Value of Model S in 5 or 10 years

Value of Model S in 5 or 10 years

My biggest concern is how much the car will be worth in 5-10 years. I plan to very carefully take care of the battery, but it seems that will be the main issue in value - does the battery lose 10%, 25%, 50% of its capacity over time. Outdated technology is also a potential trouble spot.

I don't mind a lower value than a car of similar price purchased in the same year, but I don't want it to be worth $0 like an old cell phone or computer.

And with Gen III coming over the next 3-4 years, will that further drive down the price of a Model S given the supposed superior batter of a Gen III?

Any insight is appreciated.

schoendp | 8 gennaio 2013

I also assume there might be a price floor at which cost conscious customers would enter as buyers for a used car that has dropped in value. | 8 gennaio 2013

The "price" for the car will decrease but the "value" of the car for me will stay the same. (sort of like talking to my accountant about my "net worth"- always the same although I may have more or less money on any given year). The software is new with each update. I can have new batteries installed when needed (if needed). I am figuring on a long term relationship with my car. BMW, Volvo & Lexus were just brief affairs :o)

olanmills | 8 gennaio 2013

Well in 5-10 years the battery will still be working fine. However, when the car is much older and the battery is actually not really usable anymore, then you might have a problem.

Think about buying any run-of-the-mill 15 year old car (not a classic collectible or something like that). If it doesn't have a working engine, no one will buy it, right? Even if some guy will sell you the car for $500, but you have to replace the engine, most people would rather look somewhere else and pay a few thousand dollars for a working car.

gregv64 | 8 gennaio 2013

It's a car, not a cell phone or a computer. In both of those cases, everything is better in a few years and the old one may not even run new software.

In this case the touchscreen may be outdated and the range decreased, but the car will still be just as fast. And if we're right there will be more acceptance of electric cars and increased availability of superchargers, so while it's quite possible it will depreciate more than other cars (but no means certain that it will depreciate more than similarly priced cars) I expect a robust used market. It should be a very practical car for lots of people (unlike the roadster) and the main thing stopping many from buying it is the price.

rwang | 8 gennaio 2013

Let's see.

simple logic. 8 year unlimited battery warranty. If something happens between now and then, you get a replacement that will last longer than what you have. So ideally, battery dies in the 6th year, you get a replacements and you ride out hopefully another 6 to 8 years it could be only 2 years but that's highly unlikely. 8 years too lucky. Worst case, buy a new battery at 10k and get another 4 to 6 years?

jat | 8 gennaio 2013

Nobody really knows, which is why the lease rates are currently outrageous. If Tesla fails, the car won't be worth much because nobody wants to buy orphaned hardware. If battery technology vastly improves, the car will be worth a lot less.

On the other hand, it may be a collector's item.

Personally, I think if you are worried about the resale value, you probably shouldn't be buying the car.

LazMan | 8 gennaio 2013

I'm just guessing here but, the car is mechanically simpler than an ICE car so that part should hold it's value.

The batteries will depreciate the most but are certainly replaceable. In 10 years one could get a new battery pack with twice the range and half the cost. It would be like getting a new car.

jk2014 | 8 gennaio 2013

Probably best to see how tesla will assess depreciation when leases start up.

BorisT | 8 gennaio 2013

I agree with LazMan. The lowest depreciating car will be the smallest battery car. Battery technology continues to improve both in density, performance and price. I debated getting the smaller battery as I suspect we may have aftermarket kits (or even perhaps offered by Tesla) to upgrade our batteries to 600 mile range. So I think the battery cost will be a right off and not in the distant future.

That being said - I suspect the rest of the car will retain its value very very well. Similar to that of hybrids and I expect far better than any luxury or exotic. I also agree that these cars are mechanically far simpler with far less maintenance requirements and far fewer moving parts. So that should bolster the resell value of the car.

schoendp | 8 gennaio 2013

I can also look at it from the other side and say that an ICE vehicle could potentially drop more in value if EVs really take off because they would outdated and expensive to operate.

I appreciate the feedback and I think that as long as a better battery can be installed a reasonable price, these cars may actually retain more value than non-EVs.

Resale value is also good for the company long-term. Most of America won't buy a car that becomes worthless in a relatively short amount of time. Tesla needs to maintain current buyer's interest but also attract naysayers over time.

Mike C | 8 gennaio 2013

I wonder if the computer components will be updatable somehow - CPU, GPU, Retina display? The iPad 1 wasn't that long ago.

mlaiken | 8 gennaio 2013

Residual value of the car is anyone's guess but as far as in car tech goes I would say you are much better off with a MS than anything else on the road. The tech is currently top of the class and all tech in cars gets old and can't be updated. At least this can get software updates. Yes the newer screens may eventually be retina, etc but that's the case with any car. Look at BMW, the first idrive was horrible and adopters were just stuck with it. At least with a Tesla you can get an update and the tech can be as good as possible for a 6,8,10 year old vehicle. The big question IMO is going to come down to Tesla staying afloat and battery life/technology. Everything else is similar to current ICE cars so should be valued fairly similarly.

portia | 8 gennaio 2013

+1 jat
I also think if you are really worried about that, then maybe you should buy a regular boring car, not an advanced technology super car like the Model S, which we all know is somewhat risky, but the reward is also higher if you can take the risk.

Who has a crystal ball anyway? Just enjoy the car if you have it already. You might not have to worry about what happens in 5 - 10 years for all kinds of reasons I won't name.

bill | 8 gennaio 2013

I was read an article in Wired Magazine about the Model S and one of the things they said was "Tired" about the Model S was that you had to take your eyes off the road to adjust the fan speed on the touchscreen. Guess what, now you can do it on the steering wheel as a software update (they haven't been able to do those fixes on my Range Rover). There was another article in Forbes, I believe, and they mentioned that they couldn't believe that there was no voice recognition, guess what, now there is.

I was concerned about battery life until I ran into a PHD in Lithium Ion batteries supercharging his Model S at the Hawthorne site. He works for Boeing and designs batteries for satellites. He said he ran the same quantitative model he does for NASA for the satellite batteries and based upon his 200 mile daily commute and miscellaneous driving his battery pack should last 20 years.

If my battery pack last 8 or 10 years and the car is worth $0.00 at that time, it would have been worth it.

Model S #84

bill | 8 gennaio 2013

Excuse the typos in my post, have to go chase my daughters around the house they were tugging on me.

jk2014 | 8 gennaio 2013

Bill -- hear you my friend.

schoendp | 8 gennaio 2013

Good info Bill - thanks

Jat and Portia - you are naive if you think resale doesn't matter. Maybe it doesn't matter to you but the long-term viability of the company depends on it.

gregv64 | 8 gennaio 2013

I don't think that's exactly what they're saying. It's not so much that Tesla depends on resale, but resale will eventually reflect how good a job Tesla is doing. At this point it's an unknown, and the best you can say is that if you really like the car, then you hope other people will want it when you sell it. But it's a risk, so definitely if resale is important to you financially in order to buy the car then it may be too risky.

schoendp | 8 gennaio 2013

Greg - i agree with your well-stated sentiment. However, exploring the topic is what these forums are designed to do. In my personal case, resale is not a deciding factor, but for the company and my ability to buy another Tesla more quickly in the future, it is an issue. Responding that someone concerned with resale should not purchase the car doesn't answer the original question of what resale will be.

jat | 8 gennaio 2013

@schoendp - I am saying that as a bleeding-edge adopter, you should know you are taking a risk. If you aren't comfortable with possibly taking big losses on the car should you decide to sell it, you probably shouldn't be playing the game.

I have bought all sorts of bleeding-edge electronic gadgets, and many of them were shortly paperweights. I am pretty confident that the Model S will be my daily driver for a decade or more, but if it turns out that it isn't I am comfortable with the risk I took to get the highest tech car on the planet.

tranhv68 | 8 gennaio 2013

I can easily answer this question with an analogy. 10 years ago, my rich neighbor bought a 42" plasma tv for $10,000. It wasn't even 1080P just 1280X720. 7 years ago, I bought 3 42" plasma tvs from costco (VIZIO) for 2000 each. I thought they were a steal. Today a 42" 1080p LED TV might go for $400 and is much better than the $10000 plasma just 10 years ago.

We are early adopters. We are the ones buying the 10000 plasma tv. If we don't then the 400 LED TV may never come.

I've accepted that possibility that my $110000 Model S may be obsolete in 2022, replaced by something faster, with better range and possibly better looking. However, there are probably only 3500 2012 Model S's and I have #2991. It's very possible that it may be a collectible down the road.

schoendp | 8 gennaio 2013

Jat - I agree with that. I was mainly curious what people think resale will be assuming Tesla makes it as a company. My assumption going in is that resale ability will be above $0 but maybe a little below a comparably priced ICE.

Joyrider | 8 gennaio 2013

I will really be interested in the residual when the lease plans come out. Because of the design, it seems this car should age rather well.

However, as we all know when it comes to value perception is often way more important thancold hard facts. It will be very important that Tesla does all it can to maintain the value of the car from a perceived point of view as well as a practical one.

I have personal experience with Lexus along those lines. I had deal worked out for a new Acura to replace an LS400 coming off a Lexus factory lease. Part of the deal was Acura got to buy out the expiring lease. Lexus wouldn't sell to them. They wanted to keep the car so they had control over its pre-owned value. Worked out for me as I got a really good deal on a new LS.

My point is whatever the strategies there is more to keeping a good resale value than just having a good car. I am sure Tesla is well aware of this and no doubt have people working on plans to ensure the Model S holds its value.

jat | 8 gennaio 2013

@schoendp - if you want a guess, I would say slightly below a similarly priced ICE performance sedan, just on the basis that used car buyers are going to be more skiddish about something they don't understand.

GoTeslaChicago | 8 gennaio 2013

Just remember the saying: Prediction is very difficult, especially about the future!

portia | 8 gennaio 2013

I am not saying it doesn't matter, I am saying you can not answer the question now, you can only give opinions, guesses, and if you think the resale value might be 0 and you don't like it then don't risk it. But you are going to get so much out of the car in 10 years, or even 5 years while you drive the car! And if you want guesses, I think mine is going to be a collectible, and I don't mind paying $10000 to buy another battery down the road and drive it another 10 years.

Amped | 8 gennaio 2013

The Roadster resale is inline with other sport cars, even the 08s.

Brian H | 8 gennaio 2013

Yes, used Teslas will undercut new Leafs and drive them off the market!

a 70% 85kWh battery is almost like a new 60kWh. Except that it will now degrade MUCH slower than a new battery.

village33 | 9 gennaio 2013

This car is the first of its class/generation even more so than the first year Corvette, Mustang, E-Type, DB-6, etc. It will depreciate heavily over the first 10 years like all cars. It's value will flop around for the next 10 years as people scrap them and in 25 years, if you've maintained it well, it will be worth 3x+ what you paid for it (less for future model years). Guaranteed, whether EVs have 10,000mi range then and/or Tesla as a company is still around (which I hope it is) and/or we're flying in spaceships. Whether you can buy a loaf of bread for that sum in 2038 is a different question...

petero | 9 gennaio 2013

Schoendp. “Value of a Model S in 5 or 10 years.” The ‘S’ will likely depreciate 50% (of the MSRP) in the first 3-4 years – Which is is typical of most cars. At the end of 8-10 years, depending on condition (battery, mileage, body, paint, interior, accidents), your ‘S’ will likely be worth approx. 20% of the MSRP.

New automobiles, with few exceptions, are good investments. The only two ‘new’ cars that have been stellar are the Ford GT and the McLaren F1. Imagine being the owner of near -new 2008 $1.8+ million Bugatti Veyron EB 16.4, with 700 kilometers on the clock, and watching it sell for $933,814. Another 2008 Veyron sold in Las Vegas for $770K – also in pristine condition with under 12,000 miles. Personally,I would probably feel pretty good to be able to take that kind of hit and still feel my heart beating. By the way, a major servicing of a Veyron will set you back the price of a new Porsche Boxster, if repairs are needed add a 911 Turbo (thanks Colin Comer, SCM). $600 a year sounds pretty good.

Go check out or and see what a 3-10 year old BMWs sells for. You can buy 10 year old BMW 5 Series all day long for $10K!

I guarantee someone (if not TM) will make replacement batteries for the ‘S.’ Today, TM is using a commodity battery to keep costs down. I am sure laptops and other devices will see improved batteries and TM will adapt them. The big question will these new batteries be compatible with the early ‘S.?’

At the end of the day, what ‘jat’ said is true. The ‘S’ is the only 21st Century automobile on the market. I can’t wait to get mine in the next 2-5 weeks!

jat | 9 gennaio 2013

@petero - the only way a 3rd party makes replacement batteries for the Model S is if there are a lot of them on the roads and Tesla isn't around to do it. That combination seems unlikely.

schoendp | 9 gennaio 2013

Plus, the MS has inherent value in opportunity cost savings. No more gas stations, oil changes, etc. I did go check on 5-10 year old BMW and Lexuses and they all sell for $5k-$10k but are completely stuck with whatever technology came back in 2002. The more I think about it, I think the negatives of battery life, new car company, fear of EVs, etc. will be balanced out by potential battery replacements, updatable technology, etc. and the car will likely have resale near ICEs selling in the similar price range. My guess is that the 40 battery MS will retain a higher % than the 85 battery due to simple economics but at the end of the day, we are all buying a car for the excitement of a new breed of automobile that has the potential to revolutionize the way we drive and think about cars. I am very excited for my car and appreciate all the input.

jk2014 | 9 gennaio 2013

@petro -- what if you purchase the extra battery option? After eight years, you put in a new 85, would this raise the value in a significant way down the road 10 years? Would it be worth paying the 12k now for this possibility?

GLO | 9 gennaio 2013

A co-worker of mine has an all electric Rav4 (2002 EV Rav4). Unfortunately, they did not service their battery when they should have 3-5 years ago and are now facing a new battery. Their battery is NiCad and a replcement is $9K. Had they maintained the battery it would have cost 1/3 of that or about $3k. Toyota has said they will take the car as trade-in should she decide to purchase the new Rav4 EV with the Tesla battery and motor. Soo...the moral of the story, is that even after 10 years and 150,000 miles the car still has some value. I believe the MS will be similar.

Brian H | 9 gennaio 2013

Intelligent ICE owners trade in their cars when they are about to start wearing out and costing a fortune in repairs -- out of warranty. It will be interesting to see what happens with MSes at end of regular or extended warranty.

sergiyz | 9 gennaio 2013

Trade-in in 2015 for the new Tesla, get the new HOV stickers and a much improved car ;)

dborn | 9 gennaio 2013

Well, the car can never be worth $0.00! For one, there is a lot of aluminium content. secondly there is steel and copper. So, as a minimum the vehicle is worth something as scrap!!!! However, i doubt it will come to that.

Stark | 10 gennaio 2013

Here is what I got from a leasing company in Toronto. The residuals are based on kilometers driven:

16,000 km/y - 40%
20,000 km/y - 35%
25,000 km/y - 30%

This is based on 48 month lease. Also, it is an open-ended lease, meaning I would guarantee the residual and be obligated to the car at lease maturity. Based on purchase price of $87,177.88 (after tax credits), on a 16k/yr, I would be looking at residual of $34,871.15 + tax at lease maturity.

Still not sure if I'll lease or finance. Waiting to hear from the accountant about what the better option is as my wife can claim as a business expense.

chadrchristensen79 | 14 gennaio 2013

I am surprised no one is factoring in fuel savings.
I'm replacing a BMW 550GT that averages 18.5mpg
With a fuel savings of $3000.00 / yr that more than
makes up for poor deprecation. After 10 yrs. I will be
$20,000.00 ahead of the BMW even if the model s is worth
nothing, and the BMW is worth $10,000.00.

petero | 14 gennaio 2013

jat@jaet. Regarding 3rd Party replacement batteries. It is “possible” that TM may wish to stay ‘lean’ and when a newer battery is developed, contract the old one to a 3rd Party, rather than manufacturer both. TM is going to go through a lot of changes and Mr. Musk will be looking both to the future and carefully watching the bottom line. Great design is important, but expenses and profits are important too.

jk2014. ‘what if you purchase the extra battery option?’ The short answer is, I don’t know. If you do buy the battery replacement for $12K you will at least know your costs from the beginning. Personally, the only cars I keep 10 years+ are old vintage sport cars. Driving “old school,” is very entertaining for me. How well driving a 10 year old MS translates is up to you. I think the MS will drive smooth and quick, the range will be down and the most important factor for me, if I were to keep the MS for 10years, is making sure there is an extended mechanical-electronic-software update warranty (hopefully 10 years, 250K miles, excluding battery??). Judging from MS ‘Beta Testers’ results, the MS is a very advanced, complicated car that is perhaps a decade ahead of the competition.

Slightly off subject. I realize leasing isn’t a MS option now, but…One of the reasons I liked to lease new cars is what I call the “3 year break even point – is the glass half empty or half full.” In traditional 36 month leases the leasee pays for half the leased car and has the option to return the car or buy the car for the other half. If you buy out the lease you often purchase extended warranty because you will be facing all the maintenance and repair charges. Ask a BMW 5 or 7 Series about repair/maintenance costs 5+ years down the road. I call the 36 month lease the ‘honeymoon’ analogy. You have no costs related to: maintenance, repairs costs, and extended warranty. You return the leased car and get a new one. The other reason I prefer to lease is features improve every years. I can’t emphasize my focus on safety improvements. A lot happens in 10 years!

Joel N. Weber II | 2 marzo 2013

Sergey Brin claims self driving cars will be available within 5 years

Will a 2013 Model S be upgradable to be self-driving, or will the old car bodies need to be scrapped when self-driving cars take over the world?

jat | 3 marzo 2013

@Joel - Since Google didn't build the self-driving cars from scratch but instead took off-the-shelf cars and modified them, clearly you could do it. However, you might not like what it does to your Model S - the current unit has a big bulky radar on top of the car, and big cutouts at all four corners for sensors.

gasnomo | 3 marzo 2013

My two-cents, which is probably worth less:

1. It will retain value more than an average car b/c its the first model year of a new model with new technology. Think of the Tucker.
2. I think ultimately it will depend on how batteries progress over the next 5-10 years. If not a lot of progress is made, I think (hope) the car retains a good deal of value, if on the other hand Tesla or someone else delivers a 500 rated mile battery, the value would go down. Now of course if we can 'upgrade' the battery, it may retain better value, but you have to subtract the cost of the upgrade to gauge the real 'value' that the car has retained.

That said, and again, just my opinion, if you are buying the car with the hopes of it retaining value, I personally don't think that's a reason to buy it. I bought the car because:

1. It's cool - i mean c'mon, its really cool
2. I want to support the company b/c I believe in electric cars (and have solar on my roof so my operating costs are even lower than estimated.
3. I'm a technophile
4. see #1. :)

Joel N. Weber II | 3 marzo 2013

@jat: While they're clearly willing and able to modify off the shelf cars to build their engineering prototypes, that doesn't necessarily imply that a modification kit will be developed for every model on the road for production use.

There's also a big unknown, AFAICT, about whether the production version is going to have the laser rangefinder. Humans have been successfully driving with not much more than two optical sensors for a long time, and the laser rangefinder seems to be rather expensive to build right now. Maybe they'll figure out how to get economies of scale with mass production of the laser rangefinders, or maybe the laser rangefinders are just being used to test/confirm the accuracy of the software that processes the data from the visible light sensors.

The drive by wire throttle in the Model S removes one thing that might otherwise need to be retrofitted, but how do the steering and friction brakes work on Model S?

jbunn | 3 marzo 2013

Goobye, Nick. Looks like the forum moderators have had enough of your trolling....

lorddeff07 | 3 marzo 2013

This is the funny thing about electric vehicles.... in 10 years time, for a similarly sized battery (physical footprint); capacity could probably max out at 250KW and would ost less then than it does now to have 85KW.

So the real question is that would tesla allow you buy a new battery to put in your model S? Would they put what would then be a much smaller 85KW pack into the current 85KW shell just to make it compatible?

Funny thing is, with an electric vehicle, if we can keep getting our hands on the latest current higher capacity batteries, you could very well be driving that car for ever.

cloroxbb | 3 marzo 2013


If Tesla sticks with the same platform, and the "better" batteries have the same characteristics as the current batteries, I dont see why that couldnt be an option. Of course its a big IF though. :)

I personally, would like to see that happen.

gasnomo | 3 marzo 2013

NNT, your comment about a required battery replacement in 8-10 years costing X is just made I see why you have gotten your reputation.

RZitrin1 | 3 marzo 2013

As to value of the car, my guess is that at least for the Signatures, we'll see prices more like the Tucker than the DeLorean.

Although I'm planning on keeping mine for as long as possible, hopefully as my last car.


jbunn | 3 marzo 2013

Not worried about self driving cars. Im still waiting for the jetpack, and flying car I was promised in the late 60s