Elon Musk’s assertion that Tesla cars would appreciate in value turned out to be inaccurate, as the opposite occurred with the vehicles depreciating instead.
Back in 2019, Elon Musk made an astonishing claim for Tesla vehicles. Tesla cars, he said, would go up in value, not down, after purchase.
The reason for that is Tesla’s full self-driving capability that, Musk has said, requires only some additional software updates and regulatory approval before Tesla vehicles on the road today will become fully independent. He repeated this claim as recently as June 2023.
“You can think of every car we sell or produce that has full autonomy capability as something that in the future may be worth five times what it is today,” he said in the company’s third quarter, 2023, earnings call.
And not only would the price of a used Tesla go up, but Musk also predicted a world in which Tesla’s driver assistance suite, which the company calls “Full Self-Driving” despite not fully self-driving the vehicle, would on its own be worth $100,000.
Because, with regulatory approval, your self-driving Tesla would be able to go “work” as a taxi on your behalf. All you’d have to do is sit back and collect the cash.
But four years after Musk’s 2019 prediction, the average used Tesla Model 3 is selling for $29,000. And regulatory approval for FSD has not arrived, either, as the company incrementally attempts to improve the software.
To be clear, used cars do not generally rise in value. Except for that crazy time in the early 2020s when all automotive production virtually came to a halt and almost all cars became, for a year or so, appreciating assets. Beyond that market quirk, though, Musk has been wrong.
Used Teslas have dropped precipitously in value over the past year or two, as Tesla has struggled to maintain its commanding dominance in the market for new electric vehicles. By aggressively slashing price of its own new cars and SUVs, Tesla has also created a domino effect, pushing down the values of other EVs, as well.
