Tesla Models EVS Depreciation

Tesla Models

The electric vehicle (EV) market is evolving rapidly, and with it, the patterns of vehicle depreciation are also changing. A recent study by iSeeCars has shed light on the depreciation rates of EVs compared to other vehicle types, revealing interesting trends and insights.

Particularly noteworthy is the performance of Tesla models in this regard, with the Model 3 and Model S exhibiting significantly different rates of depreciation. Understanding these trends is crucial for both current and potential EV owners, as it influences purchasing decisions and perceptions of EVs as a long-term investment.

Technological Advancements

Key Points

  • Electric vehicles depreciate more than hybrid and pickup trucks, but less than they used to.
  • The federal tax credit for electric vehicles contributes to their higher depreciation.
  • The Tesla Model 3 holds its value the best among electric cars, while the Model S loses the most.
  • There are some killer deals on used electric vehicles.
  • If you are buying a new EV, be prepared for it to lose a significant amount of its value over the next 5 years.
Tesla Models EVS Depreciation.

Electric Vehicle (EV) Depreciation

Here is a comprehensive overview of the depreciation trends in the electric vehicle (EV) market, particularly focusing on Tesla models. Here are some key insights and additional thoughts to consider:

  • EV Depreciation Rates and Improvement Over Time: The overall depreciation rate of EVs, which stands at 49.1% over a 5-year period as of your report, shows a notable improvement from the 67.1% rate in 2019. This improvement suggests increasing market confidence and acceptance of EVs.
  • Federal Tax Credits Impact: The federal tax credits available for new EVs can initially lower their purchase price, which in turn affects their resale value. When these vehicles enter the used car market, their prices can appear to depreciate more steeply compared to their original MSRP, which was effectively reduced by the credit.
  • Concerns About Battery Life: One factor affecting EV depreciation is concern over battery life and the potential costs of battery replacement. As battery technology improves and more data becomes available on long-term battery reliability, consumer confidence may increase, potentially reducing depreciation rates.
  • Tesla Model 3 vs. Model S Depreciation: The contrast in depreciation between Tesla’s Model 3 and Model S could be attributed to various factors, including initial price points, demand, and perceptions about the models. The Model 3, being more affordable, might have a broader appeal in the used market, helping it retain value better.
  • Limited Data for Many EV Models: The fact that there are not many EV models with a 5-year market presence or significant sample size for analysis underscores the relatively nascent stage of the EV market. As more models mature in age and data availability increases, a clearer picture of EV depreciation trends will emerge.
  • Opportunities in the Used EV Market: The higher depreciation rate of EVs presents opportunities for buyers in the used market, where they can find more affordable options. This could help increase EV adoption among buyers who are price-sensitive or sceptical about new EV technology.
  • Long-Term Ownership Perspective: Prospective EV buyers, especially those considering new models, should be aware of the potential for significant depreciation. However, this should be balanced against other factors like environmental benefits, lower operating costs (e.g., fuel and maintenance savings), and potential future improvements in resale value as the market matures and technology advances.
Tesla Models EVS Depreciation

Consumer Perception and Market Confidence

The discussion of electric vehicle (EV) depreciation, particularly in the context of Tesla models, presents several pros and cons:


  • Improving Depreciation Rates: The improvement in depreciation rates from 67.1% to 49.1% over five years indicates growing market confidence and acceptance of EVs.
  • Opportunities in the Used EV Market: The higher initial depreciation rates for EVs create opportunities for buyers in the used car market to access more affordable EV options.
  • Advancements in Technology: As EV technology, particularly battery life and efficiency, continues to advance, it’s likely that consumer confidence will grow, potentially leading to better retention of value in the future.
  • Environmental Benefits: EVs, including Teslas, offer significant environmental benefits over traditional internal combustion engine vehicles, which can be a compelling factor for many buyers, regardless of depreciation concerns.
  • Lower Operating Costs: EVs typically have lower operating costs than gasoline vehicles, including savings on fuel and maintenance, which can offset concerns about depreciation.


  • High Initial Depreciation: EVs, including certain Tesla models, can suffer from high initial depreciation, which can be a significant financial consideration for new car buyers.
  • Impact of Federal Tax Credits: The federal tax credit for new EVs, while beneficial upfront, can artificially lower the initial purchase price, leading to a steeper apparent depreciation when these vehicles enter the used market.
  • Battery Replacement Concerns: There are ongoing concerns about the long-term life of EV batteries and the potential high costs of replacement, which can influence depreciation rates and consumer confidence.
  • Limited Historical Data: The EV market, including many Tesla models, is relatively new, which means there’s limited historical data to predict long-term depreciation trends accurately.
  • Market Volatility and Rapid Technology Changes: The EV market is rapidly evolving, and with frequent technological advancements, older EV models may become outdated more quickly, impacting their resale value.

Battery Technology

The depreciation rates of EVs present certain drawbacks, particularly for new car buyers concerned about resale value, there are also significant advantages, especially for those looking at the used car market or prioritizing environmental and operational benefits over long-term financial returns. As the EV market continues to mature, these pros and cons may shift, reflecting broader changes in technology, consumer preferences, and market dynamics.


While the depreciation rates for EVs, including Tesla models, present certain challenges, they also reflect a dynamic and evolving market. Prospective EV buyers and owners should consider both the short-term financial implications and the long-term benefits and trends in the EV sector.

the depreciation rates of EVs, particularly those of Tesla models, highlight a dynamic aspect of the burgeoning EV market. While EVs currently face higher depreciation rates than some other vehicle types, there is a notable improvement over the years. This trend suggests growing market confidence and an adjustment period as the technology matures.

For consumers, this presents both challenges and opportunities. While new EV buyers might face significant value depreciation, the used EV market offers more affordable options, potentially accelerating EV adoption. As battery technology and consumer confidence continue to evolve, we can expect these depreciation figures to adjust, further shaping the landscape of the EV market.


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