How To Determine Tesla Model S Resale Value, What Matters
There is a very interesting Facebook group called Tesla Tips and Tricks. In there the group admin Navid Gondal asked this very same question on how to determine the resale value of a used Tesla Model S. A number of group members responded with very valuable opinions.
Here is what Gondal wrote.
"Not directly a tip/trick, but a question that I would like your input on: Mileage on a Tesla car. On fossil/ICE cars the mileage plays a big part on the pricing of the car, when it comes to second hand value. I read more and more about the fact that Tesla motors will run for 1 million mile, and the batteries will last longer than the car will be driving etc. Will this mean that mileage on a Tesla might not have that much impact on the second hand price? There will be more and more second hand Tesla cars available, and it would be good to learn how to handle this situation. Please comment with your opinion."
Below are opinions from current Tesla owners, discussing what matters in determining the valuation of a Model S or other Tesla vehicles, such as Model 3 or Model X.
Used Tesla Model S Resale Value
Jonathan Rodriguez Huynh writes "I personally, would not own a Tesla without warranty so the mileage has something to say there. Unless it is a CPO with extended warranty."
"My S75D is almost 3 years old and has 28k miles and not a scratch. I paid 97k. I doubt I could get 50k on a trade for a new one," writes Mike Hamerling.
Also See This Report about Model S Resale Value: Tesla Model S only EV without a terrible resale value.
Andy Luber comments: "As someone who just purchased a used MS (refresh 2016 75D), this was an issue I had to think through - take a car with low mileage or not. For me, I went with low mileage simply because the miles on the car frame and everything else. I would definitely get a car with more miles if I was assured it was in pristine condition."
Chris Ramsey thinks that mileage is a good indicator of how worn you should expect everything in the car to be, not how long it should last. "The car will still age, and components will still wear out. The motor and battery are only part of the equation. The motors can last millions of miles, but if the rest of the car falls apart, that doesn’t mean much," he writes.
Another Model S owner Aaron Cheung also thinks mileage will still play a role in determining the resale value of a Tesla as it’s a general indication on how much the battery/components have been used over time. "It would be interesting to see if we include some type of battery report when selling second hand: i.e how has the previous owner charged their battery, what limit, how often etc." I personally think a battery report is a very good idea and can play a major factor in determining the resale valuation of not only Tesla Model S, but any present or future electric vehicles.
How Teslas Depreciate
Nathan Card wrote about his conversation on how Tesla vehicles depreciate. "I was having this conversation the other day. The way Tesla’s are depreciating now is based on the ICE model that they just aren’t worth much after 100-150k miles, but I think as we see more and more on the road with high mileage in relatively good condition and the batteries and motors are still good, we will see things change. On a used ICE with 150-200k miles or more, most of us would think that the motor or transmission would need to be replaced fairly soon and depending on the vehicle, that cost could reach into the 10’s of thousands. I think the used market will adjust as we see more and more on the road hitting 200-300k miles and still going strong. Personally, I keep vehicles until they just can’t go anymore (usually around 300k miles), but I expect that my Tesla will actually be traded in at about 300k, or given to one of my kids. I should have one graduating from college and one starting to drive about that time, then I am upgrading to the Roadster."
Back To Resale Value
Quan Nguyen writes "Warranty and hardware version matter most in Tesla resale value. For example, the same Tesla that is still within warranty period would have much better value than the ones without. Autopilot hardware 1.0 has lower resale value than AP hardware 2.0 or 2.5."
Few more opinions on Tesla depreciation and resale value.
Mats Johnson - I think technological age will play a greater role than with ICE cars. Like with phones and computers, newer EVs will have more modern features and therefore be more desirable.
Victor Skimmeland - Some will claim that mileage doesn’t matter that much but except for the drive train all other parts are equal to ICE cars where they apply. It can also be argued that earlier Teslas were not dimensioned for the heavier than expected use, and we have seen people running their cars for street racing on a daily basis. I would argue that mileage does indeed matter, especially when previous owner’s handling is unknown. It is also well known that an ICE taxi running 300k KMs can be in a better state than a private ICE car with only half the mileage, as the taxi is better maintained and also runs on a warm engine. So, making it short, mileage does matter, but depending on previous owner, maybe a little less than we used to think.
Kevin Yan - Teslas are depreciating like ICE vehicles just because people don't know any better. It will be another few years before the depreciation rates are properly adjusted to account for the increased lifespan of Teslas. I have 135k miles on my S and it drives like new. Once cars hit 300-400k miles and people see them still running like new, the depreciation rates might change.
David J. Vakil - I agree with Kevin Yan and Nathan Card. I suspect Teslas depreciate much faster than they should. I'm guessing average buyers are coming from an ICE car and they don't realize that electric miles are not as damaging/consuming to Teslas as are engine miles to ICE cars. While Teslas hold value somewhat better than ICE cars, I still suspect they are under-valued. Knowing what I know now, if I were in the market for a second Tesla, I would strongly consider a used model S/3/X with HW 2 (i.e. upgradable computer and 8 cameras) with lots of miles. I bet that's the best bang for the buck, in terms of future-proofing the car and getting the most future miles/value. But I also suspect the market will figure this out in the next few years as used Model 3's hit the market.
Davis Van Tilburg - My 2013 Model S P85 is a Real Estate house showing machine! We have almost 120,000 Miles. Reseal value seems to be depreciating similar to my ICE cars and KBB is even lower than actual market value. I think it would take a huge mindset shift for the values to keep steady with rising mileage, at least in USA where we are.
Eyvind E. Spangen - Remember that a car has got lots of other parts than the drivetrain. Suspension and brakes, interior, paint, general wear and tear. Of course some high mileage cars show very few signs of it, but in general, higher mileage means more wear. And, I have had ICE cars with way beyond 500kkm and absolutely no issues.
If you are an expert on this question, please share your opinion in the comments section below what you think best determines the valuation of a used Tesla Model S or any other Tesla model.