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Elon Musk Claims Teslas Will Soon Cost $200,000

Autonomous Car / 9 Comments

But why?

The one reason a good number of us don't go out and buy our new dream car right after it comes off there reveal stage is that it's a stupid financial decision. As necessary as they are these days, most cars, and especially new cars, are luxuries. If it does a whole lot more than get you from point A to point B, chances are you're paying a premium to own that machine because cars, after all, are depreciating assets. Unlike a home, a brand-new car loses value as soon as it's driven off the lot. From that point forward, it only continues to lose value as time passes.

Of course, there are rare examples from the classic car world, but unless you're buying one of those, or a future classic, that's pretty much the rule you need to live by. But not everyone thinks that it has to be that way. Definitely not Elon Musk.

The Tesla CEO recently took to his favorite mouthpiece, Twitter, to talk about how great of an investment a Tesla is. The discussion began when Tesla's account tweeted that a few options on the Model 3 would be discounted. Then, Model 3 owner Quinn Nelson, a man who happens to run a YouTube channel where he talks about tech products, answered that he wasn't happy about the price cuts since he had paid more for the same option in his car.

That touched off a back-and-forth conversation that stumbled onto the subject of Musk's earlier claims that Teslas are appreciating assets. "If we make all cars with FSD package self-driving, as planned, any such Tesla should be worth $100k to $200k, as utility increases from ~12 hours/week to ~60 hours/week," tweeted Musk.

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He was met with healthy skepticism from Nelson, but Musk followed his comment up by saying, "Straw man fallacy. To appreciate, your car just needs to be worth more than you paid for it, so probably ~$75k is enough if you bought a 3. FSD will be bundled in all cars (important point). Something is not a commodity if you can't make enough of them & we won't be able to."

Given Musk's comments, it's clear he thinks that even if Tesla ramps up supply, it will not be able to produce enough cars to meet demand. That spike in demand, he claims, will come from the fact that Teslas will become self-driving cars once the software is good enough to be sent to Autopilot-capable machines through an over-the-air update. That logic conveniently overlooks the fact that Tesla may not be the first company to build a self-driving car. And if it is, that technology is likely to be followed up by a competitor's version that will drive down prices. But hey, at least the Roadster's proposed rocket thrusters could feasibly raise a Tesla's value after it leaves the factory.