Why Tesla sales have tanked and why the price will keep dropping... 

There are plenty of people on Carsales trying to sell 2 to 3 year old Teslas for more than new ones. Perfect time for a Darryl Kerrigan quote: “Tell him he’s dreaming”.

Sorry but I have to chuckle at the description of cars being assets, except for some collectable classics all cars are liabilities that will always lose you money in the long run.

"When you are looking at what you are getting inside this car..." Shows an image of an interior devoid of features. Brill.

Early tech adopters pay a premium. Lease buyers pay the highest premium. Look within your choices instead of blaming others or the market.

Paul you are regurgitating what we told you 7 years ago. Only difference is that we had the fortitude to say electric cards are shiiite.

Remember when people bought plasma TVs for $10K. Many years later the TVs were selling for $1K. Tenth of the price of early adopters with much better panels. EVs will continue to drop in price and the tech/battery will be substantially better. Chinese cars are so much better than they used to. Expect them to dominate the market. Especially in an economy where cash is tight.

Thanks Paul. Your balanced take on both Tesla and EVs more broadly is appreciated. I admit that I am financially rather naive. I can appreciate that Tesla's fluctuating prices have caused some difficulties for existing owners in relation to leasing arrangements and depreciation, but in good faith it is difficult to see these issues as more than unfortunate side-effects of a more broadly positive trend. EVangelists have been telling us for years that ongoing technological development, manufacturing economies of scale, and increased competition would combine to drive EV prices down over time, closing and perhaps eventually eliminating the purchase price gap between EVs and comparable ICE vehicles. To a considerable extent, that narrative has been borne out, but even at the time it necessarily implied high levels of depreciation for EVs currently on the market going forward. That is to say, to a certain extent this was a foreseeable outcome that perhaps should've factored into purchasing considerations at the time. It should also be recognised that ICE buyers aren't protected from these disruptive developments either. Toyotas have historically retained more of their value over time than many other marques, yet as the superannuation ads are forever reminding us, past performance does not guarantee future results. In the context of ongoing EV disruption, how confident can one be that the future depreciation curve of an ICE or even Hybrid Toyota purchased today will look anything like that of one purchased ten years ago? I think the answer is not very.

I recall in the late 70's and 80's, ALL European cars would drop 35% in their first 1-2 years of ownership. This was the norm. Tesla is shaking up the market by being competitive with all other manufacturers. Dropping prices as cost of manufacturing drops, and dropping prices to destroy the margins of others. I'm hoping for further price drops too, until it becomes a no brainer to buy an EV.

Meanwhile: number one selling car in the world is Tesla Model Y followed by Corolla. 😊

It's quite ironic how old ICE vehicles typically fitted with a naturally aspirated V8 or diesel inline 6 appreciate in value while these over hyped allegedly state of the art vehicles depreciate like a hot knife in butter.

Tesla had enjoyed the time when no one competed with it in the market. Now is the time to go face the reality 😂

“It’s actually incredible value for the money when you look at what you’re getting inside this car”…. Then proceeds to show pic of a stark, empty interior with nothing but a steering wheel and one screen off to the side 😅

Why do people has 2 year leases when that where you lose the most money on cars. Of course you will be out of pocket you have to do longer leases of around 3 to 5 years to get the most out it and get value or buy outright and then see how much you lose.

Lease (fleece) a heavily depreciating liability and then selling to a dealer equals a recipe for being financially poor your whole life. Crazy!

Remember they "deduct" about $4.5K due to fuel savings over a 5yr period, so the drive away cost is actually $60K. A bit of a scam or con.

1. Car is not an asset unless you have a special car. It is going to depreciate. 2. if you are an early adopter, price is going to go down once it hits mass market. 3. This trend is nothing new and nothing worrying, please read rogers adoption curve. This is a well expected pattern.. 4. The price reduction is to counter competition. Also, potentially targetted towards PHEV like Rav 4 and Sealion 6. In the long run this is still a better bet than an ICE given the issues that arise with age.

30k loss after 2 years is nothing to scoff at. I for one could buy 2 cars that would work for 10+ years with that money...

Car Expert and you bought a Tesla 🤷‍♂️

Surely if you had a 5 year lease then you would have been better off? Highest depreciation is in the first 1-2 years even before the mfg decreases the list price. The price will continue to drop but the rate or size of the drop should slow.

Because several Chinese car companies have improved significantly over the years. While Tesla see little change, and it's lack of physical stalks/buttons a very user unfriendly.

I got a quote for a model 3 novated lease for 5 years. $190 per week. Total repayments over 60 months is $49k on a $62 k car. Tax benefits are insane $17 k balloon payment. And don’t forget that $190 per week includes 10 tyres, 5 years rego and comprehensive insurance.

With the $20k price reduction and FBT exempt and no stamp duty and two years free rego, I couldn't resist. I never thought I could afford a Tesla, but at this price I wouldn't consider anything else.

People who have high mortgages don’t buy new cars. When interest rates drop they will start to sell.

Tesla Mulgrave was packed last week delivering cars, mostly Y's. Guess we'll wait for the numbers to come out to see.

Keen for the EV5 to come out and see how that compares with the Y. Novated Leasing is a good target, but would a more stable brand like Kia give you confidence to do a 3 year term?

Can't believe you sold your car for $44K. So lucky. Around Sydney, can't give them away at $30-$36,000 depending on k's driven. Also agree, beware cars in white as a lot of used Hire cars now starting to come to market and with some having been very badly treated.

A mark of a good journalist - transparent, honest if if it hurts you personally. Thanks Paul!

In Tullamarine (Annandale Rd) there are approx 600 EV Mercedes sitting in a carpark… waiting for someone to buy them.

Great update. I was in the exact same situation as yourself. I ended paying out my 2yr lease early, and thankfully got out slightly ahead after wholesaling it off. However I won't be lining up for another ev until the charging infrastructure is upgraded and the pricing war stops. Tesla have shot themselves in the foot with their approach to pricing.

My partner and I are early 30s, Currently own a model Y, paid cash, no intention to sell within the next 10 years, so price reductions don’t bother us in the slightest. What we are looking at doing, with the prices coming down so often, is offloading our other car (petrol) and picking up a 2nd hand model 3. Agree with what you’ve said regarding value, such great vehicles.

Thanks for sharing Paul. As you speak from experience your points are far more credible. I have a Y too, a LR, and it’s a great car, which is great that you acknowledged this, and that your main issue is more with the Tesla business model. Are there any examples of ICE vehicles you could do a similar piece on? How are the residuals on the Raptor?

I have a 4 year lease on mine, I have just completed my first year. I have the option to give the vehicle back at the end yet my balloon payment is only 27k. I will decide at the end whats the best option for me. No regrets, its a brilliant car. I charge it at work for free, no servicing costs etc. Plus some of the vehicle is paid for out of my tax. I only had the option of this or an electric MG as everything else has a year delay.

I've done mine on 1 year leases and did another 1 year in March. After each year the residual is reducing about what I've paid in total for that year, and that includes running the car. I don't necessarily view it as a major loss in money until i decide to get rid of it, which i don't intend to any time soon. At least with leasing it I'm able to take advantage of no FBT and as well I wasn't a fan of not having stalks. Gear selection on screen is shit (in my view) and I prefer having stalks.

$55000 and its great value? Are you joking! Absolute madness. All those EVs stacking up around the world. They are obviously not selling.

So in Novated lease, at the end of your lease term, can't we return the vehicle to the leasing company without paying the balloon payment or refinance for the remaining value? That's what I'm doing with my Nissan Xtrail atm. Planning to give it back after 3 years and get a new one.

Thanks Paul, the missing part of the analysis is that if you are buying any asset that has a falling new price, you benefit when you replace the asset, as your re-purchase price is also lower.

I love it how you are showing the Tesla interior while you are saying how "much you get for your money" :D Wow, a screen! Can I have an instrument cluster? -> nope absolutley not, unless you buy a model S/X for 2.5x more.

That's a great explanation of the market dynamics Paul. You've also highlighted why the FBT exemption is bad policy. Wealthy taxpayers are effectively being subsidised by poorer taxpayers to be first adopters of EV's. The big spike in sales of EV's has been driven by the market distortion of tax exemptions - which simply cannot last for the long term.

If this is going to be the case, do you think hybrid will keep their value compared to a fully electric car. I am considering a novated lease, will have to consider the Sealion vs the model Y thn... Thoughts ???

How about the huge range of cheaper EV's entering the market. Surely this has had an effect on Tesla prices too.

An historical lesson. Back in 1985 before Xmas, Sinclair Research (Essentially a computer company) were to release a much-anticipated personal computer: the Spectrum 128k. But they had bulk stock of the previous version the Spectrum+ 48k. Although announced in October 1985 they held off on the release of the 128k for Xmas of 85 in order to shift the older Spectrum+ 48k. The result was that many people just waited or bought the competitor product: The Commodore 64. The potential market for the 128 was lost and from then on Sinclair spiralled in profits ending in receivership in 1986. Just a commercial lesson in product release. Moral: Send your new product as soon as you can. Sell the older versions for a lower cost in lower cost markets. Maintain loyalty and value.

There are plenty of clowns out there trying to sell used Dual Cab Utes for about the same as new ones. Please tell them to stop being laughable. A 4 year old Ute, Navara STX, for example in 2018 or 2019 is worth no more than $25000 but fools would still list them for about $40000

Paul, with the New model 3 deleting the blinker stalks how do you indicate off a round about or do quick traffic turns?

Thanks for this mate, great transparency

novated lease customers don't see the fbt benefit - its taken by the leasing company and this is hidden in complicated novated leasing contracts that nobody can understand or explain. I challenge anyone to make a video explaining a novated leasing contract.

Appreciate the transparency in this video.

I was just considering a model 3 on a novated lease. This is great info to consider. Thanks!

Excellent video, paul! Please do more videos like this in the future.

Like other things, if you buy things immediately as the come out, you'll pay more money for it. I bought my Model Y earlier this month and saved SO much money compared to those who bought earlier in the lifecycle of this car in Aus

All you get inside the car is an iPad and a Steering Wheel.

Paul hit the nail on the head, new car costs are unpredictable since most are non-negotiable. The out-of-pocket expenses during the term of the lease seem very dependent on which lease company your employer utilize as their quotes vary wildly. It made more sense to me to purchase a PHEV outright than to lease, even considering the FBT savings.

What was in their first quarter results? About 40,000 more cars made than sold (globally I assume). Something like 90% of company income comes from 3 and Y, so they’ll need to make sure those models remain profitable.

I wouldn't touch one because of the flaky buttons replacing stalks, no radar cruise control, fridge-like interior, short range, and poor charging access.

Hi Paul. Great video with information of great value, Here in Portugal the situation is the same. I believe it's the same all over the World....Tesla managers still have some things to learn. Wish you the best

Their business model is quite unlike traditional auto manufacturers, they were selling at high prices due to high initial demand knowing that they won't recover much revenue through servicing or spare parts. Tesla now have more competition in the EV space and for many people the potential for saved fuel costs isn't that much of an incentive. Depreciation is significant for almost all vehicles particularly at higher prices , my Audi Q5 V6 diesel is now 5 years old and had a retail price of around 100K on the road with the heavy options on it when new, it has covered 50,000km and would likely be worth less than 35K now, that's cars. I was recently looking at the Mazda CX60 with my brother in-law, they have some big discounts around for those vehicles, seems everything is onsale again in the car world except maybe some Toyota's and some Ford Rangers.

I have a 5yr NL on a 2023 Black model y with white interior and my balloon is 19k at the end. I am already 1 year in. I know the price has dropped significantly and I’m not happy about it although when it comes to the end of the lease, I’m sure I will have plenty of people lining up to purchase it for 20k+ and then I’ll just start a new one on a refresh model - which will hopefully be a cheaper starting price than my first one. The tax savings and cost to maintain it is still a great option for me. I also have the option to give mine back to the lease company, so that’s always an option. I like the idea of selling it privately though to someone who had wanted a Tesla although never been able to afford one.

Great review of the situation, was unsure what your approach would be. We just bought a Y RWD with QLD Rebate for low 50k. Alot of car for the funds!

People who own a Tesla and say they don't care about the depreciation is just trying way too hard to make themselves feel better lol

Thanks for sharing

Falling prices frightens. Prices that have fallen are attractive.

Tesla digs a bigger grave as it continues to mass-produce cars

4:25 look what your getting lol nothing but a big screen

Great assessment - I really respect how you guys approach your work and the quality of your content.

I think the charging infrastructure didn't grow as expected. It's still a hassle. Plug-in hybrids are the best of both worlds right now. They are probably more eco friendly than teslas.

I'm 47yrs old. $73,000 biweekly and I'm retired, this video have inspired me greatly in many ways!!!!❤️

Inconvenient for current owners, but good to see a manufacturer dropping their prices in today's climate

I'm glad you made this video, I can recall when I was homeless and faced with many things in Life until $75,000 biweekly began rolling in and my Life went from A homeless nobody to a different person with good things to offer!!!!!❤️

Elon is nuts, why would he build a brand and client base, then stab them in the back like this? He needs to slow down supply to keep prices stable.

The advice to get a colour other than white is probably good advice. All of my life, I am older than you, the advice has always been to get white as it will be easier to sell in the future. Not everyone wants a blue or red car so white is the best bet. Funny how this has changed!

So what are you driving now in in interim ?

Paul, any novated lease will only make sence if the interest rate comes down. Even today all the FBT benefits are eaten away by the novated Leasing companies. So with a lower cost of acquisition and reduced interet rate will be the only option for any one to make some money on these. Other wise, i feel with the higher premium on insurance, the range anxiety and the flodded resale market, its a rough rime for tesla for some quaters.

May you review the new/facelift dmax

Another thing I find annoying, I know Tesla can supply a tow bar on these model y’s but there is no option in the website to order your car with one, and from watching some RU-vid videos it seems you have to order it through your car after you have purchased it ? But then need to take it back to the drop off points, where I don’t have one where i live in NQ

Very knowledgeable video, Good on you, Paul

Hey Paul. Great insight into this whole mess. My partner has been waiting for a very long time to get her first electric and first suv. We had finalised model y until Kia announced the EV5 and we liked your first look video of the car. The ev5 is something she liked mostly coz it’s got the dashboard as a regular car. However with the current price reductions with model y and Kia pushing back on the launch of EV5 for some absurd reasons at the 11th - we are now in a pickle whether to wait for ev5 or the my is really a worthy car? As an excellent auto journalist as well as a previous model y owner - would you choose the y over the ev5 even today and if so why? Thanks.

if teslas were free i would never have one

I’m a bit confused, would Tesla be selling more cars if they kept the prices at $70k? Are people buying a different brand car around $70k because Tesla prices are dropping, or are they still wanting to buy the Tesla but holding off until the prices stabilise? I know it’s probably impossible to precisely know, but just trying to understand your thoughts. Thanks.

Great informative video, thank you. I’m just about to buy a second hand 3 on a Bendigo Bank Green Loan 5.29% interest. No novated lease comes close, unless you self manage the lease.

I'm looking to buy a Model 3, how long would you suggest to hold out on buying regarding potential price drops?

1. All car sales are way down. 2. Tesla keeps implementing production efficiencies and reducing prices to reach a competitive crossover point with gasoline cars. Literally, an EV has 5% of the parts of a gasoline engine for just twice the price not 5% of the price.

No matter how good these cars are, people shopping with their wallets , lots new vehicles out there cheaper prices

A similar situation occurred in Pakistan, where car prices typically only rise, leading to widespread complaints about the constant price increases. Kia, however, reduced the price of the Kia Stonic by 25%. This unexpected move resulted in the Kia Stonic selling out for months, forcing the company to halt new bookings. An unforeseen consequence was that sales of other Kia models, such as the Sportage, plummeted. These models had been selling well, but customers feared further price reductions. Recognizing this issue, Kia quickly announced that it is not going to reduce price for the Sportage.

Thanks for this Paul. Of course this is tesla focussed, but what is happening with cars like Ioniq 5 and EV6 in terms of depreciation? Is the competitive market in EVs impacting Tesla product?

Simply put, Musk needs to drastically improve the build quality. The Model Y for $100,000 is Tesla taking the full piss.

Thanks for the honest update Paul

Thanks Paul, great informative video.

Do you have to buy the v=car after novated lease? can't you just return the car?

Lets hope it's the beginning of the end....

In December Elon Musk will be giving all those teslas away for free. This is why I don't care about resale values when buying cars, I buy the one that will make me the happiest, enjoy your Teslas until it's battery has 1meter range

Also this, IMO, - the car insurance premiums for Tesla EVs and other battery EVs are climbing to crazy levels. It costs much more to insure BEV compared to ICE and hybrid-ICE cars, easily ~$1000-$1500 extra premiums each year, which over 10 years ownership means ~$10,000 more paid just on car insurance alone This will negate the savings gained on petrol/diesel over the home-charge electricity. Tesla does not have any car servicing which compensates somewhat but something needs to be done with BEV car insurance prices. It seems to be related to potential damag to battery and insurance companies prefer to scrap the entire car than to take a fire risk due to incorrect repair. The entire BEV industry needs to sort it out, else it will stall BEV adoption.

Great video, and terrific insights

I disagree it is value for money when I look at it. For example, I can't see much in the way of physical controls for things. They're cheaping out on buttons, for pity's sake. What else then? So I need you to be specific about what I'm seeing that represents the value. That may be a factor in why they're not selling as well now; now there are better value for money cars available, when in the past it was just Tesla, Nissan Leaf and that Mitsubishi EV.

Everyone has there buy in point. It will level off at some point. I have a 3 year old M3LR thru my transport business, not a novated lease, i nornally flip vehicles every 2 or 3 years, but theres nothing i want to replace this car its to bloody good as a daily.

Brilliant, thank you. More like please mate. Excellent

My local Toyota have dumped the price of the Hilux 8000 . In 6 months and the offer is on the new 48v system. Everyone is struggling to sell

I smell BS here. If the car was that cheap to run and sooooo fantastic, the value would go up, not fall through the floor. The reality is, Teslas reputation and poor quality makes them hard to sell. Price reflects demand

Australia has 10 new Chinese EV manufacturers hitting the shores...you bet ya prices are going to fall further 😮😮😮

Thank you for sharing

Thanks for explaining what's going on with Tesla sales of new, lease & S/H prices. Feel sorry for so many who bought a white Telsa 😢

XPeng G6 will be way better than the Y