Are Used Tesla Vehicles Appreciating in Value?
— The Kilowatts (@klwtts) July 23, 2021
We are seeing cases of Tesla offering more for trade in vehicles for the Tesla Model 3 and Model Y. Does this mean that Tesla vehicles are an appreciating asset and that over time, you will be able to sell for more than you bought for? I think it's possible we are seeing one of the first appreciating assets for a car that isn't an antique or collectors edition vehicle.
For perspective, I currently have a Model 3 on order and I put in my 2009 Honda Fit as a trade in. Tesla came back and offered $2,700 for it. I bought it for $17,000. I don't think it's worth $2,700, but more around $6,000. But that's still quite a bit less than what I paid for it.
Here's a case of a Tesla Model Y Long Range (2020) with 5,309 miles, with full self-driving selling for over $80,000 barely used (this is about $10,000 more than a new Model Y of the same type):
Um wut the frunk! pic.twitter.com/j1HnQirhzx
— Weed From Mars (@mars_weed) July 24, 2021
Tesla Prices are Increasing Overall
Due to strong demand, the price of all Tesla vehicles are increasing. This is one reason I think that used Tesla vehicles are appreciating in value. Tesla vehicles are just in high demand and that is increasing price all around, whether a trade in to Tesla, a new car sold by Tesla, or selling to a private party. Tesla currently can't keep up with demand.
BREAKING: Tesla has once again increased the price of the US Model Y and Model 3. Both the Model 3/Y Long Range get $1,000 price increases.
• Model Y LR now starts at $53,990
• Model 3 LR now starts at $49,990 pic.twitter.com/5E1e0o1dtP
— Sawyer Merritt (@SawyerMerritt) July 23, 2021
Tesla vehicles are going to continue to increase in price until Tesla can catch up with demand from customers. Right now, there are more people who want a Tesla than there are Tesla vehicles available.
A used Tesla may even cost more than a new one because one can get a used Tesla immediately and not have to wait 3 months or more per Tesla's website. I think that's another factor in used Tesla vehicles going up in price.
Related News: Elon Musk Discusses Chevy Bolt Fires.
What will Tesla Prices Be in the Future?
One of the other things, besides strong demand, that is causing the rise of price for Tesla vehicles is software services, and that means FSD (full self-driving). This is the first major piece of software that Tesla is offering and as full self-driving approaches level and level 5, the value of a Tesla vehicles is going to increase drastically.
Elon Musk even stated that when a car can drive itself, it should add up to 10 times the value of the vehicle. The reason Elon Musk believes this is because he believes that a robotaxi should be able to generate around $30,000 for the owner.
I think we are going to see the price of Tesla vehicles continue to go up - and even more than they are now as full self-driving becomes more and more of a reality. I wouldn't be surprised to see Model 3 and Model Y versions selling for an additional 10-20% per year as full self-driving improves. That means in 5 years, we could see the Model 3 and Model Y selling for double what they are now. That would mean around a $70,000 base Model 3 version and an $80,000 base Model Y version.
What do you think about the price of Tesla vehicles increasing? Is this because of strong demand? Is it because full self-driving will be able to make people money in the future?
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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter, Facebook, LinkedIn and Instagram to stay in touch and follow his Tesla news coverage on Torque News.