Guest post by Thomas Perrotta, Editor of Savvy

Tesla has been a leader in the recent Australian EV sales boom. Seven months into 2026, the Model Y is the most popular model in the most popular vehicle segment (SUVs) in terms of new car sales.

That places it ahead of an Aussie automotive darling in the Toyota RAV4 and behind only two powerhouse utes (Ford Ranger and Toyota HiLux) among all brand-new models being sold.

However, one issue that has continually plagued EVs in general has been the depreciation factor: simply put, these models don’t retain their value as well as ICE vehicles.

That’s why Tesla has brought in its own guaranteed future value (GFV) program, designed to address fears of negative equity. However, is it too little, too late for the American giant and future customers?

The tale of the tape: how Tesla’s depreciation stacks up against the rest

Analysis conducted by Savvy in August found that the 2023 Model Y RWD depreciated by 45.92% on average, while the 2022 model dropped by 54.39%.

Although these numbers are more or less on par with other EVs, the discrepancy between the Model Y and ICE models becomes clear when you look at some of its SUV competitors:

Model 2024 depreciation 2023 depreciation 2022 depreciation
Tesla Model Y RWD 33.26% 45.92% 54.39%
Toyota RAV4 GX 16.71% 18.60% 20.60%
Subaru Forester 2.5i 27.11% 31.97% 37.83%
Mitsubishi Outlander ES 34.95% 35.34% 36.95%
Hyundai Tucson 35.90% 35.49% 35.24%

As you can see, the Model Y lags behind the rest of the pack to the tune of 10% to 20% across those two years. It finds itself on a comparable rate of decline to the Outlander ES and Tucson in 2024, but still well behind the RAV4 GX and Forester 2.5i.

However, this isn’t the case for newer models. The 2025 Model Y, for example, has only dropped 16.95% on average, which is a bit more than the equivalent RAV4 GX but far less than the other three models.

Model 2025 depreciation
Tesla Model Y RWD 16.95%
Toyota RAV4 GX 12.15%
Subaru Forester 2.5i 22.78%
Mitsubishi Outlander ES 30.86%
Hyundai Tucson 34.24%

What that tells us is, simply, newer Model Ys don’t have the same acute depreciation issues that the older versions did (at least for now). There’s a big reason for that, too: Tesla has slashed the price of the Model Y and Model 3 over the last five years.

In 2022, the Model Y RWD came in at a base price of $72,300. Fast forward to 2025 and this base price had plummeted to $55,900. This has clearly accelerated the rate of depreciation for older models; pricing the 2022 Model Y at its 2025 base slashes its depreciation to 41.01%.

Tesla’s GFV: too little, too late?

The introduction of GFV through Tesla is designed to alleviate concerns around plummeting value over a finance term, especially for those who plan to sell their car soon afterwards.

The way it works is relatively similar to attaching a balloon payment to a standard car loan, whereby you agree on a lump sum with your lender which you’ll have to pay at the conclusion of your finance agreement.

At the end of the loan term, you can typically pay the residual out and purchase the car, sell it or trade it in to cover the residual or refinance the residual to extend the finance term.

Where GFV deviates from that model is its in-built protection against drops in value, guaranteeing that the owner of the car won’t have to pay any shortfall out of pocket. A regular residual payment doesn’t offer any safeguards against negative equity (owing more on your car than it’s worth).

There are clear benefits to GFV for those who like to change their cars over on a regular basis, even providing the option to return it to your financier. They bring a great deal of flexibility in that regard. If your Tesla is worth more than your GFV at the end of the term, you also get to pocket the difference.

However, the question remains: is the introduction of GFV at this point worthwhile for prospective buyers? Where depreciation has been at its worst is with highly priced EVs at a time where the used electric market is in its infancy.

As the price has come down and the demand for EVs grows, that issue clearly isn’t as relevant to buyers as it once was. There’s little doubt that many Tesla buyers in the early 2020s would’ve benefitted significantly from GFV, as they weren’t to know that their car’s value would be undercut by Tesla itself.

Today, though, those seeking out a Tesla finance deal specifically to access GFV could actually be costing themselves money by limiting themselves to a singular option.

The potential pitfalls of Tesla’s GFV

The biggest factor to consider when taking out a car with a residual payment is that while it reduces your monthly repayments, the amount of interest you’ll pay across your term rises.

Loan amount Loan term Interest rate Residual payment Monthly repayment Total interest
$58,900 5 years 6.49% p.a. 0% $1,152 $10,230
$58,900 5 years 6.49% p.a. 25% ($14,725) $944 $12,451
$58,900 5 years 6.49% p.a. 35% ($20,615) $860 $13,339
$58,900 5 years 6.49% p.a. 45% ($26,505) $777 $14,227

Calculations are for illustrative purposes only and don’t necessarily reflect the interest rate you’ll receive on your car loan.

The table above shows how different residuals would impact your finance for a 2026 Tesla Model Y RWD.

Even a lower percentage like 25%, which will likely be much lower than what you’d receive through Tesla’s GFV, costs buyers an extra $2,000 compared to not having one at all. For a 45% guaranteed value, that hits almost $4,000.

Remember that the residual payment will need to be paid as a lump sum, too, so if you’re planning to keep your car, you could be forced to stump up tens of thousands in a single hit.

Used EV market swells as sales surge

Australian new EV sales are reaching new heights in 2026, with the 127,244 purchased up to the end of July having already surpassed last year’s record tally (103,270) with five months to go.

That’s seen the share of battery electric vehicle sales increase to 17.3% so far this year, which is still set to rise further, to blow last year’s 8.3% market share out of the water.

It’s the clearest sign yet of the heightened demand brought on by increasingly competitive EV pricing and ample stock availability.

Throw the gradual building out of public charging infrastructure and improving technology and range into the mix and EVs are becoming more appealing to a wider group of Aussies.

It’s for this reason that Savvy Managing Director Bill Tsouvalas believes GFV on a Tesla today isn’t quite all it’s cracked up to be.

“The explosion in EV ownership is only scratching the surface of where electrified vehicles will take Australia and the rest of the world,” he explained.

“One of the big reasons why they’ve traditionally struggled to retain their value is due to doubts people have over their electronics and batteries over time.

“People have become more educated over time and confident in what EVs can do, especially those made by Tesla, which further fuels demand and will see the used market continue to grow.

“That’s why GFV isn’t as helpful as it used to be: their value retention will continue to improve, meaning you’ll be saddled with a potentially significant lump sum at the end of your deal.

“For those wanting to keep their vehicles, going with a standard car finance deal keeps things less complicated and helps you avoid a potentially massive residual to stump up at the end of your loan.

“If you’re looking to switch between cars regularly, GFV could be useful, but it’s important to be mindful of how the deal looks as a whole and whether you could benefit more by looking elsewhere.”