I Just Bought The CHEAPEST Tesla Model X In The Country!

Tesla Value Drop & Used Car Market Analysis

Key Concepts:

• EV Depreciation: The rapid decline in value of Electric Vehicles (EVs) compared to traditional gasoline cars.
• Hardware 3 vs. Hardware 4: Different generations of Tesla’s computer hardware impacting self-driving capabilities and features.
• Section 179 Deduction: A US tax code allowing businesses to deduct the full purchase price of qualifying equipment (like vehicles over 6,000 lbs) in the year of purchase.
• MSRP: Manufacturer’s Suggested Retail Price – the original price of a new vehicle.
• Tax Incentives/Rebates: Government programs offering financial benefits for purchasing EVs.

EV Value Plummet & Contributing Factors

The video centers around the significant depreciation of Tesla vehicles, particularly in the used car market. The presenter recently purchased a 2020 Tesla Model X for $14,490, a substantial decrease from its original price of over $100,000. This purchase was driven by the current market conditions, which demonstrate a dramatic fall in EV values. Unlike typical car depreciation of around 20% upon leaving the lot, Teslas are reportedly depreciating three times faster than other brands.

Several factors contribute to this phenomenon:

1. Rapid Technological Advancement: EV technology evolves quickly. New battery technology, improved range, and competitor offerings rapidly render older models obsolete, even with Tesla’s over-the-air software updates.
2. Government Subsidies: Historically, substantial tax incentives (up to $7,500 federal + state rebates, potentially exceeding $15,000 with trade-ins) artificially lowered the cost of new EVs, making used models less attractive. A $50,000 EV could effectively cost $35,000 after incentives.
3. Battery Degradation Concerns: Potential buyers are wary of battery life degradation over time. The presenter notes their 2019 Model 3 has lost 50 miles of range in 6 years, dropping from 240 miles to 190 miles.
4. Tesla Price Cuts: Aggressive price reductions on new Tesla models directly impacted the resale value of used vehicles. A 2020 Model S, originally $125,000 (adjusted for inflation), is now available for around $85,000. The Plaid model saw a similar drop, from $150,000 to $95,000.
5. External Factors: Controversy surrounding Elon Musk and a constant influx of new Teslas into the market further contribute to price declines.

Hardware Generations & Futureproofing

A key differentiator impacting resale value is the transition from Tesla’s “Hardware 3” to “Hardware 4.” Hardware 3, found in models pre-2023, enabled features like Full Self-Driving and Smart Summon, but was considered glitchy and underperforming. Hardware 4, introduced in late 2023, offers smoother driving, improved camera resolution, and greater capability, effectively “futureproofing” the vehicle for upcoming software updates. The presenter anticipates the release of “Hardware 5” in 2027, further accelerating the obsolescence of older hardware.

This hardware difference explains the significant price discrepancies observed in the used market.

The $14,490 Model X Purchase & Tax Benefits

The presenter’s purchase of the Model X was facilitated by a unique tax benefit: the Section 179 deduction. Because the Model X weighs over 6,000 lbs, it qualifies for this deduction, allowing the entire purchase price to be written off as a business expense in the year of purchase.

The calculation is as follows:

• Purchase Price: $23,000
• Tax Bracket: 37%
• Tax Deduction: $23,000 * 0.37 = $8,510
• Net Cost: $23,000 - $8,510 = $14,490

Additionally, the purchase was made through a private party transaction in Las Vegas, avoiding sales tax. The presenter also highlighted the practical benefits of the Model X over their Model 3, specifically increased storage space for podcast equipment and a longer range (290 miles vs. 190 miles freeway range) for long-distance filming trips. The car was purchased from a trusted friend, Jeremy Financial Education, who had meticulously maintained the vehicle.

Gemini Credit Card Sponsorship

The video includes a sponsored segment for the Gemini credit card. The card offers cryptocurrency rewards (Bitcoin or other options) on purchases, with rates of 4% on transportation, 3% on dining, 2% on groceries, and 1% on everything else. The presenter highlights that Bitcoin rewards have appreciated by an average of 279%. A limited-time offer provides $200 in free Bitcoin for spending $3,000 within the first 90 days.

Should You Buy a Used Tesla?

The presenter strongly advocates for purchasing a used Tesla in the current market. They emphasize the mechanical reliability of Teslas, the widespread charging infrastructure, and the significant cost savings (often 50-60% off MSRP). They suggest that someone else should absorb the initial depreciation, allowing buyers to enjoy the benefits of Tesla ownership without a substantial financial loss.

Quote: "At these prices, it just seems like a no-brainer."

They conclude that unless a buyer receives significant tax incentives or doesn’t prioritize financial savings, a 2-5 year old used Tesla is the most sensible option.

Quote: "Even though Teslas are pretty good at holding a charge, they're not pretty good at holding value."

Data & Statistics Mentioned:

• Typical Car Depreciation: 20% upon leaving the lot.
• Tesla Depreciation: Three times faster than other car brands.
• Federal EV Tax Credit: Up to $7,500.
• Model 3 Range Loss: 50 miles in 6 years (240mi to 190mi).
• Model X Original Price (2020): Over $100,000 ($125,000 adjusted for inflation).
• Model X Current Price: $85,000 (approximate).
• Model S Plaid Original Price: $150,000.
• Model S Plaid Current Price: $95,000.
• Gemini Bitcoin Reward Appreciation: 279% (average).
• Gemini Sign-up Bonus: $200 in Bitcoin for $3,000 spend in 90 days.

Conclusion

The video presents a compelling case for buying a used Tesla in the current market, driven by significant depreciation due to rapid technological advancements, government incentives, battery concerns, Tesla’s pricing strategies, and external factors. The presenter’s personal experience, coupled with the advantageous Section 179 tax deduction, highlights the potential for substantial savings. The key takeaway is that the current market presents a unique opportunity to acquire a Tesla at a significantly reduced price, making it a financially prudent decision for many buyers.