robust.

I do wonder how the tax credit factors in. Basically every EV sells for at least $7500 less than its sticker. So if the resale value at year X is compared to the MSRP then it’ll never look good.

They all get the tax credit, and in the competitor’s case, it’s a much higher percentage of MSRP than Model S. If anything, factoring out the tax credit would increase Model S gap from the other EVs.

Actually, reading the fine print, they used the precise MSRP, not what the first owner actually paid. The tax credit was not included.

And, since the tax credit is only for the first owner, it has no bearing on resale value.

SparkEV-Fiat500-Leased… said:

“The other EVs are getting crushed on resales on the wholesale market to date.

“Bolt may be first non-Tesla to reverse trend if performance is robust.”

I think so, yes. Since GM has pretty clearly signaled it doesn’t plan to make all that many Bolts per year, and since the Bolt looks to be a compelling PEV (Plug-in EV), I believe that demand will be much higher than supply. That will likely drive up resale value, just as it has for the Tesla Roadster and Model S.

Bolt will loose 25% of value on leaving dealer slot.

Because of 7,5k federal tax grant.

Nobody will wont to buy the car for say 34k’s no matter the state.

Leasing gets You below 30k car in any situation.

OK. Maybe if You are not paying any taxes in USA 😀 but even that will not influence resale value for USA.

You’re not making any sense. If they don’t sell at a given price, then the price will be lowered. What you’re saying amounts to claiming that used Bolts will just sit around collecting dust, with nobody at all buying one.

Not everything in the market works strictly according to basic supply and demand, but this certainly does.

It’s called RANGE, folks!!!

The other EVs don’t hold resale value because they are 80-100 mile EVs! Everybody knows that longer-range versions are coming out every few years, either from the same OEM, or from a different one.

One of the primary reasons that Model S holds resale value is because it starts out with over 200 miles range and a respectable warranty.

I expect that the Bolt will hold resale value better than the other non-Tesla EVs because of the range. If the Volt performance is anything to go by, the Bolt will still have approx. 200 miles of range after 50k miles, at least.

%’s aren’t accurate nor mean anything.

Better said: Tesla’s depreciate the least out of any car.

That may be because Tesla essentially controls their pricing for CPO resale units. They have no dealers to feed and as stated above for some time the buyback / trade in price was set by Musk not to be any less than (??insert dollar amount here$)

In the past, the factors you mention were largely or entirely irrelevant. The fact that Tesla cars retain a very high percentage of their retail value was widely known long before Tesla created its CPO (Certified Pre-Owned) program, when Tesla was never involved with the resale. And as I noted above, Tesla’s residual value guarantee probably hasn’t affected actual value at all, because that guarantee has reportedly never forced Tesla to pay above market price for a used car. Now, going forward, Tesla’s CPO program may indeed force used car prices upward. Part of the reason used Teslas were priced so high is that demand for new Teslas exceeded supply. But indications are that supply is now pretty close to demand for the Model S, so that factor should be less in the future. However, demand for the Model X still exceeds supply, as most of the pre-orders have yet to be fulfilled. (According to a recent comment, most — something like 2/3 to 3/4 — of the remaining MX reservation holders are waiting for lower trim options to become available before converting their reservation to an order. I don’t know if that assertion is true, but it seems to… Read more »

They control their pricing because they limit supply. The limit supply because they can’t produce them fast enough! Also, it doesn’t hurt that they have never really changed body styles. Your neighbor won’t know it’s used.

Yes, kudos to Tesla for bucking the trend of making styling changes every year for the purpose of planned obsolescence, and not for any practical engineering reason, as other auto makers do. I don’t think we’ve seen that since the classic VW Beetle.

Just one of the many reasons that Tesla Motors has earned our respect and admiration… and other auto makers have not.

They ended that program because it turns out not to be necessary.

Also, Tesla CPO is not the only way to get a used Tesla. A few people get Teslas from used car dealers, but several come from direct owner-to-owner online resales (Craig’s List, Ebay, etc.).

“Tesla depreciation is not only the highest among other plug-ins, but is highest for all cars in its class, regardless of the powertrain.”

Shouldn’t “lowest” be substituted for “highest” in the above sentence?

Is the Model S residual value artificially high because until recently, Tesla essentially guaranteed a high residual value by agreeing to buy used Model S’s at certain high prices? If so, comparing Model S with EV residual values, in general, is very flawed.

Were EV residual values adjusted to consider that federal, state, and local incentives effectively reduced new EV prices to significantly below MSRP? If not, the actual EV residual values are considerably higher than indicated.

Yes, good catch…that should say residuals, not depreciation. /fixed

Indeed. The article should either say depreciation is the lowest, or that retained value is the highest.

alohart asked:

“Is the Model S residual value artificially high because until recently, Tesla essentially guaranteed a high residual value by agreeing to buy used Model S’s at certain high prices?”

No. The residual value is that high because that’s what the used car market will bear. I think it has been reported that Tesla has never been compelled by its guarantee to pay higher than market price, so that hasn’t actually affected residual value.

At least, that’s my common-sense understanding. I’m not a “financial guy”.

Used 2012 Tesla Model S
$44,000 39,294 miles

Southern California has lots of them for around $50,000, that seems like more than 28%
depreciation for 50,000 miles.

The guaranteed buyback is at only 50% at three years, which is too low to be propping up resale. MINIs also have high resale values, which is partially explained by a long lead time (6 weeks) that makes buying new a pain. Teslas also have long lead times, but that can’t be the whole story. I suspect there are lots of buyers out there who can’t afford a new Tesla but can barely afford a used one.

That could be, there were more than 10 Model S with less than 50,000 miles for around $50,000 in Southern California on cars.com

This is BS. No mention of where they are getting their SOLD pricing data from.

Where are they getting their used Tesla values from – asking prices? I don’t think it’s SOLD data. Looking at the survey it doesn’t say where they got their data points.

A look at Manheim auction prices shows a different story and one that is similar to other luxury vehicles. Most of these cars are in ABOVE average condition.

Sold cars at Auction –

2013 Model S
08/16/16 Manheim Ohio Lease $50,750 19,291
08/17/16 Manheim California Regular $53,750 16,673
08/17/16 Manheim San Francisco Bay Lease $36,500 75,385
08/18/16 Manheim Palm Beach Lease $46,200 18,779
08/23/16 Manheim Orlando Regular $46,000 23,564
08/23/16 Manheim Portland Regular $44,750 38,618
08/24/16 Manheim San Francisco Bay Lease $41,750 64,214
08/26/16 Manheim Pennsylvania Regular $40,300 57,698 Avg
08/31/16 Manheim San Francisco Bay Lease $44,750 41,088
09/01/16 Manheim Atlanta Lease $43,800 61,776 Avg
09/06/16 Manheim St Louis Regular $45,200 19,939 Avg
09/08/16 Manheim Cincinnati Regular $43,000 35,724 Avg

2014 Model S 85
05/19/16 Manheim Atlanta Regular $62,500 2,036
07/05/16 Manheim Nevada Regular $57,900 20,877
07/14/16 Manheim Texas Hobby Regular $54,700 17,629
07/21/16 Manheim Tampa Regular $60,200 12,463
08/03/16 Manheim Milwaukee Lease $52,500 36,019
08/30/16 Manheim Riverside Regular $51,000 27,224

Holy smokes!!

How can I get one of these deals?!

I’d buy any of these immediately for the listed prices if I could find one!

I’ve been keeping feelers out for the better part of a year for a used 85 in the $40k range. They are like unicorns.

If you are friends with a licensed dealer who can take you to one of the auctions, you can buy one at this price. Just go to one of those small dealers and offer to pay him a couple hundred dollars to take you. The prices tom911 listed are wholesale prices so his post is BS.
Here is the link to the worlds largest automobile auction company:
https://www.manheim.com/

Of course they are Wholesale prices (auction prices). The prices the cars SOLD for to auto dealers/brokers and others at MANHEIM!

But that is not what the article is about – the article is about what the owners paid, not wholesale prices! Those people are going to turn around and sell the car to a new owner at a markup. That’s what the article is about.

Contact a broker – he can buy these cars at auction. Remember there’s no owner history on auction cars and I would not own a Model X without a warranty – even if it was priced in the 40’s.

tom — Hopefully your manheim account isn’t also tom911, since you don’t seem to mind breaking your manheim terms of access:

“The materials on Manheim.com are the property of Manheim Auctions, Inc. or its licensors, and are protected by U.S. copyright laws, international conventions and other copyright laws. Except as explicitly provided in this agreement, you may not distribute, transmit, display, reproduce, modify, create derivative works from, or otherwise exploit any of the materials on Manheim.com.”

AFTER the Federal subsidy is counted, my 12 Leaf depreciated about 75% in 3 years, 26k miles.

Glad it was a lease.

Another flawed analysis. Post credit initial price should be used. This makes a big difference with the lower end of the price range, as the credit is a larger % of the MSRP on the lower end cars. It makes the depreciation of cars with full credit and MSRP around 30k-40k look worse than they are. Though they are still not great at retaining value, they aren’t as bad as it looks.

+1 That was exactly the first thing I though when I read the story.

The numbers vs. gas cars are fine, but the numbers vs. other EV’s are skewed because of both state and federal tax incentives.

That’s about what a normal car depreciates once you drive it off the lot.
Good for Tesla and clearly a selling point just as a high rate of depreciation is a point against buying a car.

The numbers say they are based on MSRP, so I am wondering if the other cars in the class actually sell for full price like Tesla. I regularly see ads for $40k vehicles offering $10k off MSRP, so depreciation off the MSRP would not be comparable since no one would actually pay MSRP.

Selling price of any vehicle(except Tesla) is different from location to location, month to month, buyer’s financial qualification … Only MSRP is the same doesn’t matter where you are.

Yep, in order to make a meaningful comparison, you have to have a standard by which all may be compared.

I see two factors here that are skewing the results.

1. The rebate is 7500 or more, which will affect a cheaper vehicle’s depreciation percentage more than it will affect an expensive vehicle because the used car price takes the rebate into account.

2. The Leaf had substantial price drop, which of course lowers the used car prices for all Leafs (Leaves?).

Once the survey includes vehicles that were purchased at the lower price, the depreciation will reduce.

I don’t see your point:

1) The tax credit has nothing to do with resale – only the first owner of the vehicle gets the tax credit.

2) They used MSRP, so if the MSRP dropped, then that is what they used for whatever percentage were sold at the lower MSRP (as far as I can tell).

They should calculate depreciation from sales price, not MSRP. Only Tesla buyers pay MSRP. Huge difference.

“They should calculate depreciation from sales price, not MSRP. Only Tesla buyers pay MSRP. Huge difference.”

Sale price isn’t the same for different buyers.

One buyer has great credit, prequalified for car loan, has trade in and good negotiation skill.

The other buyer has poor credit score, couldn’t any decent loan from any bank or credit union, has no trade in and has no negotiation skill.

Which buyer will get lower price of the same car ?

Now, one in Midwest and one in New York city which one should get lower price.

How about time ? Buyer of the first car of the year vs the end of the year ? Which one should get lower price ?

MSRP is a constant value for full year anywhere in the country, at least in lower 48 states.

Interesting news, and perfectly timed to also be irrelevant. Model S is unique and will hold its price very well as long as it continues to have zero close competition. The same goes for Model X, only even more so. But look at what the Bolt is going to do to second hand value of 100-milers. And consider what Model 3 itself may do to Model S second hand value once it can actually be bought at half the price (but 90% of the car – or, for me, actually a better car in all likelihood). Over here in Norway the Model S competes on price with the BMW 5-Series and similar – not so much with cars like MB S-class. That’s because of our very high car taxes. The rich seem to above all want to show that they are rich, so a Tesla is simply too cheap, regardless how good it may be. (This also explains why Model S doesn’t compete with McLaren and Ferrari anywhere – even though most owners are fifty-plus fat cats who can’t exploit their car’s performance if they wanted to; and they don’t want to.) It is naive to believe Tesla will remain… Read more »

“A lease is a bet against a professional counterpart that the car will depreciate more than they think. You could, but you are unlikely to, be right.”

That’s true when a lease reflects economic reality. But in the U.S., some auto manufacturers are offering lease rates that are much lower than economic reality would suggest. This helps BMW increase the number of i3 leases, for example. This might not actually mean that BMW is losing money on i3 leases because of the valuable CARB credits it receives for each i3 leased.

Any more news on the Bolt?

It’d because Teslas are road jewelry, like Harleys used be. Collectibles, status indicators for hip, with it early adopters. That’s all.

It’s a good thing that the same dollars a buyer saves via low depreciation of their road jewelry are fungible, and can be spent on things other than collectibles, or status indicators for the hip. Otherwise, your argument might mean that this article doesn’t hold water.

Tesla bashers have been claiming since the Model S debuted that only early adopters would buy it, and that the demand would soon be exhausted.

Fortunately, reality refuses to conform to their perpetually negative predictions. A glance at InsideEVs’ Monthly Plug-in Sales Scorecard shows quite clearly an ongoing, substantial year-on-year increase in Model S sales.

Hmmm, I picked up a loaded P85+ CPO with 44K miles for less than half the original sticker (and no Carfax issues or anything like that). Heck, it is even less than half AFTER I take off a $7500 rebate and a $2500 CA state rebate. Now admittedly, loaded cars depreciate at a greater rate, but still.

Interestingly, this is one of the things that prompted me to go CPO. Just like the “+” suspension was overpriced in its day, so are things like “ludicrous mode” today.

No longer true, the Model X loses about 30% in the first year.. Maybe update your numbers, because buying a Tesla, while cool, sure doesn’t seem very fiscally responsible!