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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 Outdated technology is also a potential trouble spot.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.

@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.

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.

@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?

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.

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.

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

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.

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.

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.

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!

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?

@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.

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. :)

@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?

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

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.

@lorddeff07

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.

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

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.

Richard

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


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