The National Automobile Dealers Association new electric vehicle retention list released last week has a tasty little tidbit in its roundup of value retention rates.
Tesla's Model S, which topped the 3-year value retention rate list for EVs in the new list, also sported a better value rate for most cars on a similar list released last year for all segments, including mid-size luxury cars. That includes BMW.
But the news may not be all good, all the time.
According to the most recent NADA study, Tesla's Model S retains 57.2 percent of its original value after three years based on dealer trade-in values. That figure is tops among mid-size luxury sedans, including BMW's 5-series, in a study conducted last year.
Also noted in the 2015 study, there is a significant cliff after three years when most EV manufacturers' powertrain warranties expire, meaning there's good chance that the Model S's value plummets after that.
The 2014 study by NADA (which examined all segments – including EVs) was comprised of only the Chevrolet Volt and Nissan Leaf — the only two cars that had been on the market for three years by the time the study was conducted. The Volt and Leaf retained 41.6 percent and 38.2 percent of their values respectively, due partly to price drops from their manufacturers and increasing competition in the segment. The 2015 study had worse news for Volts and Leafs on trade-in: those values dropped to 31.3 and 25.3 percent respectively.
As Tesla prepares to release their Model X, there's no doubt quite a few Model S owners will be looking to replace their sedans. This could trigger a market saturated with Model S's (or is it "Models S"?) at or nearing the end of their warranty lives — and it'll likely have legitimate competition in the near future as well, further driving down retained values.
It's no secret that Tesla has no significant cash flow, hasn't turned a profit for more than one fiscal quarter in five years, and probably won't have a cash-positive year until 2020.
That all could mean the bottom falling out for Tesla Model S values soon. Or not.
The post Used Tesla Values Could Be a Bubble Waiting to Burst appeared first on The Truth About Cars.
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