Musk: Tesla's are appreciating assets

Musk: Tesla's are appreciating assets

andy.connor.e | 12/04/2019

Interesting thought. If the vehicle can produce more money as a cab than what the finance cost is, would that make its value higher than its purchase price?

Rt002k | 12/04/2019

In investment terms, yes.

crmedved | 12/04/2019

Uh, no. I mean, if Tesla stopped producing them today... maybe. But, in say 3 years, the model 3 being built will be better than the model 3 you bought today and sold at roughly the same price due to competition. Your car will be worth significantly less than you bought it for.

The Tesla network thing might come into play one day... in like 5+ years. Not any time soon though.

Rt002k | 12/04/2019

You would be hard pressed to get any financial accountant to not depreciate the car over time in the accounting sense of the term though.

Rt002k | 12/04/2019

crmedved - that's assuming the only value in the car is the intrinsic value. If it has significant revenue generation ability, that would need to be included in the calculation of its net present value.

Rt002k | 12/04/2019

That is not to say that the resale value increases though. The resale value will never be more than the cost to buy new (unless you get into collector's items like you say) but the resale value isn't the only value to you, the owner.

Magic 8 Ball | 12/04/2019

If you value your life and realize how much time you spend in a deadly weapon surrounded by deadly weapons, operated by idiots, the incremental improvement that allows the Model 3 to have the highest crash test rating ever is absolutely an asset and an invaluable one at that.

crmedved | 12/04/2019

@M8B When you say incremental improvements... I'm not sure if you are referring to manufacturing/design improvements or software... I kind of doubt the software has much to do with the 5 star crashing rating, other than standard AEB that many cars have nowadays.

In fact, for me, I find it much more valuable safety-wise if everyone ELSE has a M3. I know I do a better job driving than EAP. I have the ability to anticipate when other people around me are about to do stupid shit based on how they've been driving. When I see people like that I usually slowly back away from them :)

Magic 8 Ball | 12/04/2019

@crmedved For crash test rating the improvements would be in structural design and am not sure how one would assume I was talking anything else, especially someone that appears to have knowledge in the subject. Sandy Munro faulted TESLA and still faults them for over designing the structure saying he can knock a lot of cost out of it by making the battery part of the structure. I like what TESLA did and the rating they got is well deserved.

You may think you do better than EAP but I am not so sure that holds true for the general public. We took a nice long drive on the coast again today and on one curve the car tagged the centerline braille for a couple bumps before correcting. I spoke out loud and said: "shame on you TESLA for reacting too late". Then I said: "had I been steering I would have probably done it three times by now." Wife and I looked at each other and chuckled in agreement.

There are times and places for EAP and when used properly it makes long trips much nicer. When you see the stupid people up ahead just take over.

ADinM3 | 12/04/2019

I haven't listened to the discussion to hear the exact context of his statement, but as long as Tesla sells new vehicles for the same or lower price in the future I think it is impossible for the price of an existing, high production run vehicle to appreciate. Someone certainly won't pay you more for your car than what they can buy new for.

ebiggs | 12/04/2019

I don't think it will appreciate in absolute value, but it will hold its value a helluva lot better than every other car being produced today... As somebody who holds onto cars for 10+ years it just didn't make sense for me to buy anything but a Tesla. Of course, that's partly because I'm an OG Tesla/Musk bull (I bought TSLA the day after the IPO). In other words, I believe these cars will be FSD some day within the next 5 years.

crmedved | 12/04/2019

@M8B Ah, sorry, I was confused because the OP is talking about Teslas appreciating in value and you mentioned incremental improvements to the safety rating. I was puzzled because obviously my car isn't going to get structural improvements and the software improvements likely won't have significant impact on crash ratings to help it appreciate.

And yes, I consider myself to be better than the "average" driver. But not perfect. Never caused an accident, and have avoided a few potentially caused by others... but have definitely made mistakes. I use EAP all the time though and love it. It is great when used correctly.

Oh and I often end up disengaging AP on curves because I speed a bit on interstates (but not really faster than the flow of traffic). It hugs the line a bit too close for my comfort, especially when there are cars next to me. Plus, other people are terrible at keeping in lines on curves *cough cough* so I have to be ready to adjust myself in the lane to hug the opposite side of the lane and position myself to where there isn't a car next to me.

coleAK | 13/04/2019

I agree with others where unless collectors cars are taken into consideration cars are never an appreciating asset. I think he is sort of going down the road of the old Porsche stand by. where sales staff claim they are an “investment” because they don’t depreciate as much as other new vehicle purchases when they “cross the curb”. I’ve purchaced 4 new Porsche’s over the years but never bacause of that line.

Rt002k | 13/04/2019

Depends on where you are looking for the value in the investment. If you purchase something for $50k and over its life it generates $100k in revenue, is that not a good investment?