More efficient manufacturing, falling battery costs and intense competition are lowering sticker prices for battery-powered models to within striking distance of gasoline cars.

  • ShepherdPie@midwest.social
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    5 months ago

    What issues with depreciation? Can you list actual models and prices to back your claim because it seems like most people are bitching about the high prices of EVs.

    • partial_accumen@lemmy.world
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      5 months ago

      Can you list actual models and prices to back your claim because it seems like most people are bitching about the high prices of EVs.

      I’m a BEV advocate, but even this is an easy one. In 2022 a Tesla Model 3 LR cost $52k while you can get the exact same car new today for $47k. This is even just MSRP. That $47k car is even $7500 cheaper for most people.

      Tesla Model Y LR from the same year, 2022, is even more dramatic. It was $67k and now costs $49k.

      • vividspecter@lemm.ee
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        5 months ago

        I don’t really see this as a bad thing if we want people with lower incomes to get off ICE cars, although I can see how people who paid those prices would be annoyed. Expecting cars to hold their value or depreciate slowly seems overly optimistic in general, as they are inherently depreciating assets and should never be seen as investments.

      • ShepherdPie@midwest.social
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        5 months ago

        That’s not depreciation that’s just a response to the highest interest rates we’ve seen in 20+ years and dwindling sales numbers.

        This is no different than the monthly sales we used to see on every car prior to COVID but this was somewhat obscured by the nature of the dealership model and having to haggle on the actual price of the car.

        • partial_accumen@lemmy.world
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          5 months ago

          That’s not depreciation that’s just a response to the highest interest rates we’ve seen in 20+ years and dwindling sales numbers.

          Of course its depreciation. Its the very definition of depreciation. An asset was worth more at a point in the past than it is today. The reason for the value loss is irrelevant.

          • ShepherdPie@midwest.social
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            5 months ago

            The definition of depreciation is:

            a reduction in the value of an asset with the passage of time, due in particular to wear and tear.

            The MSRP going down isn’t depreciation as you’re referring to a brand new item that you haven’t even purchased and hasn’t been used.

            Prices shot way up during COVID and now they’re coming back to reality in response to higher interest rates and slowing sales across the entire automotive market, not just with EVs. Housing prices have come down too but again that doesn’t mean depreciation, it’s just a response to interest rates being 2-3x higher than they were just a couple of years ago and sale prices adjusting accordingly (you’re still paying more overall with interest).

            The context here is that “people are concerned about depreciation,” but why would people be concerned that they’re able to buy these cars new at a slightly cheaper price to begin with? Most people prefer to pay as little as possible for things, which is the whole point of companies having a sale on their products.

            • partial_accumen@lemmy.world
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              5 months ago

              The definition of depreciation is:

              a reduction in the value of an asset with the passage of time, due in particular to wear and tear.

              Look at the first half of that sentence. Thats the same idea I posted with my definition:

              " Its the very definition of depreciation. An asset was worth more at a point in the past than it is today."

              You’re getting hung up on the “wear and tear” thing because that’s a regular way that cars lose value over time, but its not the only way. A Picasso painting continues to slowly deteriorate over time but its value continues to go up because there is a market for people wanting his paintings. This would be an “appreciated asset” even though it still gets wear and tear.

              The context here is that “people are concerned about depreciation,” but why would people be concerned that they’re able to buy these cars new at a slightly cheaper price to begin with?

              The context here is that “people are concerned about depreciation,” but why would people be concerned that they’re able to buy these cars new at a slightly cheaper price to begin with?

              Because many people buy cars with the expectation of only owning them for a couple of years and then selling them for something newer. If the value of their EV dropped by 50% in two years of ownership instead of dropping perhaps 20% of specific ICE cars, the they would be concerned about the depreciation. Even people that don’t sell so quickly want an asset that retains its value in case it gets totaled (and they need to buy a new replacement) or in case they need to sell it for emergency liquidity.

              • ShepherdPie@midwest.social
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                5 months ago

                Okay assuming we do go with your definition, the 2019 Model 3 LR was $36,000, meaning they’ve appreciated by $11,000 over the last 5 years. Once again this disproves your point.

                The 2022 numbers you picked were the absolute peak of COVID era pricing, but they’re still selling for more than they used to, meaning they aren’t depreciating at all.

                • partial_accumen@lemmy.world
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                  5 months ago

                  Okay assuming we do go with your definition, the 2019 Model 3 LR was $36,000

                  I’m not sure where you’re getting $36k for the price of a 2019 Model 3 LR (in 2019). This link seems to show it at $43k, but the real price is irrelevant to your point, so I’ll agree with your $36k for this discussion.

                  meaning they’ve appreciated by $11,000 over the last 5 years.

                  If you can find someone that will give you $47k for your 2019 Model 3 LR, then yes. The market value of an asset isn’t determined by guidebooks, but by what someone will give you for it if you’re selling it, or what you have to pay for it to buy it for yourself.

                  The 2022 numbers you picked were the absolute peak of COVID era pricing, but they’re still selling for more than they used to, meaning they aren’t depreciating at all.

                  I have a 2022 Model 3 LR. I have zero faith that today anyone would give me what I paid for it even if it had zero miles on it. Why would they when they could buy the 2024 for less money? What I paid for my car is irrelevant to what it will sell for today.

                  If you’re looking at whether your asset appreciated or depreciated, there are only two numbers that matter:

                  • What it original cost you to buy the asset.
                  • What someone will buy the asset from you today.

                  If someone will pay you more than you paid, that asset appreciated. If the best you can do is someone paying less than you paid for it, that asset depreciated. That’s the literal definition of appreciation and depreciation.

                  • ShepherdPie@midwest.social
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                    5 months ago

                    Dude, you’re all over the place. You’re now comparing used car prices to new car prices when previously you were comparing new car prices from prior years to new car prices from today.

                    If I go out and buy a 2024 Model 3 LR for $47k, how much depreciation have I incurred? Previously you said it’s at least a few thousand dollars because they cost more in 2022, but now you’re saying it only matters what today’s purchase price is compared to what I could sell it for used. You can’t have it both ways.

    • eltrain123@lemmy.world
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      5 months ago

      Depreciation is a concern. If you buy something while the technology is improving, the resale value is going to tank as the technology matures. What you have to look at is what the cost is per mile you drive, minus the cost you can sell it for. But, fast-forward another 5-10 years and consider what an ICE vehicle will sell for on the used market. When EVs reach maturity, you won’t be able to give an ICE vehicle away without paying to dispose of it. We aren’t there yet, by a long shot, but it’s coming.

      Just make sure you time it right.