Before we dig into the whole “What do you mean”, let’s take a stroll down memory lane.
The first version of PayPal was published back in 1999 and as far as I remember Elon and his first X.com joined PayPal around the first half of 2000. It was a huge success and personally, I am super stoked that Elon was able to make a decent amount of money on PayPal when he sold it to eBay just a few years later. This, i guess, was the stepping stone for a human being to almost do what he wanted to do, and not be totally limited by money.
In 2003 Elon Musk founded Tesla Motors in San Carlos California and at the time (I was living in Denmark) nobody believed him. The idea of mass manufacturing electrical cars was just not possible, or so most people thought. Some of the first experiences I had with Tesla was back in 2014, and I absolutely loved the Model S. Finally someone who would step away from the standard, finally someone who wanted to take a chance on modernizing the car and stuffed all the coolest technology in them, even though the biggest brands of the world predicted that it would not hold up.
But it did and it does.
Tesla manufactured 1.84 million cars in 2023 and to be honest, that’s a lot of cars from a manufacturer that has only been on the market since 2012. I say 2012, cause the speedster wasn’t really build on the same concepts as those we see today.
I bought my first used Tesla (While living in the USA) in 2022 at a time when prices were going up, and the market was short on the Model 3, and to make it even worse I wanted a Long Range in Red. From day one, both my wife and I loved the car, yes there were a few things that did not work as well as today, but even back then we’d never been more happy about a car (And we’ve had a few). The handling, the power, the comfort, the technology, the convenience, and the fact that we didn’t have to fuel it up once a week, except for changing it when coming home.
Let’s start looking at the financial aspects and get a bit closer to the why and how, but keep in mind, this is my personal opinion and it’s the facts related to my personal experience.
As you know, I bought my Tesla Model 3 back in 2022 at a time when the market price was relatively high. Used Tesla Model 3 was around 40K (One year a low mileage). We bought ours in Carvana at the price of 64K.
Before you bash me with MRSP and other funny stuff, the MSRP back in 2021 was around 56K plus fees, sales tax, market adjustment, etc. And yes, the market adjustment was not in my favor when I bought the car, even though it was half a year old and had 6K miles on it, but that’s life.
So, the MSRP was 56K in 2021 and 2022, then in 2023, Elon decided to lower the price, and the MSRP was cut by almost 10K lowering the MSRP to 46K and since then it’s been going downhill for several reasons. From January 2023 to January 2024 Tesla Model 3 has dropped more than 29% (Used cars) resulting in ridiculous used prices.
My Tesla Model 3 Long Range is worth around 25K at the point where this post is written.
I’ve had the car for a bit more than 2 years and so far I’ve lost almost 40.000, this is insane!
If I were to compare this with my Toyota Tundra, it gets even worse. In 5 years I’ve lost close to 20K on the Tundra, that’s 4K a year compared to the Tesla’s 20K a year.
Now, half of this is because of the market, the market was high when I bought the car and it is right now very low, but low especially for used Teslas. The other half of the reason is Tesla dumping prices.
I consider myself a very reasonable person, I understand how evolution works, and I understand that if you invest in all the new smart stuff you will pay a price, that’s just how it works. And I pay this price gladly to support people like Elon Musk while he is running around saving the world and/or trying to make it better.
Until recently I most likely would not even have written this post, but just around April 1st., 2024, Elon announced that all Tesla owners would be granted one month FREE FSD. You may say, “Well, that’s amazing” right, but to be honest it’s like rubbing it in my face. I really want FSD, but I’ve never found it reasonable to put down 12K for it, to be honest, it should have been a part of the car at the price of 63K, but it wasn’t.
I feel like an idiot, I’ve lost 40K in two years, and my Tesla doesn’t even have FSD (One of the main reasons why Tesla is different). The manufacturer is waiving this cool feature in front of me, and really I might have bought it at this point if it wasn’t because of the 40K, that 40K will stick for a very long time, and it is the reason I bought a Toyota Sequoia one year ago, and it’s the reason why I am not ever going to purchase a Tesla again.
And my fear is, a lot of people also feel like idiots and would not go check out a new Tesla, due to the fact Tesla hasn’t taken any responsibility and just left the owners in the dust.
This brings me to the future, why is every dealer on planet Earth telling their customers that buying a Tesla is a bad investment, why is Elon Musk now forced to spend money on advertising, why are the Tesla sales numbers falling? Last year around this time Tesla sold 60K and this year only 53K, and it gets worse. Usually, the numbers for Tesla are up 40% a year (If looking at previous history from Month A 2022 to Month A 2023, etc.), but right now the numbers are staggering. You might ask, isn’t that the market? No, in fact, the market has not stagnated or gone down EVER for the past 3 years.
What I am suggesting is Tesla compensate their customers to keep them loyal, cause right now they are looking at Tesla owners wanting out and not coming back for another Tesla. Offer owners free FSD, and offer owners a decent trade-in price when they actually consider a new Tesla. Not doing this, will eventually result in a bigger drop in Tesla market shares.
To you, Elon Musk – It’s been a nice run, and I still admire your thinking and your achievements, I love the Tesla concept, but come on. How did you let this happen? No car maker has ever seen a depreciation as high as this, you are unbeatable in the wrong way.