[ericabiz]

"Elon Musk previously guaranteed the resale value of the Model S. Announced in April 2013, those who financed a Model S are allowed to return the vehicle after three years for 43 to 50 percent of its sticker price — just in time to buy a new Tesla vehicle."

I wonder why those numbers are so low. For reference, I recently leased a 2015 Mercedes C400, and the residual (programmed into the lease) is 61% after 3 years. When you're looking at a $70,000+ car, the difference between 43% and 61% is pretty dramatic.

I'm wondering if Musk/Tesla believes that the technology will change so much that in 3 years no one will want the older Teslas, or just that people who want to buy a Tesla will not care about residual value. Perhaps both?

[jasode]

Not sure why you're comparing a lease residual to a Tesla buyback.

The lease residual is a price for the buyer to buy the car outright.

The Tesla resale guarantee is a price for the buyer to sell the car.

I wouldn't expect those % figures to be the same. I would expect the buy-to-own price to be higher than the sell-back price. Same concept as trading in an old car to the dealer for one price while the same dealer turns around and sells that used car to another buyer for a higher price.

Btw, when I turned in my car after a 36-month lease, the leasing company immediately offered to ignore the lease residual specified in the contract in an effort to entice me to buy the car. They immediately lowered the price because the leasing company didn't want the car back!

[dweinus]

From a buyer's perspective though, a guaranteed 43% retention in value vs a gamble on 61% seems like a logical trade-off.

[duckingtest]

>I wonder why those numbers are so low.

The difference is probably battery degradation.