Do Teslas Hold Their Value | Your Questions Answered

Tesla is a highly desirable electric vehicle brand with a premium price tag. Like any vehicle with this large of a price tag, depreciation rates and car values are a huge consideration. This begs the question, do Teslas hold their value well to make them worth buying?

On average, Teslas lose their value from 10% to 30% after three years of usage. This is low compared to many ICE vehicles, which usually lose 40% to 60% of their value after three years. Tesla’s low depreciation rate is due to factors such as mileage potential and durable batteries. 

Purchasing a new car can be a daunting feat, especially when it looks like its value plummets the second you take it for a drive. Don’t worry! Below is a comprehensive discussion on how Teslas hold their value better than other vehicles.


What is Car Depreciation?

Car depreciation refers to the decrease of a car’s market value over time as it earns mileage and ages. Generally, a car’s value drops from the time you first bought it. However, this price drop varies amongst models and manufacturers. 

What Factors Affect The Depreciation of Tesla Vehicles?

Factors like mileage, model features, maintenance history, battery condition, marketability, warranty, and previous owners usually affect the depreciation of Tesla vehicles. 

1. Mileage

Many Tesla models can last about 805,000 km. But like in the case of other vehicles, high mileage can quickly lower a Tesla’s value. Tesla vehicles’ depreciation rates are often based on a 12,000-per-year mileage. As a result, the value of your Tesla diminishes faster if you drive over this mileage rate. 

2. Features Included in the Model

One reason Tesla can retain its high resale value is its integrated software that can be upgraded even in older models. All Teslas come with an autopilot program, but models equipped with the Full Self Driving technology tend to depreciate slower. 

Full Self-Driving (FSD) is an added paid feature that enables Tesla cars to perform more sophisticated automated functions such as self-navigation along a mapped route, assisted steering, braking, accelerating, and smart vehicle summoning. Models with additional FSD capabilities hold or increase their value, especially in trade-ins.

3. Maintenance History

How well a Tesla vehicle is maintained directly influences the resale value of a particular Tesla vehicle. Fortunately, Tesla cars need little maintenance compared to combustion engine cars. Teslas do not require oil changes, replacement of air filters, and timing belts. Tesla owners would not need to deal with transmission problems or fluid level issues. 

The car brand’s reliability and low maintenance requirements help reduce its depreciation rate. That being said, regular maintenance is essential for the vehicle’s health and slowing down its depreciation rate.

4. Condition of the Battery

Batteries enable Teslas to run, so battery condition plays a huge role in determining the depreciation value of Teslas. The Tesla battery is usually long-lasting and degrades at about 10% every 100,000 every 161,000 km (100,000 miles). Damaged or aged batteries lower the resale value of any Tesla car.

5. Market Desirability

Compared to other car brands, Tesla enjoys high market desirability. This car company has done a great job marketing its cars as luxurious, revolutionary, and environmentally friendly. Tesla is also in high demand because of its slow production capacity. Tesla buyers must wait months before the delivery of their new car, which helps improve the resale value, effectively slowing their depreciation rate. 

6. Warranty

Generally, the longer the warranty, the less the car will depreciate. All Teslas have a Basic Vehicle Limited Warranty that covers four years or 80,000 km, whichever comes first. 

However, Teslas that have the New Vehicle Limited Warranty can depreciate slower. 

The New Vehicle Limited Warranty includes the Basic Vehicle Limited Warranty, the Supplemental Restraint System Limited Warranty (vehicle coverage for five years or 100,000 km, whichever comes first.), and the Battery and Drive Unit Warranty (vehicle coverage for eight years or 160,000 km or higher depending on the model.)

7. Condition of the Vehicle

A Tesla car’s general condition is a determining factor when answering this question. Internal or external damage to a used Tesla directly decreases the reselling value. Thus, prospective buyers should inspect a used Tesla thoroughly before purchasing. Ideally, a qualified and experienced technician should conduct the inspection. 

8. Amount of Previous Owners

When it comes to previous owners of Teslas, the general rule is the fewer is better. Cars previously owned by many people depreciate in value faster because they pose a higher risk of poor maintenance.


How Fast Do Teslas Depreciate in Value?

Teslas generally depreciate slower than internal combustion engine vehicles and other electric cars. Reports indicate that depreciation rates for Tesla models after three years of usage are as follows:

Tesla Model X – 33.9%

Tesla Model S – 36.3%

Tesla Model Y – 22.9%. 

Many Tesla Model 3 cars have depreciated only about 10% in value after the first three years of purchase. This slow depreciation rate is due to low maintenance requirements, long-lasting batteries, and the high demand for Tesla. 

Can You Slow a Tesla’s Depreciation Rate?

You can slow a Tesla’s depreciation rates by keeping the kilometres low, maintaining it regularly, and following the recommended driving and charging conduct. You must refer to the owner’s manual for tyre rotations, air filter changes, and other repairs. 

Avoid sudden brakes and acceleration and minimise the use of superchargers to prevent the battery from degrading faster.

Can a Tesla Increase in Value?

Many Teslas depreciate over time. However, some used models can increase in value due to high customer demand. Used Tesla Model 3 and Model Y cars can potentially gain value during trade-ins because Tesla’s car supply cannot meet the current demand. 

Used Tesla vehicles equipped with FSD capabilities can also appreciate in value because the FSD technology is highly desirable amongst prospective buyers and Tesla enthusiasts.


Do Teslas Hold Their Value More than Petrol and Diesel Cars?

Tesla’s resale value after five years is better than most gas-powered cars because of mileage range, customer demand, and fuel economy. Gas-powered vehicles also depreciate up to 60% in the first five years, but Tesla’s depreciation is lower than this. 

The company has marketed itself well as a leading luxury car brand, but its manufacturing process is slow. As a result, the Tesla car demand is high, but the supply is low.


Which Tesla Models Hold Their Value the Best?

The Tesla Model 3 comes on top when it comes to the lowest depreciation. Based on recent calculations, the Tesla Model 3’s 1-year depreciation rate is below 6%. Comparatively, Tesla Model Y (22% depreciation rate ) and Tesla Model X (18% depreciation rate) have higher depreciation rates. 

However, the Model S can have the best resale value because some older Model S cars can cost more than the recent models due to long delivery wait times. 


Will Second-Hand Teslas Be Worth More in the Future?

Not all second-hand Tesla cars will be worth more in the future because they will generally depreciate from the moment of purchase, just like other vehicles. However, models like the Model Y and Model 3 can potentially increase in value during reselling or trade-ins due to high demand and low supply. 

Waiting for a new Tesla can take months or even years, so Tesla enthusiasts may be willing to pay more for used models. Furthermore, Teslas with FSD (Full Self-Driving) capabilities may be worth more when resold in the right market. 

Related Questions

Will my Tesla Last 10 Years?

Not only will a Tesla hold in value, but it can also last ten years, provided you maintain it correctly. Although the Battery and Drive Unit Limited Warranty lasts only eight years or 160,000 km or more, Tesla claims their battery can last from around 482,000 to 805,000 km

What are the Tesla Maintenance Costs?

The maintenance cost for a Tesla per year ranges from $530 to $1,200 AUD. Basic maintenance includes tyre rotations, brake fluid tests, HEPA filter changes, and cabin air replacements. The final cost is highly dependent on the specific Tesla model.  


Jimmy Mitchell is an electric vehicle aficionado who has been following the space since Tesla first hit the scene. A longtime proponent of sustainable transportation, Jimmy was one of the first to buy a Tesla 3 as soon as it came out. He loves nothing more than helping others learn about and enjoy the benefits of electric vehicles. When he's not evangelizing about EVs, Jimmy enjoys spending time with his family and travelling throughout south east asia

Do teslas hold their value