“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.” Elon Musk said that in 2019, and like many of his bold vision statements, has continually been proven wrong every minute of every day since. Hundreds of thousands of Tesla buyers have driven tens of thousands of dollars of value out of their cars.

The world’s most successful electric automaker has been completely dicking over its customers for the last year by dramatically dropping prices across the board. Hundreds of thousands of Tesla cars all over the country, and indeed the world, have completely tanked in value. After a continual upward trend in pricing across 2022, the ostensibly Texas-based company has been dropping prices left and right in 2023 in attempts to keep demand for new vehicles high.

Tesla buyers have been feeling the pinch as they watched the brand new price of their second-most expensive asset get squeezed. As a result of the new prices coming down—and new incentives being introduced for which they were not eligible—used prices have tanked and these buyers are more upside-down in their cars than previously thought possible. A new Model X Dual Motor buyer today is paying $41,000 less than someone who bought the same car this time last year.

Let’s Do Some Math

I wanted a rough idea of the value lost in all those Teslas. So I did some math. I wanted to know not only how much Tesla has driven value out of their cars, but the owners as well. How much could be attributed to the drop in new car prices, but also how much of a price drop could be settled through regular daily use, too. Using some national searches from CarGurus and AutoTempest, I went looking for 2023 model year cars with fewer than 10,000 miles, clean titles, and no recorded use as a rental car. Just regular cars with regular miles. CarGurus has a nice tool that tells you if a price is fair based on its calculations of the market, and AutoTempest can search multiple sources at once and provide links to the cheapest examples in the country. Both of these tools are helpful!

Mega Depreciation

Let’s start with that Model X Dual Motor. As the most expensive Tesla, the X has a lot more to lose than the others. At the end of October, 2022, the cheapest Model X was $120,990, and that same car today is $79,990. According to CarGurus, a used 2023 model year car without too many miles is still basically worth what a new Model X is worth, presumably because there’s no wait time for the factory to deliver. The current wait time on a new X is two to three months, so maybe this makes sense if you need it now. The lowest price I could find nationally was $71,995, which seems like a good deal. That’s over $49,000 less than it cost new, and eight grand less than a new one ordered today.

A Model S Dual Motor is pretty similar to its X counterpart. It was originally $104,990, and the price has dropped precipitously to just $74,990 today. CarGurus says a used 2023 is worth around $71,000, but the least expensive example I could find was just $68,986. Bought one year ago, this seller is prepared to lose at least $36,000 for the privilege.

How about the less expensive and more popular Teslas? The Model Y is the best selling EV in history, and is constantly shifting new units. A year ago a new Model Y Long Range AWD cost $65,990, but today it’ll run you just $48,990, [and the recently-introduced Model Y RWD is $5,000 fewer still]. CarGurus says an average Model Y Long Range AWD is $46,000 on the used market, while I found the lowest priced example was $43,165, accounting for a loss of at least $22,825.

Model 3 depreciation has typically been a bit lower than the others, largely because it is the cheapest entry point to the Tesla lineup, and as a result is still in pretty high demand. The rear-wheel-drive Model 3 was available last year, so we’ll work our estimate off of that one, and it cost a whopping $46,990 a year ago. Tesla has dropped that price to just $38,990 since, and used 2023 model year cars are still selling for $37,000. There are a few examples selling under $30,000, including this potentially desperate seller, asking just $28,499.

To recap, a Tesla Model X Dual Motor buyer in early November 2022 is now looking at an average of $41,000 loss if they were to sell their car. The good news is, they could basically sell it and immediately turn around and buy another one brand new today. Faced with the same scenario, a Model S Dual Motor owner is looking at losing about $34,000, a Model Y Dual Motor Long Range owner would lose about $20,000, and a Model 3 RWD owner is hacking $10,000 out of their net worth.

More Math!

Keep in mind that this doesn’t account for finance interest, taxes, title fees, licensing fees, insurance, electricity, maintenance, or insurance costs. So let’s dig into that!

Sales tax is going to vary based on where you live, by state and city. For example, where I live sales tax is eight percent, so on a base Model X last year I’d have paid an extra $9,679.20 in sales tax. Title and license fees is another $50 for the year. Insurance, according to Nerd Wallet, is pretty expensive at $3,861 annually on average for a Model X.

We’re going to assume that I paid the sales tax plus the 20 percent down on the Model X in cash, and financed the rest. That’s a $24,198 cash payment, and $96,792 financed. According to Statista, average new car loan terms in November 2022 were around 6.05 percent APR. We’re going to assume that I scored a 72 month loan, and that would put my monthly payment at $1,606.41.

Let’s say I drove 10,000 miles in that year, and I pay 9.6 cents per kWh for electricity service. Most of the time I’m using this hypothetical Model X for commuting, but will occasionally drive long distances and rely on the Tesla charging network, say a quarter of the miles. Tesla throws in charging for the first three years on a Model X sale, so we’re only really paying for 7,500 miles worth of electricity. The EPA rates the Model X at 33kWh/100 miles, meaning I used approximately 2,475 kWh to drive that 7,500 miles, and paid about $237.60 in electricity to charge up at home.

At the end of twelve months with the car, I have paid $57,302.72 to own it and insure it. Unfortunately the outstanding balance on my Model X loan is $82,993, and Tesla just dropped the price of a new Model X to $79,990. Even if I can get the $80,000 price that CarGurus says I can, I’m still almost $60,000 in the hole to own this car for a year. Yikes.

Obviously buying a new car is almost always going to be a money losing proposition. Elon might have convinced some people that buying a new Tesla would get them an appreciating asset, but that was a lie then and it remains a lie today. If you’re looking for a way to make best use of your money, don’t buy a new car, and don’t listen to the world’s richest man.

It doesn’t really take all of that math to come to a conclusion, either. Tesla delivered 405,278 cars to new owners in Q4 of 2022. By dropping the prices on each and every car sold since then, the company has collectively cost its customer base billions of dollars. For the sake of argument, if all of those cars were the best-case-scenario Model 3 RWD with no options, paid for in cash, and sold a year later at the average $37,000 price [that’s a $9,990 loss on 405,278 cars], Tesla’s price drops cost the global economy a collective $4.05 billion.