One of the most under-appreciated factor while analyzing resale value of cars is the demand versus supply equation. If the demand for a particular model stays high, it’s resale value will typically be better than cars that have lower demand.
For a really long time Tesla’s resale value stayed ahead of its competition as demand stayed on the higher end. Resale value was also helped by plenty of other factors such as design, technology, innovator tag, brand name, and slow battery degradation.
All these factors still help Tesla Model S stay ahead of its rivals on the ‘who holds value better’ race.
According to a December 2018 Autolist study, Tesla Model S value declined on average by 27% after 50,000 miles, 9% better than the segment average.
Based on vehicle listings from January 1, 2012, through November 5, 2018, on Autolist.com, the value of a Model S with 50,000 miles on it had declined on average 27 percent from its original list price. –
Depreciation Comparison after 50,000 miles: Autolist
Tesla Model S: 28%
Lexus LS 460: ~32%
Mercedes S-class: ~36%
Porsche Panamera: ~37%
BMW 7 Series: 40%
Audi A8: 40+%
Jaguar XJ: 41%
Model S holding its ground despite a steady increase in used car inventory
The above average performance of Tesla Model S in the used car market must have been affected by the steady flow of inventory into the used car market. After all, if there were more cars to sell this year than last year, the price should drop a bit more isn’t it. Demand vs Supply.
But Tesla Model S lost just one percent of it’s holding power between 2016 and 2018. According to an
In December 2018, the average value decline improved to 27%. Tesla sold 29,421 Model S in the United States in 2016, 27,060 Model S in 2017 and more than 23,000 units this year.
The addition of more than 75,000 new Model S cars didn’t really affect Tesla Model S value holding power in the resale market.
Tesla Model S Resale Value: The impact of Tesla’s $2000 price cut
On January 2nd 2019, Tesla announced that it will reduce the price of Tesla Model S, Model X
“we are taking steps to partially absorb the reduction of the federal EV tax credit (which, as of January 1st, dropped from $7,500 to $3,750). Starting today, we are reducing the price of Model S, Model X
and Model 3 vehicles in the U.S. by $2,000. ” – Tesla
Tesla’s decision to drop the price of Model S in the United States will definitely have an impact on used Tesla Model S that’s on sale today. But the effect will be temporary and the average value decline percentage will get back to normal levels after 2019 Models start hitting the used car market.
Tesla Model S was supply constrained in 2018. The electric car maker announced in early 2018 that the company will only build 100,000 Model S and X for the year. The production cap stifled the number of Tesla Model S that entered the used Tesla Model S market in 2018, turning the demand-supply equation in its favor.
In another few months, we will know if Tesla is going to leave the Model S and Model X production cap in place to help the company conquer the world with Model 3. The odds are quite high for Tesla to keep the cap in place for 2019.
Even if Tesla allocates more production capacity for Tesla Model S this year, it won’t be far away from 100,000.
Factors that will help Tesla Model S Resale Value in 2019
Tesla Model S Range: Catch me if you can
The Tesla Model S100 D still remains the electric vehicle with the longest range in the world. At an EPA rated 335 miles range, Model S 100D beats the 310 miles range offered by its younger sibling Model 3
As long as the Model S offers the longest range per charge, it’s value will stay a step ahead of its peers.
Model S Battery: Revolutionary Road
When it comes to batteries, you can divide the world into two groups; Tesla on the one side and every body else on the other side.
Data collected by 419 Tesla owners across US, Europe
Tesla batteries lose just 10 percent of their power after 160,000 miles. Projections show that most Tesla vehicles will retain 90% capacity after 185,000 miles and 80% capacity after 500,000 miles.
Model S User Stories: The Crowded Room
Tesla Model S has been on the road for nearly six years and it has a growing list of owners who accumulated hundreds of thousands of miles.
Tesloop’s original Model S 90D, dubbed eHawk, has surpassed 400,000 miles making it the Tesla with the highest reported mileage in the world.
Here is a small list of Tesla Model S owners who drove more than 100,000 miles.
Tesla Supercharger and Destination Charging Network: The Departed
No one talks about the influence of Tesla’s growing supercharging and destination charging network on Tesla’s resale value.
If you are planning to buy a used EV, which company will you pick; The one with 1,386 supercharging stations and 11,000 destination charging locations around the world or the one that’s promising you an equally strong network in five years?