Michael Barnard Recently, Elon Musk was interviewed by MIT Artificial Intelligence Investigator, Lex Friedman, and made a claim he had made before. In essence, buying a car today is an investment in the future … the deepest thing is that if you buy Tesla today, I believe you are buying a valuable asset, not a depreciable asset. "
A few weeks later, Musk went further and pointed out that Tesla owners could make a gross profit of $ 30,000 a year from their cars. It's qualified with one million miles and 11 years of vehicle life, but it's not like Musk showed its math on the subject.
We decided to look at this in several different ways to evaluate this claim. What is the basis for this? For which testes did he apply? And whether the used car market was raised?
This is not news, Musk just talks more about him at the moment. Designing the creation of a Uber competitor owned by Teslas has been running for quite some time on the Musk radar. Considering that during the last quarter, Tesla also repaid debt of $ 920 million, started supplying to other continents (leading to a supply delays that affected revenue), and spent a lot of money building up its next Gigafactory in Shanghai for the Chinese and Asian markets. (leading to a loss for the first quarter and expected losses for the second quarter), a positive note was probably needed.
The corresponding October 2016 release was that all teslas were manufactured from this point forward with all hardware devices, including sensors, networks and drives, to be fully self-sufficient once the software component has been finalized, and upgrading to full autonomy will be over-air update. Since then, they have changed their processor, but Musk has assured owners who buy full self-management capabilities that the processors will be replaced for free. New vehicles come with the new processors.
~ 6 months ago it was in all new production cars. No sensor changes. This is a simple replacement of the computer with autopilot. It will be done for free for those who have ordered full self-driving.  – Elon Musk (@elonmusk) October 16, 2018
Those who have not committed themselves in advance, but we will see how this will happen. Nevertheless, this is not particularly important for further analysis.
When there is complete autonomy, customers will be able to choose to use their ride-sharing cars when they are not driving. As the average car moves 5% of the year, it's a lot of time that they can make money instead. Suppose 50% of Uber's prices are because they do not have to pay the driver. That's about $ 1 a mile. Let's take a limited 10 fares a day, an average of 3 miles each, and a five-day operation a week. That's $ 30 a day, $ 150 a week, $ 600 a month, and $ 7,200 a year.
30 miles takes about 10 kWh of electricity at an average of US $ 0.12, so that's $ 3.60 a day for extra cost to the worst (most EMCs will charge at low mid-night billing periods or on free chargers devices as available). This is a price of $ 18 / week, ~ $ 72 / month, and ~ $ 864 per year.
You almost double the average daily driving in the US by 30 miles per day, so there will be extra wear, cleaning and tire. costs. Call it $ 1,000 a year for spending.
$ 7,200 – $ 1100 – $ 864 = $ 5336 gross per year for something you do not have to think about. Doubleing trips to 60 miles a day, that's $ 10,000 per year. Set them up to 90 miles a day, $ 15,000. Etc. Most of the time when traveling to tariffs, not with customers who pay, so let's assume that 60% of the lovers are under the tariff, leaving 216 miles per day for paid trips. Take 5% of your personal use and that's close enough to 200 miles a day under the tariff. This can exceed $ 30,000 a year, if we assume that Tesla has not taken a significant break from the top. Even that would be manageable with a reasonable upward correction of prices.
The Tesla Model 3s come with all the autonomous hardware in the $ 35,000 version. Let's call it $ 45,000 with autonomy included. Used Tesla Model S 60 and 70 vehicles built after October 2016 are in the range of $ 50,000.
Most cars are likely to depreciate perhaps 30% when delivered. Let's say Tesla has lost $ 15,000 in the first year and probably another 10% a year later. Let's make some numbers to see if you even stop the amortization.
Yes, we could overcome the depreciation with a long shot, quite fast with moderate car sharing. Of course, these are depreciation rates that seem reasonable, but these will be influenced by greater utility.
If I could buy a second hand, a one-year model of Tesla 3 for $ 30,000 and make it $ 30,000 a year, it's actually an amazing deal. It is debatable that people will pay a premium for this. Even a used S 60 or 70 model at that price would be very interesting.
Does the used car market show any signals on this issue?
At the beginning of January CleanTechnica published two pieces of the used car market and value for Tesla Model 3s.
One of the places we would expect to see some evidence that smart people see this [ThefirstonefoundthattheTeslaModel3swasbarelypresentontheusedcarmarket-byanalyzingtheAutotraderwecomparedthemodel3withitsAudiandBMWrivalsandcompareditwithequivalentandcheapercars
I just updated this assessment three months later to look at only other manufacturers since 2019 and see if people were selling their model partly because of the potential loss of their tax rebate on sale before 2019 By comparing apples with apples, the Tesla 3s is still significantly underperforming in the used car market. These data could suggest that the owners think of the utility of the car, especially since many Model 3 buyers are likely to stretch to get the more desirable car. Several hundred thousand pre-orders for Model 3 testify to his desirability at the price levels Tesla has designed, as well as his status as the 6th most-sold US car in the past 3 quarters together. CleanTechnica pointed out that Kelly's blue book scratches the head, taking on the value of reselling the Model 3. t Kelly Blue Book titled it the best of any electric car for the expected resale value, but their own published numbers have made it clear that Model 3 will keep its value better than any other car period, not yet that way. The second best electric car is the X model in this rating. According to the thesis, this could indicate that KBB people have seen the value of autonomy, but when you read KBB's actual comments, there is no indication of it. It does not appear that resellers analyze this in the same way that Musk claims to be, or the earlier digital work suggests that it should be, at least not yet.
Other information that is worth evaluating is recently. release iSeeCars.com analysis of the resale of Tesla Model S against other cars. They found that the S model is the fastest-selling second-hand car in its class with a significant margin, almost 10% faster than the much cheaper Audi A7 and A8 and almost half of the Maserati Quattroporte market. The same-rated BMW 7 Series takes almost two weeks more, and the cheaper 6 Series is in the same boat. This analysis makes it clear that Tsedla's used cars are also highly valued on the market, but is this not a sign of how buyers value them on the basis of an autonomous taxi service?
on iSeeCars to clarify a few questions to see if further display of the data would reveal anything interesting.
The iSeeCars team made a point in their report that the S model was the most reduced for cars, but it is unclear how they came to that statement from the report itself. What they have done is look at the average values of all used cars in this model to look for extraordinary values. The Tesla S model has the largest deviation in the price used for this.
But this seems to be potentially aligned as the Tesla S has come in a huge range of new price points for different configurations, from the original S $ 60,000 60 to P100D to $ 135,000. This is a much larger range of MSRP than its competitors, which have much more narrowly segmented product lines and therefore numerous proposals covering the same range. Can this be the reason for the differences that iSeeCars sees? They looked in deeper and provided this interesting insight:
"P100d has the lowest percentage of all ceilings for 10% or more below market value. 60D has the highest percentage of ads that are 10% or more below. "
This seems to mean that 60D has the largest number of cars that are less desirable. This could be an age for prospective owners, but the P100D's desire seems quite true. On the market used, buyers want as much as possible from Tesla
Finally, there was a question of whether the basic data showed anything about the value of the vehicle with full self-control features. If that happens, there will be a visible change in vehicle statistics between 2016 and 2017. Once again we asked this particular question to iSeeCars.
"Our analysis shows a breakdown of the model year or year of production in the case of Tesla. , 2016 and 2017 are almost the same for market days: 2016 is 35.8 days and 2017 is 35.9 days. 2018 was 29.0 days. "
The used car market once again does not show that buyers clearly appreciate the potential for full self-driving, but just want the latest, the best Teslas.
Musk's claim seems correct. There could be Tesla with full self-drive and Tesla robotaxi autonomous ridesharing service made a lot of money a year for the owners of Tesla. However, there is no clear signal from the basic market of second-hand cars that someone is still interested in this.
Will everyone call for rideshare? Of course not. But everyone will get a family car that can deliver every family member wherever he has to go without mom or dad traveling all the time? Yes, and it costs a lot. In fact, it is quite possible that many families with two cars with children will have the opportunity to have an autonomous car and receive the same utility. As the US government estimates the annual price of the car at $ 9,576 a year, maybe Musk would have to advertise families with one car instead of Tesla Taxi!
Tesla are highly desirable used vehicles sold faster than competitors and non-competitors, and retaining resale value for longer in many cases, but this does not seem to be aligned with making money from future capabilities of Tesla Taxi. Of course, it's like Henry Ford at the beginning of the 20th century, who said, "If I asked people what they wanted, they would say faster horses."
Most people have not internalized the thought that Tesla is turning into money. there are still no costs. When it begins to sink, the data may change. But to date, other cars are likely to have full self-management capabilities, and companies such as Uber will use them at competitive prices, which will lead to the same assessment of the used car market. Maybe.
Michael Barnard is the chief strategist with TFIE Strategy Inc. It works with startup companies, existing companies and investors to identify the potential for significant growth and spending in the fastest-changing world. He is editor of The Future is Electric. He regularly publishes analyzes of low carbon technologies and policies on sites such as Newsweek, Slate, Forbes, Huffington Post, Quartz, CleanTechnica, and RenewEconomy, and his work is regularly included in textbooks. Third-party articles for his analyzes and interviews have been published in dozens of news sites worldwide and have reached Reddit Science number 1. Much of his work comes from Quora.com, where Mike has been the lead author every year since 2012. He is available for consulting engagements, speaking engagements and board positions.