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Which will have better resale - standard or large battery?

Which will have better resale - standard or large battery?

I have two 3/31 model 3 reservations but have decided I only want one -the AWD version. Since that won't be available for a while, I plan to buy a RWD one now, and sell it when the AWD is available. As it will only be used short term, I want to make the right decision for resale on the initial battery choice. I would like to buy the large battery version since I can get it two months earlier, but it seems to me that there will be a stronger resale market for the less expensive version. Any thoughts?

CV63 | August 5, 2017

My .02 is if it's a short term resale, the standard battery with the premium package might be a sweet spot. If you hold it for more than 2 years the standard battery will seem anemic as the technology advances.

Alvin27 | August 5, 2017

Tough call - the batteries will drop in price as more Gigafactories come online. Initially, the M3's at current price will command top dollar. It is a matter of timing the market. Good luck.

alias4me | August 5, 2017

I can just see the IRS combing through this forum so it can demand the $7500 rebates back. :) I think/hope I am kidding.

greg | August 5, 2017

I'd go for Larger battery, on the thought that larger batteries mile for mile [compared to a standard battery Model 3 with the SAME mileage] will have generally had less "charge cycles" clocked up on them.

And after all, that is what the mileage thing is basically all about on an EV isn't it? Telling the buyer how much life the battery has in it as the power train itself has a warranty that will be the same for standard or longer range cars.

So I'd plan now, but wait until you get invited to configure, then look around and see what others are saying about their model 3s and options and battery sizes and have a look at the resale values of any model 3s and see whats selling wit hthe biggest margin compared to the original price.

Then make your call.

If you time it right you might be able to offload the RWD Model 3 for close to what you paid for it, making your transitional costs nearly zero (well you'd pay 2 sets of delivery fees at least if nothing else and sales tax on both depending where you live) anyway.

And be careful with your Federal Tax credit if you sell your RWD car too soon.

robert.s.bjekich | August 5, 2017

Large battery. People who are unfamiliar with Tesla have range anxiety and will demand the larger battery.

Bighorn | August 5, 2017

There is no minimum holding period for claiming the federal tax credit if you purchase the car for personal use.

Alvin27 | August 5, 2017

I am thinking if you are going to flip the M3 immediately ... brand-new and not used ... go for the fully loaded M3. If you want to use it for a while then exercise caution in selecting your options.

GetLib | August 5, 2017

Large will hold value better because standard battery resale will compete with bolt/Leaf2 buyers - and those cars will still have $7500 incentive. No competition for 300+ range vehicle during resale.

Alvin27 | August 5, 2017

@larsso - Dude flipping is not considered a good thing in this forum. 99.9% of the folks are praying to get a M3 with a tax credit asap. There is no sympathy for flippers in the forum.

Ross1 | August 6, 2017

Find a potential buyer first, they might specify it for you. I am thinking of a small taxi operator currently running Priuses

Shock | August 6, 2017

In other words, on the used market, will the car that costs $9000 more now be worth at least $9000 more used? And the answer is certainly no. It will be worth more because it has more range but it won't be worth at least $9000 more.

The Real C_C | August 6, 2017

We're watching you larsso...

But Steve in accounting says he'll pay you $1,500 over msrp for a standard battery, Premium package, 19" wheels, but only if it's red.

gavinmcc | August 6, 2017

I agree with Shock...the long range will be worth more, and will be a bit easier to sell, but doubtful it will fetch 9,000 more used resale than the standard battery...

And cars are becoming more like computers...new tech and abilities at every update...but this means a certain immediate obsolescence that is new when it comes to cars (yes when a car model gets a form/style change it makes the previous year suddenly "old", but historically that is every 4 or 5 years or more...electric cars will/can be updated every year with new tech and advances in batteries, motors, AP, 0 to 60 speed; etc)

Cool, and kinda bad if you are the type that needs the fastest, newest computer....

G

Rutrow | August 6, 2017

From an Electrek article (1/20/17).

"NVIDIA describes the Drive PX 2 as “the world’s first AI supercomputer for self-driving cars”. Its computing power is comparable to about 150 MacBook Pros and the company estimates that one can support a level 4 self-driving system while two would be necessary for a fully self-driving level 5 vehicle, but Tesla is aiming for its software to be efficient enough to run level 5 on one.

But if that doesn’t work out, the company made sure that it is relatively easily accessible so that it can be swapped.

It is mounted on the passenger side of the dashboard right above the outer panel of the glove box. By removing it, it can be accessed and technically swapped for a more powerful computer if the need ever arise."

So you'll be able to get the fastest, newest computer... when it comes out. I don't know if you'll have to camp out front of Tesla service centers or NVIDA HQs if you want get one before everyone else.

Mozart | August 6, 2017

Isn't the long range battery the only one available now?

weluvm3 | August 6, 2017

I've got a lot of car nuts where I work, and I've already been offered full retail (less rebate) for whatever I purchase if I don't like it. The guy in question likes collecting fast cars, so he'd probably prefer the bigger battery, but he'd be happy with whatever I chose to buy.

That said, he'd probably have to pry the key cards out of my cold, dead fingers. I fully intend to hang onto my Tesla until it is a just pile of rust in my driveway.

But, to answer the Op's question: in general, options tend to depreciate faster than a car's base price, and higher trims tend to lose their price differential percentage at a faster rate than the base price depreciates. That is a statistical fact, not an opinion, based on lots of data and analysis.

Based on that alone, I would advise someone who is purchasing any car to only purchase just the options that he/she actually requires, because they are exposing themselves to additional, unnecessary depreciation of their capital outlay, which ultimately translates into additional cost of ownership. And, if the options weren't really needed and wanted, they are effectively wasting their money on something that isn't giving them enough benefits to justify the expense.

In the case of extra battery KWh versus other options, in terms of depreciation I'd say it will be worse than the premium package, but better than the paint and much better than the EAP or FSD. Why? Well, because the premium package is providing mostly "old school" upgrades, such as nicer seats, sound system, a glass roof, and etc., while the battery upgrade is a "new school" option, but at least it represents a physical, tangible thing. Old School options are subject to depreciation due to normal wear and tear, reducing their functionality, attractiveness and therefore their residual value (the value of the usage that still remains.) New School options are additionally subject to "depreciation" of their underlying technology, in the same way that cellphones, computers, video game consoles and TVs lose their value much faster than they lose their functionality. I have a closet full of old cellphones and computers that work just as well as the day they were built, but are basically worthless. If I hang onto them long enough, they might be worth something as collector's item-but, interestingly enough, it won't matter if I have the base model or the upgraded memory version! Do you think a 16K Apple II in mint condition would be worth significantly less than a 32K version? Doubtful. :-)

So, how much faster will the Extended Range option depreciate than the Premium option? Hard to say, but I'm guessing twice as fast at least. The electric car technology embedded in the Model 3 is, itself, an "Old School" option: if there was a non-electric version of the Model 3 which was fairly priced today, it would probably depreciate at a slower rate than the electric version (this is currently true for all models which have Electric versus ICE versions.) But, you are compensated for this by the $7,500 plus local rebates, so you don't have as much downside risk buying the short range M3. The long range option has no compensatory rebate and is, in fact, priced to earn Tesla a profit, so buyers of that option are exposed to relatively greater downside risk.

EAP and FSD is totally "new school" and if you sell your car back to Telsa, whether you paid to activate their software has no residual value to them, because they can just "flip a switch" and change the status as it suits them. If you buy the EAP or FSD upgrade, you'd better make sure you will get the full $5,000 or $5,000+$3,000 use out of them before it is time to trade your Model 3 in, because, otherwise, you have just thrown away your money. Given that most people tend to trade their cars in after 4 years or so, the $3,000 FSD upgrade is an especially risky proposition, as buyers don't know at this point what percentage of that time they will enjoy the full benefits of the option, and cannot even properly evaluate, at this point, what that benefit will actually be to them, personally.

Given the above, this is why I am very reluctant to purchase the extended range M3, and why I feel that the $5,000 EAP option is not a good value for many buyers and why I think most buyers should stay away from the $3,000 FSD option. And, in fact, it is unfair, in my opinion, that Tesla doesn't offer the latter 2 options to upgrade at any time for their original price (or less, if the price goes down for buyers.) But, strangely enough, many otherwise rational people seem to feel that I am wrong. Whatever. I'll eventually have the data, and I'm sure I'll have the last laugh. ;-)

Rutrow | August 6, 2017

Fiddlesticks is always right... except when she/he's wrong.

I'm not saying this is that time, but I think there will be a big regional difference in value for the LR battery. In the urban/suburban areas with extensive SuperChargers there may be little value for extended range, but in rural areas (and apparently southern California) where commutes and long distance daily driving and sparse charging options is common, the LR batteries will command a higher price. With nationwide used car sales websites it won't be necessary for you to live in high demand areas to gain the added resale value for regionally desirable options.

I do agree with you about EAP and FSD.

bp | August 6, 2017

Cars depreciate in value.

The 310 mile configurations will lose more value than a 220 mile configuration, because the 310 version starts out costing $9K more.

What's likely is that both 310 and 220 miles will depreciate at about the same rate (I usually use 2% more month as a ball park estimate for depreciation, which has been a reasonable predictor of current value).

So, if you don't plan to do much road trip driving, the 220 will likely handle all of your daily driving (assuming overnight charging) - and there's no major reason (other than the .5 second faster acceleration) to spend an extra $9K for a larger battery pack with more range than you'll ever use.

If you do make periodic road trips, based on our experience in moving up from an S P85 (250 miles of range) to our new S 100D (335 miles of range) - having the longer range can help considerably, especially on shorter road trips.

ReD eXiLe ms us | August 6, 2017

I believe that Elon Musk and JB Straubel each hope that most will purchase a car with 'enough' range and no more. They are interested in selling as many cars as possible. We shall see soon enough if their 'Standard' range Model 3 is 'enough' for most buyers in the short term.

Electric Yikes | August 7, 2017

Would have been a good approach for Tesla to star selling the base model with software capped battery? (For those interested in that option at least)

Electric Yikes | August 7, 2017

start* selling, typo in previous post

Shock | August 7, 2017

Quick note on trading back into tesla with EAP/FSD enabled. There was a thread 3ish days ago and apgolf I think pointed out two links to tesla.com in one showing a car with EAP disabled and in another with it enabled. Conclusion therefore being that Tesla does not disable these software updates when you buy it; the purchase is not attached to the buyer but rather to the car. It would be a bit naughty if they did disable anyway, thus trying to sell the same option twice.

borne.by.wind | August 7, 2017

"If you do make periodic road trips, based on our experience in moving up from an S P85 (250 miles of range) to our new S 100D (335 miles of range) - having the longer range can help considerably, especially on shorter road trips."

Good point bp. Suppose you are on a 1000 mile trip and take the battery down to 20% before pulling in to a Supercharging station. Given the charging time rates and tapering, what amounts of clock time are required to fill the 220 and 310 mile batteries to 100% to continue on your way? This is important to those of us who may get some complaints from our passengers about frequent long stops.

bp | August 8, 2017

A few simplifying assumptions on the use of superchargers:

You'll typically try to keep the charge level above 10% when on your trip. This provides some cushion for the unexpected, plus keeping the battery pack between 10-90% seems like a good idea to protect the battery.

Superchargers have two stations connected to each charger. When you approach a supercharger, look for the station IDs - which will be a number followed by A or B (1A, 1B, 2A, 2B, ...). Before pulling into a spot you want to select a station (A or B) that doesn't have a car connected to the corresponding (B or A) station. If that's not possible then, when you connect, you will get slower charging, until the other car is finished.

Supercharging is fastest between 0-80% of charge level for the battery pack. Above 80%, charging begins slowing down - and it can take as much to charge from 80-100% as going from 0-80% - so you typically want to charge up to no more than 80%, if you can - which means you are effectively driving within 70% of the range capacity of the battery during the trip (150 miles for the 220 pack and 210 miles for the 310 pack). Which is easier with the long range packs than with the smaller packs.

For a 1000 mile trip (one way), the larger pack will let you drive an additional 80-100 miles before you have to stop, which probably saves you 5-10 minutes of charging time.

With the smaller pack, recharge times will be slower, especially if you need to go above 80% for charging. For a 1000 mile drive, that might add another 10 to 20 minutes to your charging times.

However... for a 1000 mile drive, you are going to stop to eat periodically. If you time those stops to be at superchargers located near restaurants, the time for recharging your car may be less than the time it takes you to eat - so when you leave the restaurant - the car may have charged to 90% or even higher. Which gives you the ability to drive farther on the next leg before stopping, and gain another 5-10 minutes of time from a skipped charging stop.

Bottom line - yes you can take a road trip with a 220. But having the 310 will definitely save you time on trips longer than 150 miles.

Which is why we'll be replacing our S P85 with a M3-LR.

topher | August 8, 2017

"There is no minimum holding period for claiming the federal tax credit if you purchase the car for personal use."

There is no SPECIFIED minimum holding period for claiming the federal tax credit if you purchase the car for personal use. Which means it is up to IRS auditors, and the IRS court. Flout at your own peril.

Thank you kindly.

stevenroglen | August 8, 2017

How does Tesla view their own used cars if trading one in? Do they apply the same type of blue book value to it? Lets say I buy a 3 but want to trade it towards a Y when the time comes. Will I be better off selling to a private party or trading it in?

weluvm3 | August 8, 2017

@topher right. I would advise waiting at least 1 year before selling.

Most people tend to keep their 1031 rollovers rented out for at least 1-2 fiscal years for the same reason. It's a red flag, and even if you haven't technically broken any laws by selling, the IRS can usually find something to get you on if they look hard enough.

bilj65 | August 9, 2017

Doesn't the Model S have different battery sizes, and so shouldn't there already be some experience with the resale value of larger battery packs compared to original option price? Can we learn from the Model S?

My worry is that the cost of batteries will continue to drop with the anticipated increases in manufacturing scale, so I think the LR option will lose a lot of resale value, but I'm still considering it.

It's like with computers, you pay a big premium to have the biggest and fastest processor when it's new, which in a few years costs only a fraction as much.... BUT this extends the total useful life of your computer and keeps it "competitive" a lot longer so you don't end up junking it in a couple years because it's already too slow. Now going back to Teslas, let's say in 5 years the typical range of a NEW EV is 400 miles, and you want to sell your old Model 3. Don't you think the 310 mile version will be a lot more desireable than 220 since it's being compared against the latest technology? There may be a glut of 220 mile versions no one wants because in 5 years that may be a laughable capacity.

bilj65 | August 9, 2017

Not to sound like I'm contradicting myself, I think the LR option may lose significant value in the first few years, but after a longer time it will be a godsend since I think the LR models will be more highly coveted.

Xerogas | August 9, 2017

@stevenroglen, you will always make more money selling to a private party. Tesla offers about the same for trade-in as CarMax or a reputable dealer would, because they need to make a profit when they resell it.

bmz | August 10, 2017

@Xerogas " you will always make more money selling to a private party. Tesla offers about the same for trade-in as CarMax or a reputable dealer would, because they need to make a profit when they resell it."

I feel quite confident that Tesla would offer you a higher trade-in than anyone else for an M3 without FSD. They can add FSD to your trade-in and make an instant $8000 profit at no cost.