Elon Musk has made quite an important claim about Tesla vehicles today; the CEO said that Tesla’s vehicles are now ‘appreciating assets’ due to their self-driving capability.
Except for a rare few exceptions, cars are depreciating assets for the most part.
Aside from a few supercars and rare models, passenger vehicles lose their value fairly quickly, but Musk now claims that it is not the case for Tesla vehicles.
He said during a podcast (embedded below) today:
“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.”
Musk was talking about the fact that new Tesla vehicles are now built with a new Full Self-Driving computer that he believes complete Tesla’s hardware suite needed to deliver full autonomous driving through future software updates.
“The cars currently being produced, with the hardware currently being produced, are capable of full self-driving.”
Even though Tesla sells this system as an option in its vehicles for $5,000 now (since yesterday’s option changes), he believes that the value will be greater and Tesla’s vehicles will actually gain in value over time.
Musk made the comment during a podcast about artificial intelligence with Lex Fridman:
Elon has made quite a few incredible claims over the years and we are sort of getting used to it, but this one still surprises me for some reason.
It’s not completely out of the ordinary since some cars in the past have indeed gained in value, but we can’t compare those cars to what Elon is saying here.
Those cars have gained in value due to scarcity. Tesla plans to make millions of those vehicles. Scarcity won’t be a factor here.
I suppose he believes that software upgrades will increase the value beyond the $5,000 that Tesla is charging for the FSD package right now.
That would be surprising to me.
The only way I see Tesla vehicles not depreciating is if they become revenue generating assets, which could be the case with ‘Tesla Network’, which is supposed to be Tesla’s planned autonomous ride-hailing service.
I guess it’s not impossible, but it would be a giant reversal from Tesla’s current depreciation, which has been accelerating lately due to Tesla’s constant price changes.
What do you think? Let us know in the comment section below.
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