Long Range vs Standard Range Depreciation

bobbymo

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#1
Hi all, first thread here, so mods, feel free to move this if it is better suited in a different section.

My question revolves around depreciation of the different battery options, all else being held equal. The long range battery option cost of $9000 seems a little steep, but I wonder if those vehicles will hold their value better than their standard battery siblings.

I tried to find data on the Model S for comparison, but had difficulty finding anything useful online.

I'm planning on driving the car into the ground, but for those that plan to sell/trade-in after 5 years, this information may be useful. If I would have thought this way when getting my last car, I would have ended up with a Golf R instead of my GTI (better residual value, though higher initial purchase price).
 

JWardell

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#2
I think there will be a difference in depreciation. Look at the S. The S60s (and very few 40s) are not very much desired and don't hold up to the ranges of the modern 75 and 85s.

Also, if you really plan to drive it for many years, the battery will only have 80-90% of its original capacity. That may make a difference in remaining useful or not in your situation.
 
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#3
I kind of disagree. Last time I was looking, it seemed like prices were very close between 60, 85, and P85 in say the 2013 vintage. The bigger change in price for the S is no AP, AP1, AP2, facelift, and 'D'. Some people just want to say they own a Tesla and 200 miles is plenty, the rest is gravy. I expect the LR to have more value than the SR, but 5 years from now it'll probably be $5k or less. If you drive it into the ground, it's whatever works better for you. It should beat this, but imagine it loses 5% every 50k miles, will it last you as long as you want.
 

tivoboy

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#4
I don’t think of this so much as depreciation of the value of the more expensive battery pack, but more the APPRECIATION of the technology that will occur over the next 2 to 5 years. The Standard car and battery pack will have a relatively quite low range, not including any battery deficiency, but the extended range battery pack will probably be still very comparable to what will be current At the time standard electric vehicle ranges. So if one is thinking about future value, it’s better to have a car and battery pack combination that will more closely approximate what will be the average future
 

SoFlaModel3

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#5
Welcome to the forum!

With Model S the biggest driver of value seems to be autonomous driving tech level.

That said in Model 3 I have a sneaking suspicious that the long range battery will hold value ever so slightly better. Range anxiety at this price point will surely come into play.

Just my $0.02.
 

Pascal Hureau

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#6
I agree, the Long Range will keep more of its value after 5 years than the standard version, mainly because battery packs will have a very long lifecycle and slower than expected lost capacity, and because range standards will shift from 200 up to 300-400 miles around 2020. The Model 3 is really ahead of that trend, and the new Nissan Leaf 2018 is not yet at that level.
 

kweezy

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#7
"Holding value" is such a nebulous term. I'd argue that even if in 5 years the SR version depreciates 50% and the LR version depreciates 47%, that you've still "lost" more money on the LR version. $40k * 50% = $20k = $20k loss. $49k * 53% = $26k = $23k loss. Clearly just using random numbers, but the point being is that I think the cost of ownerhsip of the LR version will be higher than the SR version, even if it depreciates less by percentage. So if you don't intend to get a lot of value out of the extra ~90 miles, it may not be a good value anyway.
 

Twiglett

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#8
Take a look in ev-cpo.com and compare the old 60 to the old 85. There seems to be a pretty consistent difference when comparing battery sizes across similar age, features and warranty etc
Personally I think the fact that they are being sold as "standard" and "long range" instead of battery size will change the depreciation.
Changing the 60/85 choice to one of "standard" and (in effect) "better than standard" may have a physiological effect in five years time which will bias value. Who knows which way that bias will occur?
 

jason1466

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#11
I estimate SR will be cheaper to own overall and have similar or even less depreciation than LR. Keep in mind there is a market for the cheapest of anything, especially if it is in good physical condition. New EV buyers are always caught up with range, that is true, but let's not forget that there is a common depreciation trigger for all current Model 3's... DC charging speed. That will be a place for improvement over time that will make our cars less desirable for long range travel, but less so for daily driving thanks to overnight home charging.
 

MelindaV

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#12
but let's not forget that there is a common depreciation trigger for all current Model 3's... DC charging speed
and remember, the standard will charge from say 50miles to 200miles slower than the long range because the battery charge rate slows significantly as it nears full capacity. So if charge speed is a factor, the LR wins hands down.
 

John

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#13
I think I would agree with the argument that what really matters in terms of depreciation is "When you sell the car, how much did it (net) end up costing you?"

A few factors to consider:

1. Many options don't hold their value as well as the car itself does (nice article here).

The article I linked suggests that your premium options will depreciate faster than the car itself. Depreciation is money you've lost and won't get back at resale. So options are more of an indulgence than an asset.

2. The lower the resale price, the bigger your audience will be when you try to sell.

There will always be a bigger buying pool for a four year old $29,110 base model Tesla with EAP that has retained 71% of its value than a $40,115 extended range premium big wheels EAP one. The more demand there is, the more likely you'll get the price you're asking for.

That all having been said, cars are not investments. A Tesla is not a money-saving choice—there are cheaper, more basic cars you could buy. With a well-optioned Model 3, you'll be spending at least $4,000 a year to own it, and there are very solid $9,000 used cars you could buy with leather and navigation systems (to wit: I just bought my daughter an ultra-reliable 2009 Prius like this).

You're buying a Model 3 not to save money but to enrich your life with a fascinating, soul stirring experience. As many wise people have noted before, your happiness is more based on family, health, friends, and experiences than it is with money.

There's your investment thesis, should you need one.
 

danzgator

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#15
Tesla itself seems to be the biggest re-seller of its cars. Based on my research, the cars depreciate, but the options do not depreciate much. Tesla options are EXPENSIVE, both in their new and used market. I'd say you probably end up paying 75-90% of the new value for options. So, I personally think you should recover the majority of your investment, if you opt for the LR battery. The risk is that if the SR battery becomes perceived as insufficient, like the Model S 40 kWh did. If it does, then you would have a potential re-sale issue there. Since the SR battery has substantially more range, hopefully this does not become an issue. Hopefully Tesla keeps doing what its doing, and keeps re-sale values and demand for its used vehicles high, so that we all win over the competition.
 

kmngq

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#16
I don’t think of this so much as depreciation of the value of the more expensive battery pack, but more the APPRECIATION of the technology that will occur over the next 2 to 5 years. The Standard car and battery pack will have a relatively quite low range, not including any battery deficiency, but the extended range battery pack will probably be still very comparable to what will be current At the time standard electric vehicle ranges. So if one is thinking about future value, it’s better to have a car and battery pack combination that will more closely approximate what will be the average future
So according to your theory, new cars will have higher range, as the tech becomes better. As tech becomes better and more mass produced, then things become cheaper.

If that's your reasoning, I bet you'll end up ahead by saving the $9k, selling the SR and getting something "current" in a few years.

Or if you're not thinking about selling, none of this matters.
 

Jakesthree

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#17
To those suggesting that in 5 years new EV's will have much longer ranges and therefore the current SR Model 3 will be woefully out of date, here's a different perspective. Maybe in the coming years there will be so many charging points, operating at much faster charging rates, that large battery packs will be not only unnecessary but undesirable (due to the extra weight). Just a thought :)
 

Model34mePlease

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#18
To those suggesting that in 5 years new EV's will have much longer ranges and therefore the current SR Model 3 will be woefully out of date, here's a different perspective. Maybe in the coming years there will be so many charging points, operating at much faster charging rates, that large battery packs will be not only unnecessary but undesirable (due to the extra weight). Just a thought :)
My guess is that a range between stops of 300-500 miles is the sweet spot. Nothing stops ICE cars from having much larger gas tanks. If there were significant desire for longer range vehicles they could easily exist.

If EVs could add 300-500 miles of range in 10 minutes, like a gas station stop, this whole issue would disappear. We are within about a factor of 6 from that tipping point with 170 miles in 30 minutes.
 

SoFlaModel3

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#19
To those suggesting that in 5 years new EV's will have much longer ranges and therefore the current SR Model 3 will be woefully out of date, here's a different perspective. Maybe in the coming years there will be so many charging points, operating at much faster charging rates, that large battery packs will be not only unnecessary but undesirable (due to the extra weight). Just a thought :)
Charge rates are a factor as well. Obviously gas can be added to a car quickly and charging takes longer, so range is at a premium for long distance travel.
 

Juergen

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#20
However, one must bear in mind that higher speeds also require a higher current or voltage when charging. New quick charging stations with 800-900V DC are currently being tested. However, the current or voltage cannot be increased indefinitely. The charging cables must remain easy to operate.