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Tesla Developing Used-Car Plan for Its Electric Vehicles
Tesla Motors Inc. is preparing a certified used-car program for its $72,000 Model S electric sedans that could generate more profit per sale than the company makes on new models, Automotive News reports.
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Tesla Motors Inc. is preparing a certified used-car program for its $72,000 Model S electric sedans that could generate more profit per sale than the company makes on new models, Automotive News reports.
Experts estimate Tesla could pocket $6,000-$10,000 selling three-year-old Model S cars more than its estimated margin on a new-car sale.
Tesla delivered the first Model S cars in June 2012. Ten months later the company began guaranteeing the resale value of retailed cars after three years, thus mimicking way a lease works. CEO Elon Musk vowed to personally cover the resale price if the company couldn't.
AN says sketchy data on used-car prices for the Model S suggest the cars are retaining enough value to make a Tesla buy-back program profitable. Meanwhile, Tesla introduced three-year leases on the Model S to businesses in April and consumers last week. The first of those cars will be eligible for the company buy-back plan in April 2016.
Analysts note that Tesla must set up physical facilities to refurbish and sell the used EVs it will begin receiving in April 2016 under its price guarantee. More cars will come back a year later when the first of the business leases expire.
The company faces legal hurdles to become a factory-direct used-car seller, just as it has in selling new cars direct, AN points out. There's also a risk that residual values on the Model S will fall when Tesla rolls out its $40,000 Model III in 2017.
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