Musk Stands by His Tesla Appreciation Claim That Was Called ‘Really Dumb’
Elon Musk, chief executive officer of Tesla Inc., waves while departing from federal court in New York, U.S. (Photographer: Jeenah Moon/Bloomberg)

Musk Stands by His Tesla Appreciation Claim That Was Called ‘Really Dumb’

(Bloomberg) -- Tesla Inc.’s Elon Musk is standing by a claim that the company’s electric cars will be appreciating assets once they’re capable of driving themselves.

Musk, Tesla’s chief executive officer, first made the claim in a podcast interview in April that the company’s vehicles will gain in value because they’ll eventually be capable of fully autonomous driving. He stood by this in a reply to a follower who wrote Tuesday that he was unsure if the CEO was joking or making a “really dumb” statement.

Quinn Nelson, the owner of a media company that produces videos about tech products, kept engaging Musk in a debate over the claim, which Nelson said “makes no sense.” The CEO replied that Tesla is bundling full-self driving -- or FSD -- into all cars the company builds, and that Tesla will be unable to keep up with demand when the vehicles are capable of complete autonomy.

With the exception of collectors’ cars and other rare cases, depreciation has been a fact of life for automakers, dealers and rental-car companies for decades. While Kelley Blue Book has handed Tesla a best resale value award for its Model 3, for example, the car-shopping researcher estimates the sedan retains about 69% of its value after three years.

“It’s a tall order to expect vehicle values to appreciate,” said Eric Ibara, director of residual values at Kelley Blue Book. “It would require a phenomenal execution of autonomous driving that the rest of the industry cannot replicate.”

Minutes after engaging in the dispute, Musk, 48, tweeted that Tesla will raise the price of the full-self driving package offered on its vehicles by about $1,000 a month from now.

©2019 Bloomberg L.P.

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