Are Tesla Cars A Good Investment? (We Checked)

As with any investment of this magnitude, a motorist is going to want to get the most bang for their proverbial buck.

Since Tesla has emerged as the leading option for those seeking a luxury electric vehicle, there have been a number of follow up questions as to whether these cars are worth that potential investment.

That’s where this guide aims to clear the air.

Let’s take a closer look so potential Tesla buyers are given all of the tools that they need to make a truly informed decision on whether buying a Tesla can be viewed as an investment.

Are Teslas cheaper over the long run than gas-driven cars?

While there are a variety of factors to consider, there is one fact that will always remain. The Tesla driver is going to enjoy a significant amount of savings as compared to someone who drives a gas powered car.

This is a conversation that is only growing louder, as the war in the Ukraine has pushed United States gas prices to places that few have seen before.

There is no debate to be made otherwise when it comes to these savings, either. The answer is yes and there are no real caveats to offer. It all starts when you head to the company website to find out more about a potential purchase.

According to the company, a Tesla buyer can expect to enjoy six year gas savings of over $6,000.

Obviously, it should go without saying that these savings are going to grow if the driver holds onto the vehicle for a period of longer than 6 years. The savings decrease if the car is sold or the driver moves on before the six year mark arrives.

The amount of savings will depend on the amount of mileage that the driver is putting on the car. Tesla makes their calculations based on the driver putting 10,000 miles per year on the vehicle.

Those who drive less or more will notice that their savings fluctuate based on their usage.

The cost of electricity also plays a role in the amount of savings that a Tesla driver enjoys.

How many cents is the driver paying per kilowatt hour and how many miles are they putting on the car? This answer will vary greatly from reader to reader.

While the specific amount of savings are going to have variance, the gist remains the same.

Tesla drivers are able to save on their gas bills and during a time when Americans are paying far more to fuel their vehicles than they accustomed to, this is nothing to sneeze at.

The efficiency of the Tesla and the gas powered vehicle in question must also be considered.

How quickly do Teslas depreciate compared to other electric cars?

Electric cars have developed a bad reputation for depreciating quickly but Tesla seems to have conquered this issue. Any potential Tesla owner who is worried about the depreciation of these vehicles can enjoy the peace of mind that comes with knowing that they are in good hands.

These cars do not depreciate as quickly as other electric cars and the numbers are staggering.

Other legacy automakers are doing their best to follow suit but they have yet to enjoy the same success. To understand how Tesla has triumphed where other companies have not, there is some key background that must be passed along.

Electric vehicles are much like the first batch of laptops and smartphones. Initially, they were a great purchase, but buyers were left frustrated because new innovations would come along regularly.

With electric vehicles, constant advances are being made in battery technology that make older vehicles obsolete not long after they have been driven off the lot.

So how are Teslas holding onto their value, while the other vehicles seem to be struggling mightily to do so? The answer is not nearly as complicated as some readers may think. There is nothing that the company is doing that is easily replicable.

As it turns out, high demand leads to a severe decline in depreciation.

Since there are always lots of people out there who want to drive a Tesla, the resale value on these electric vehicles remains much higher than it would for other legacy automakers.

The company does not lean into this demand in any meaningful way, either. There are no tax rebates to speak of. Each customer pays a premium for new models and those who look to purchase used models are still going to spend more than they would for a used electric vehicle from a different automaker.

That does not mean that things will remain the same forever.

As the electric vehicle continues to stabilize and technological innovations become less commonplace, the Tesla will not continue to enjoy such a marked advantage.

When electric vehicles have become the norm, these differences will eventually start to flatten out.

What Tesla model retains its value the longest?

When it comes to this question, the Tesla Model 3 is the gold standard, although Teslas retain their value on the whole far more than most other vehicles.

According to analysts, these vehicles are the first car to experience value appreciation without being a collector’s edition or an antique.

At the moment, supply and demand have not begun to overlap.

There are far more prospective Tesla buyers than there are available vehicles. This creates an environment where the vehicles as a whole are retaining more value than expected. While this may not seem logical to most, the Tesla Model 3 will cost roughly the same, whether it is new or used.

The data when it comes to the aforementioned Model 3 is staggering.

These cars retain their value five times better than other electric cars.

As far as other vehicles are concerned? The Model 3 retains its value four times better than the traditional gas powered vehicles.

Tesla’s full self-driving capability also helps immensely in this regard. This technology is a game changer and the level of autonomy that drivers will be offered allows these vehicles to stand alone from a depreciation standpoint. Experts are expecting Tesla Model 3 and Model Y vehicles with full self drive capability to sell for double the price within the next five years.

The buying experience that Tesla has to offer also provides a rush that other companies cannot compete with.

Those who have visited Tesla showrooms in the past can attest to this. These showrooms are located in ritzy parts of town, with displays that are sure to attract a sizable amount of attention.

Tesla showrooms are also forbidden from having the same pushy sales personnel that you would normally expect.

Since these vehicles are essentially selling themselves, it is easy to see why value remains so high. These vehicles are reliable trendsetters and allow the motorist to feel as if they are doing their part to combat the looming climate crisis, making their continued value a no brainer.

Can buying a Tesla be considered an investment?

The short answer here is yes. The longer answer is that they should be considered a long term investment, not a short term one. No investment comes with guaranteed returns, either.

This is a “yes” that comes with plenty of caveats.

In the world of investment, there is no such thing as a sure thing. Anyone who believes that they are going to be able to buy a Tesla today and sell it for double the price in a few years must have a strong belief in the marketplace bending to their whims. It’s a bet on the future, as opposed to a slam dunk.

While there is enough information on hand to make this seem like a sound choice, the investor must be as realistic as possible. Of course, there is another way of looking at this.

The car does not have to serve as an investment in the traditional sense.

A traditional investment is something that you can buy today for $1 and sell tomorrow for $2. An investment of this nature is a bit different.

The Tesla can be a sound investment in the sense that you will save a great deal of money over the long haul.

The amount of savings will depend on a few variables, though.

For those who are putting a significant amount of mileage on their vehicle, the Tesla is going to be an excellent investment. They will be enjoying sizable savings each year, as they are no longer beholden to the costs that are associated with traditional gas-powered vehicles.

The same goes for anyone who plans to hold onto their Tesla for a significant length of time.

The amount of savings increases as time passes and the vehicle is not likely to experience a marked depreciation in value. Take the time to thoroughly consider your own driving habits and plans for the future before considering one of these vehicles as a potential investment.

Sources

A frugal review

Real reason why electric cars depreciate faster

Unlike most auto purchases, Teslas hold their value

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