New iSeeCars study: Tesla Model S depreciation drops its resale value like a stone
All cars depreciate. That’s just the unfortunate nature of car-buying. However, some vehicles ditch their resale value quicker than others, like luxury cars and EVs. One of the worst depreciation culprits is both a luxury car and an EV: the Tesla Model S.
The Tesla Model S is among the top five vehicles with the worst depreciation on the market
Tesla started selling the Model S, the brand’s first volume EV, in 2012. It didn’t take long for the luxury EV sedan to gain popularity. Now, over a decade later, there is plenty of data detailing how the Model S holds its value. Or rather, how it drops its resale value like a ton of bricks.
According to the latest depreciation study from iSeeCars, the Tesla Model S may lose as much as 65.2% of its original value in the first five years of ownership. Granted, the estimated average $52,165 loss presents a unique prospect for used car buyers. However, new car buyers stand to lose a shocking chunk of a Model S’s MSRP in a half-decade.
| Make and model | Average depreciation rate (5 years) |
|---|---|
| Jaguar I-PACE | 72.2% |
| BMW 7 Series | 67.1% |
| Tesla Model S | 65.2% |
| INFINITI QX80 | 65.0% |
| Maserati Ghibli | 64.7% |
| Industry average | 45.6% |
It’s not just the Model S, either. The Model X and Model Y are also in the top 25 depreciation offenders. “Even Tesla’s Model 3, with the lowest rate of depreciation among electric vehicles, is over 10% than the industry average, and it only gets worse from there for EVs,” said iSeeCars Executive Analyst Karl Brauer.
It’s the curse of the electric vehicle segment and luxury cars alike. Of course, buyers can opt for cars with lower depreciation rates. “Both the percentage and dollar value drop of luxury vehicles need to be considered for new car buyers,” Brauer said.
“While a premium badge and the increased performance or luxury features that come with it are often sought out by new car buyers, the used car market doesn’t prioritize those traits to the same degree, thus the consistently higher depreciation for luxury models.”
