The Tesla Cyber Truck will depreciate like every other Tesla

The Tesla Cybertruck came out as one of the most hyped vehicles of the past decade, and immediately drew celebrity status. The first models to be resold on online auctions saw prices well over MSRP, in some cases selling for more than double what the original owner paid. However, this trend is not likely to continue. The Cybertruck is meant to be a mass market vehicle, and I am confident in the next 6-12 months we will start seeing second hand cars sell for below MSRP and the depreciation that impacts other EVs will hit the Cybertruck.

Background on the Tesla Cybertruck

The Cybertruck was announced at a Tesla event in 2019 and immediately saw a lot of interest with deposits for the car piling in. The development of the model saw a lot of delays and the first units only started rolling off the assembly line in 2023. Right now there are several models available for sale: A rear wheel drive model that starts at $61K, a all wheel drive model that starts at $80K and the Cyberbeast that starts just under $100,000. The initial buyers were also able to buy the Foundation model. 

source: Bring A Trailer

What is the current market for the Tesla Cybertruck?

Since the model was initially announced, it is estimated that about 2,000,000 people signed up for the waitlist. It is not likely that all of those will convert to paid buyers, but Wedbush Securities estimates that around 30-40% will. Through April 2024 Tesla delivered just under 4,000 Cybertrucks. By comparison, that is more than the amount of Hummer EVs GM sold in all of 2023. It is likely that Tesla is going to continue ramping up production of this popular model, but if you try to reserve a model on its site currently no estimate on delivery time is provided. This creates a robust second hand market where dealers are selling used models for over MSRP.

Over the past few months several high profile auction sites had Cybertrucks listed on them with various degrees of success. The first Cybertruck listed on Bring a Trailer sold for $160,000 at the end of March 2024. Just 2 months later, in early June the same model sold for just $112,000. On a competitor site, CarsandBids, there were several models that sold from $108,000 to $168,000. One of the most expensive examples was the top of the line Cyberbeast model selling for $262,000 at RM Sotheby’s.

What is next for the used Cybertruck market?

We have several similar examples of hyped cars with limited initial production that we can look at to see what is likely to happen with the Cybertruck. The first Hummer EVs listed for sale went for over $250,000 on the used car market. Even though production is still having a hard time ramping up, you now see cars listed for under $90,000 on used car sites, and some cars not even breaking the $85,000 mark on auction sites. This is a 66% drop in “value” from the overpriced initial auctions. We also saw a similar situation happen with the Ford Bronco, dealers were frequently marking up cars well over MSRP. Now you are able to find plenty of used models seeing typical depreciation percentages of 25%-35% after 3 years.

Hummer EV price trend, source: CarGurus

My prediction is, as Cybertruck production continues to ramp up prices will drop drastically. EVs have had a hard time retaining value, and it is normal to see a car lose 50-60% of its value after 3 years. I expect a similar outcome with the Cybertruck, especially given additional complications of maintenance of its stainless steel body and the very strong reactions its styling draws from people. It is in Tesla's interest to sell as many Cybertrucks as possible as it is one of its highest priced vehicles and a growth opportunity as demand for its other models starts to slow down. I can expect the used frenzy for Cybertrucks to slow down in the next 6 months, and prices to start to see noticeable declines by early-mid 2025.