Certified Pre-Owned Roadsters (sold by Tesla)

[hcsharp]

From a business perspective, it's hard for me to understand why Tesla did what they did with the CPO program. They lowered the prices and sold them all in a fire sale. Why?

 

[palmer_md]

lowered the prices? by how much? just curious what kind of a percentage the lowered the prices. I guess I missed out on the fire sale. The original prices I saw were a bit high, and it is what I assumed they sold for. Seems like they needed a 10-15% reduction to match the open market, but I just assumed that was the markup for the "Certified" inspection and warranty renewal.

 

[ipdamages]

From a business perspective, it's hard for me to understand why Tesla did what they did with the CPO program. They lowered the prices and sold them all in a fire sale. Why?

There is some misinformation here. They did not sell all of the CPOs. They have sold them at a rapid rate in the past month, after the price reduction. Here is my post from the other CPO thread:

I heard from another person in the CPO group and this isn't quite accurate. They have sold all of the cars that were ready for sale, but there are still lots of cars that have not yet been refurbished and which are in the loaner program. They are all for sale and will in time be refurbished and put up on eBay and/or the CPO site. But the best thing to do is to email [email protected] with your parameters and they will try to find a match. Also, as regards CPOs abroad, Tesla will be making some offers for such cars where they are permitted to do so.

So palmer_md, there is still an opportunity, though the selection is not as great as it once was. But there are still several cars available.

Henry, it looks like the reasoning behind the decision-making is, at its core, supply and demand. They bought back dozens of cars and they weren't selling. They had been priced at a small premium to the third party market, but if they had maintained those prices and continued to buy cars - even at drastically reduced prices Tesla paid to sellers - they would have taken many years to sell down their inventory. So rather than have employees spending lots of time and $$ running a labor-intensive CPO program that was growing bigger rather than smaller, they decided to sell off the inventory at prices to get it done. That isn't to say that there won't continue to be a small number of cars in the CPO program in the future (e.g., lease returns), and as I wrote, they are likely to be doing CPOs abroad as well, but having $millions in CPO Roadster inventory isn't how the company wanted to allocate its resources.

There are certainly several Tesla employees who would like to see the temporary glut period end and the resale market get back up to where prices should be. Having a constant drag on the market for years was not seen to be helpful.

palmer: How much? It looks like it was about 10-20%. It also depends on how you value the warranties, which are both now included (they also include a battery warranty now).

 

[bgrenell]

I just bought a roadster sport number 556 on the open market. However, I spent a couple days with Ryan Kennedy at Menlo Park and Fremont test driving a variety of roadsters. They have a wide selection I personally saw about 20 cars that were ready for immediate sale and Ryan indicated there were quite a few more in the pipeline. They only had two of them up on their website two weeks ago when I was there. Ryan said they just haven't gotten around to taking the pictures and posting them as yet. All of the cars came with a three-year 36,000 mile warranty including the battery and bumper to bumper coverage. They ranged in price from $58,000 for a base 1.5 2008 roadster to just over $100,000 for a 2.5 with every bell whistle and executive leather. I found the 2.0 Roadster sport with improved seats, adjustable suspension And somewhat improved sound suppression over the 1.5 (although not as much as the 2.5) to be the sweet spot for me in price, performance and value. Tesla had a lovely example of a 2.5 roadster sport with around 15,000 miles, 110 and 240 V chargers, hardtop, and adjustable suspension for $85,000. That car would have made me very happy I had a difficult time not choosing one of the CPO roadsters because the warranty seemed so appealing. In the end I bought mine on the open market because the dealer came down so far in price that I decided it was worth my taking the risk to self insure. Any Tesla dealer will do a thorough prepurchase inspection for a charge of $300. Mine was at Tesla Torrance. A test that was not immediately included in this is a thorough assessment of the battery. At the 36000 mile/ three year service they do a test which explores the integrity of all of the pages or sheets included in the battery. I had this done as well. . I also had them charge the battery fully and report on the distance in standard mode, ideal range. This yielded 230 miles on my car which I judged to be close enough to full battery capacity. I had a wonderful time doing the shopping and am now in Arlington Virginia awaiting the truck which will deliver my new roadster

- - - Updated - - -

Two more details. It is my understanding that the three-year 36,000 mile bumper to bumper including battery warranty was briefly offered as a stand alone item for $12,000. I also heard that Tesla reduced their inventory of roasters by $20,000 each across the entire fleet Not long before I visited.