Elon Musk’s biggest lie has probably been that Tesla vehicles are now “appreciating assets.” Not only are Tesla vehicles depreciating at a faster rate than the rest of the market, but the lie was also connected to Musk’s pie-in-the-sky self-driving predictions.
In 2019, CEO Elon Musk claimed that Tesla vehicles became “appreciating assets”:
“Buying a car today is an investment into the future. I think the most profound thing is that if you buy a Tesla today, I believe you are buying an appreciating asset – not a depreciating asset.”
Except for a rare few exceptions, cars are depreciating assets.
Aside from a few supercars and rare low-volume models, passenger vehicles lose their value fairly quickly, but Musk claimed that it is not the case for Tesla vehicles even though they are produced in high volumes.
Musk believed that as Tesla pushes increasingly more advanced autonomous driving features through over-the-air updates, the value of its vehicles would increase – leading to be capable of becoming robotaxis.
More specifically, the CEO tied Tesla vehicles becoming “appreciating assets” with Tesla increasing the price of Tesla’s Full Self-Driving (FSD) package over time, which Musk said would then increase the value of existing Tesla vehicles.
Musk told me in 2019:
There’s some logic to that since it would be like increasing the price of the new vehicles, with the FSD package, which should affect the value of used vehicles.
Musk said that Tesla would continuously increase the price of the FSD package as the system gets better.
It was true for a while, but it hasn’t been true for years. Here’s a chart of Tesla’s FSD prices over time:
That’s despite Musk continuously claiming that FSD was getting better and more “mind-blowing” with every update.
The CEO even said after the first price decrease in 2023:
“Yes, I think, over time, the price of FSD will increase proportionate to its value. So, with regard to the current price as a kind of a temporary low.”
Yet, Tesla slashed the price by 33% again just a few months later. These lies and failed promises have resulted in Tesla vehicles not only not appreciating in value, but they are also depreciating faster than most vehicles.
Yesterday, we reported that used car market data shows that used Tesla vehicles are losing value at 3 times the rate of the rest of the market.
Electrek’s Take
Other than the actual data pointing to Tesla FSD being at roughly 500 miles between critical disengagmenet, this should be the clearest indicator that Tesla is not going to deliver on its self-driving promises for its consumer fleet.
Tesla itself devalued FSD and it devalues it even more when you trade-in your Tesla vehicle.
FSD is just never going to deliver on what Musk said it would, which is why Tesla is pivoting to an internal geo-fenced fleet of robotaxis in Austin.
It’s really starting to feel like the house of cards is finally falling.
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