There’s an old but still pertinent adage which says that a car goes down in value the second you drive it off the lot. Indeed, nothing depreciates in value quite like a brand new car. Some estimates and studies have even found that the value of a car can go down by as much as 10% after just one month of ownership.
Tesla of course isn’t immune from this type of depreciation, but a new study from Autolist reveals that Tesla vehicles tend to hold onto more of their value than comparable vehicles from other manufacturers. Specifically, Autolist found that a Model S with 50,000 miles on it saw its value go down by 27%. In contrast, a Mercedes S Class with similar mileage typically loses upwards of 33% of its value on the resale market.
Notably, Mercedes isn’t the only brand unable to keep pace with the Model S when it comes to value retention.
Also included in the Model S’ segment are the BMW 7 Series, Audi A8, Porsche Panamera and Lexus LS. Autolist’s data showed that at no point in the depreciation curve of any of these vehicles did a gas-powered rival have a stronger resale value than the Tesla Model S.
The following chart certainly speaks volumes. Clearly, the Jaguar XJ is the least desirable here, with the car losing nearly 70% of its original value after 100,000 miles.
Interestingly, the loss in value is even more stark when looking at the Model X and other crossover vehicles. Autolist found that a Model X with 50,000 miles lost 23% of its original value while the BMW X5, as a point of comparison, lost upwards of 34% of its original value.
In short, Tesla vehicles are in a way similar to iPhones in the sense that they might cost you a lot of money up front, but the resale value is typically pretty high relative to competitors.
Now all this certainly begs the question: why do Tesla vehicles maintain more of their value than cars from other manufacturers?
While some might point to Tesla’s status as a forward-thinking and somewhat hip brand, there’s something to be said for Tesla’s over-the-air software updates which introduce new features long after the car has driven off the lot. In this sense, a used Tesla seems newer than its age might otherwise suggest. Lastly, it may all boil down to supply and demand. As far as car manufacturers go, Tesla is still in its infancy. In other words, if you want a Mercedes or BMW, there are no shortage of options available. If you want a Tesla, well, the supply of used Tesla vehicles is dwarfed by the supply of used cars from more established automakers.