Elon Musk takes to Twitter, warning owners of ICE cars that run on petrol and diesel that their cars may start to lose value in the future. With the increase in EV sales, this may cause “residual values of gas/diesel cars to plummet in the coming years.”
Elon stated last year that Tesla vehicles were due to appreciate thanks to their self-driving abilities that were getting uploaded to the cars via OTA updates. The vehicle becoming a revenue-generating asset is one of Musk’s objectives, and the improvement of the software of the car is just one way in which he will achieve this.
By raising the price of the Full Self-Driving Option of Tesla models, he believes the value of the cars will rise. He confirms this on Twitter:
— Elon Musk (@elonmusk) April 13, 2019
He then warned drivers of ICE cars that their cars are likely to depreciate even more than normal.
Your comment above: “Who in their right mind would buy an ICE after 2025 knowing its residual value will be zilch? Legacy auto: go EV or go BUST!” is super important for car buyers. Residual values for gas/diesel cars will plummet in coming years.
— Elon Musk (@elonmusk) February 10, 2020
The electrification of the motor industry is inevitable, with most manufacturers looking to electrify the majority of their portfolio in the coming years. We’re not sure how this will impact drivers who are still driving ICE cars in the next 10 to 20 years, but the internal combustion engine will soon be outdated technology, and therefore the value of these cars should dip even further.
On the other hand, I don’t believe Tesla models are going to appreciate. I think the thought that a piece of technology that is being used most days appreciating is rather silly. Despite this, I expect their depreciation to be slower than standard ICE cars.
On the other hand, if we look at phones and how fast they lose their value, especially when a replacement is released, this rule could very easily be applied to electric cars.
The future is unknown, but this emerging industry is going to be very exciting as it grows.