Craving to trade in my PIP for a Tesla Model S

If they really build as many of them as they plan on; eventually there should be a healthy used market. Maybe in 3 to 5 years there will be used Model S cars for around $40K.

It's fun to dream, but meanwhile I'll enjoy my PiP very much ;-)

 

Since Elon guaranteed something like $43k for a three year old Model S, I think you will probably find that to be the bottom price point.

 

Excellent point. But what about a 4 year old one? Hehee

 

or a salvage title

 

Well, in about 4 years we should start seeing the third gen, $30,000 model.

 

You make a good point, and may be right. However, to make the counter point:

I think Supply/Demand is the biggest driver of short-term depreciation vs. quality/reliability and brand. And if we look at the psychology of the current purchasers of the Model S; it could lead one to believe there will be a decent supply in 3 to 5 years. My logic as that most current buyers are early adopters and well heeled auto fans. In my experience; these types of buyers quite often trade in or sell their car after 2 to 4 years as they are easily bored. I also think that after the reality of range anxiety kicks in; this would also impact the number of sellers.

What Tesla might try to do is buy up these cars as much as possible in order to artificially maintain their high premium image with the assumption that they can clean them up and sell them at a small profit. This could become a pretty costly project for them though, and I dont think there is any precident for this. If instead a number of private sales start occurring, it wouldn't be surprising to see a $75K new S going for $40K after 4 years on the road and say 80,000 miles.

That's just my opinion though. It's very hard to predict the future.

As far as the price point of the PiP; I still feel very good about my $32K base. I calculated that I would get back the $10K price premium over other cars I was looking at in about 5 years via saved energy costs. In another 5 I'll save another $6000. The base PiP also has many more options than the $22K cars; and to me seems quite luxurious. Meanwhile I'm avoiding burning 375 gallons of gas each of those years and replacing it with clean solar charging...which makes conversations with my 6 year old easier.

 

I disagree. Since the Tesla roadster came out, there are now some 10 different EV models available. Most of them in CA only. Might this change in the future? Possibly. But Toyota and Fiat have no plans to offer their EVs outside CA at all. Based on low sales of the PiP, Volt, Leaf, and Mitsubishi iMiev, there is little demand for plugins. Couple that with CARB requirements to sell EVs in CA in order to do business in the state and you've got plenty of supply. Evidence is in the $18k worth of rebates on the Rav4EV. It costs the same as a PiP! The Fiat 500e leases for $199 a month. That's the same price for the ICE version that's costs >$10k less. Companies are losing money making these things. That's why the Model S is a luxury car and not a family mid size sedan.

I look forward to picking up a Model S for $30k in 3 years. This is why Musk has to guarantee 43% resale in 3 years. He's running out of early adopters who don't care.

 

I can't think of any car that I would pay 40k for with 80k miles on it

 

Tesla is definitely a dream car.

 

They don't cost as much either. There are Leafs that have been driven across this country and Europe. It's not impossible, it just takes extra planning, same for a Model S. Airbags and power windows used to be luxury amenities. Now they are ubiquitous. 265 mile range won't be exclusive to the Model S for long. The Volt and Leaf have already increased their range on their 2013 model with simple tweaks and software.

For my sake, I hope you're wrong. I really want a Model S.

 

Most of you probably missed Elons Friday afternoon conference call, but the gist if it is, there is a "loaner" Model S fleet, it's the highest end "Performance Plus Model S" they make (which was recently announced). These will be available and brought to the owner while any work is done on their Model S.

In addition, if you like the loaner car better than your current Model S, you can keep it... The loaners value is calculated at $1/mile and %1 per month (this is deducted from the list price of the performance plus 85KW loaner, which is $115K). The value for your used Model S is not clear, but they will likely use the same calculation.

Elon stated he wants the loaner fleet to be turned every 2-3 months, so that they don't become "beater boxes" as typical dealer loaner cars often become.

He also announced the 1 year "service" is now optional, and missing it will not invalidate your battery warranty. Also, the battery pack will be warranted for ANY issue, other than intentional abuse (he mentioned taking a blow torch to it, or is disassembling it as exclusions). This means if you manage to somehow "brick" your pack, Tesla will own it.

I'm afraid your all way off on resale values, as Tesla fully intends to keep every Model S owner as a lifetime customer, and the resale market will be tightly controlled by them. I can't see any reason to ever sell my Model S, when it can be upgraded to the latest Model with a swap in a few years (at a cost sure), but many will just keep what they have and not upgrade, until there is a significant reason to do so. FYI, the Gen 3 release in 2016/2017 is more likely to be in the $40K range

Announcement link:
(Not able to post link, it is on the teslamotors website)
www teslamotors com/blog/creating-world’s-best-service-and-warranty-program-0

 

I think all of us love the Model S, but few of us can afford it new as it is priced today; so we are speculating on future options.

I think a $75K new car that is 4 years old with high mileage (say 80K) for around $40K is reasonable depreciation. Some owners like you are enthusiasts who will keep your car, but I'm guessing many many thousands will be sold at 2 to 4 years old by folks who bought it as more of a novelty. At 20,000 per year as of now, they will likely have around 100,000 on the road by 4 years from now. It seems highly unlikely Tesla will be able to buy up every used one that comes on the market. Many car companies have tried to do this (I'm looking at you Ferrari); but it never works out. Elon is pretty amazing though; so who knows what he has up his sleeve.

Enjoy your Tesla, and rest assured we are all Jealous

Full Disclosure: I own a few Model S's worth of TSLA stock. I listened intently to the whole call on Friday.

 

As a quick sanity check I just did a KBB lookup for a 4 year old Mercedes S550 which I believe sold for about $85K new. At 4 years and 80K miles the private party value is estimated at $35,515 in excellent condition. Dealer retail would be $38,715.

Expensive cars devalue quickly - heck; all cars devalue quickly. If this does not happen with the Tesla it will be unprecedented.

 

There is no other car to compare the Model S with, it's the first in its class. EVs will not, and should not depreciate the way ICE cars will. There's an 8 year unlimited mileage battery pack on my 85KW pack.. The other wear items are tires & brakes, but the brakes are hardly used because of the 1 pedal driving (slow down by removing foot from accelerator), so the brakes may never need to be redone in a Model S.

The only things that can bring down the resale value of a Model S are mostly from Tesla themselves, if they announce a 500 mile battery pack, that will lower the value somewhat, but since we now have the "trade up" program, maybe not as much as you might think. Of course if another manufacturer decides to actually compete with Tesla that could affect resale value as well, but the majors are years away from that and really not interested (Nissan is at least serious, but not in the same range or vehicle class), though Teslas success could affect their future interest

Btw, my car was $90K, not $75K. Most Model S in wild to date have been the 85KW pack version, mine is non-performance (0-60 in 5.6S vs 4.4S is fast enough for me), I have every other option other than the rear seats and paint protection film.

BTW, these people who will "sell their Model S in 2-4 years", what would they replace it with? Likely another Tesla, so they'd be trading it to Tesla, who will essentially be the "Market Maker" for "Certified Pre-owned" sales...
They certainly wont go back to driving an ICE vehicle.

Also it's a bad assumption to assume we all will put 20,000 miles/year on our cars, I'm at a little over 1,100 month so far. My 4 year old Model S is likely to have about 50K miles on it, with at least another 100K it can be driven over the next 8 years (12 year pack life estimated)

 

Good points. You may be right. I'll try to remember to check back with you in 4 years.

Your Model S sounds pretty much exactly like the one I spec'd out on the Tesla site last week....and about once per month, hehee. Except I select Red....I love that red. Hey, a guys gotta dream.

p.s. I wish I could afford to buy your PiP. My wife is monopolizing ours and I have to take it out at night! I was seriously looking at plane tickets to Boston. Unfortunately two PiPs is a bit much; so I'll just have to wait my turn.

 

Well, I'm looking at the Model S as the last car I'm ever going to buy, and it seems to ring true now more than ever, since for far less than buying another high end car I could "trade up" to Teslas latest model, so they will create a very loyal customer base.

I decided to just renew the registration on the Advanced PiP ($50/2 years), and get an inspection sticker ($29 yearly). There's no rush to sell it, I can wait it out until I find a buyer, or gas shoots up again and it's value is realized.