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Following Tesla's CPO Business

Discussion in 'TSLA Investor Discussions' started by SteveG3, Apr 30, 2015.

  1. SteveG3

    SteveG3 Active Member

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    Thought we might want a place to discuss the CPO business.

    Hank Lloyd Wright here at TMC has created a wonderful "consolidator" page that gives us a considerably further reaching view into the CPO business than Tesla's own CPO section on their website. His file pulls data from Tesla's CPO page, and makes it possible to see the data from all the listings combined in one table for U.S., one for Canada, sort the data, and track CPO cars sold (he has a table at the bottom of this page where each car's data is moved to once it is sold). The cars listed for sale and as sold are updated every hour on the hour.

    As I understand it, Tesla has had about 213 cars listed on its CPO site since Hank launched his page 4/27, and has sold 27 of these cars (fwiw, I came to 213 by adding current cars for sale in U.S., Canada, and cars already sold). Over 10% of listed inventory sold in 3-4 days, seems like a good start. There may be something of an initial rush to buy, but at the same time, as far as I know we are only in the beginning stages of the public coming to know this CPO program and it's listings on Tesla Motors are available.

    One other note as to general discussion of the business... in a thread outside the investor's section on the program, it's been mentioned that Tesla may have substantially more than the 200 cars currently listed in their inventory. This makes sense to me as so many early Model S owners decided to upgrade to the "D." What's more, large numbers of people are simply in the habit of keeping a car 5 years or less. I did some rough numbers, and this program might be as much as 10,000 cars per year in the U.S. alone in just another couple of years.

    Here's a link to the page Hank created:

    Tesla CPO Consolidator
     
  2. HankLloydRight

    HankLloydRight Fluxing

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    I think you're right -- I think there are many more CPO cars waiting in the wings. I surmise that Tesla didn't want to overload people with too many choices of CPO cars, so they're limiting them to ~200 available at any time. Of course, this could change. Perhaps they've sorted the cars out in some order to maximize profit (so say the "worst" cars get sold first, etc).. that way, they can keep adding cars to the CPO fleet as they need. Now I have no idea what criteria they would use to hold cars back for later, but it's just a theory.

    Or OTOH, only 200+ cars have been inspected/repaired/readied for the CPO program, and they are added as they are completed.

    It will be fun to watch, though!
     
  3. dirkhh

    dirkhh Middle-aged Member

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    Yes, yet another great tool you built there. And I noticed my old car (which I believe was the cheapest they had when I first checked) already sold :)
     
  4. aznt1217

    aznt1217 Active Member

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    The other issue is that CPO site isn't fully up to date. Sometimes the cars are on there, but aren't ready to be sold yet as they are awaiting refurbishment. I know because I was trying to buy one lol
     
  5. HankLloydRight

    HankLloydRight Fluxing

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    Yeah, in that respect, no different from any other car dealer. Back in the 90's I saw an ad in the sunday newspaper (really!) for a used BMW 325i as the local BMW dealership. I went down there to look at it, because it was exactly what I was looking for, and they still hadn't touched it since it was just lease-returned. It was totally dirty -- muddy on the outside and clearly never cleaned inside (food crumbs, coffee stains, etc). They had it for at least a week, since they had time to put an ad in the paper. Anyway, it cleaned up nicely and I bought it a few days later.
     
  6. SteveG3

    SteveG3 Active Member

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    I agree with both of you on the inventory waiting in the wings. of course, they wouldn't want to totally flood the market with supply overnight as well.

    as far as to the potential scale of this for Tesla, if they are selling ~100K S/X by next year, by 2019 I think there could be as much as 50K vehicles sold through this program if they roll it out in all their major markets. If the average net profit per CPO vehicle were $2,000 that would add $100 million to the bottom line, or ~$.70/share, if the net profit were $3,000, that would be about $1/share. This is just for a sense of potential scale, we'll have to watch how this plays out and Tesla's level of interest in keeping this fully in house as volumes grow. For now, I really recommend going to Hank's consolidator tool and having some fun both as a consumer and an investor. Hank, thanks for stepping in and making this for all of us!
     
  7. HankLloydRight

    HankLloydRight Fluxing

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    You're welcome!!

    I'm just waiting for Tesla to launch their CPO affiliate program. :)
     
  8. dennis

    dennis P85D

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    It would be interesting to speculate on how many $$$ Tesla has tied up in CPO inventory. 500 CPO cars with a carrying value of $60K each would be $30M. hopefully they will say something about this on the Q1 call since the number is bound to have grown since Q4.
     
  9. AlMc

    AlMc 'Senior Moments' member

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  10. chickensevil

    chickensevil Active Member

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    This goes to show that you can make the data tell whatever story you want it to. Because there is a Seeking Alpha article out about how terrible they are doing at sales using just the single data point of sales per day (average according to the article is 6 with the high being 11). And trying to suggest that this is a really low number compared to what they should be able to do if they were demand constrained or some such...

    in in any case, I like the days listed stat because that is a pretty decent trend of having a "car on the lot" so to speak, for less than a week before it is sold.
     
  11. FluxCap

    FluxCap Active Member

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    #11 FluxCap, May 4, 2015
    Last edited: May 4, 2015
    This is totally awesome. Going to go ahead and post EVino's first image here:

    xvzijUj.png

    And here's his data collation:

    Edit: TMC's own HankLoydWright came up with this tool:
    Tesla CPO Consolidator
     
  12. Theshadows

    Theshadows Active Member

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    The longest is 7 days? I'm not a car salesman but I would guess that any car salesman would kill to have an average dom of 7. Let alone the longest ones.

    Most the car dealers, new and used, that I drive past here, I see the same cars sitting for a month or more.
     
  13. MikeC

    MikeC Active Member

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  14. GIdoc

    GIdoc Member

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    You have to keep in mind that this is the data for the cars already sold. You do not have data for other 100 something cars that are not sold. For every one P85+ sold in 1 day, we don't know how many P85+ are sitting unsold.
     
  15. FluxCap

    FluxCap Active Member

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    No that is exactly what the chart tells us. It is fully inclusive of every listing. Not a single Model S lasted on the "lot" more than 7 days.
     
  16. schonelucht

    schonelucht Active Member

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    Let's not get ahead of ourselves. They started the CPO program 7 days ago with 200 cars. Of those, they sold about 70. That means they have 130 cars 'on the lot' which are going to be sold only after at least 8 days. Never mind that 1) the majority of the cars are 'on the lot' since the D-launch 2) they purposefully only put 200 cars 'in the website showroom' with possible thousands more 'on the parking behind the lot'. They are artificially restricting visible supply (a good marketing move btw).

    All in all, Tesla will have kept these cars on their hand for a lot longer than 7 days on average. From an investor point of view, the only thing that counts is that they manage to sell these cars faster than they receive them from trade-in. Assuming the next big trade-in event (model X) happens in approximately 150 days, at current rates they'll clear between 1000 and 1500 cars from their inventory, probably not enough to clear everything out.
     
  17. Newb

    Newb Member

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    #17 Newb, May 5, 2015
    Last edited: May 5, 2015
    Where's that information about "possible thousands more 'on the parking behind the lot' from? Or is it just your guess?

    If you analyse the data (i.e. facts), your accusations are false:

    I'm glad that I copy-pasted the data from CPO reports yesterday. There were 177 cars listed for sale in the U.S. , about 25 in CAN and 50 cars listed as sold with an average selling price of $72,000 and an average of 2.6 days on the market.

    Today I checked again and there are 166 cars listed for sale in the U.S., 18 in CAN and, wait for it, 77 cars listed as sold, with an average selling price of $76,700 and an average of 3.8 days on the market.

    Thus, they're not "purposefully" limiting the number of cars in the showroom, the number declined from about 202 to 184 in one day. And it would be seriously dumb to "artificially restrict visible supply", since there's also new cars listed daily which are sold right-away, i.e. 0-1 days on the markets. Plus, there's no reason whatsoever to believe there was not enough demand for CPO cars - the opposite is true thus far.

    Interesting facts btw: Cheapest car sold to date was a 2013 S60 with some 27,000 miles on it for $53,000 (1 day on market). Most expensive car sold was a 2014 P85+ with just 2,400 miles on it, for $100,200 (3 days on market). And at the current rate Tesla is selling 27 CPO cars per day, worth $2,000,000.
     
  18. Causalien

    Causalien Reaper of Trolls

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    Please confirm your source with person's name or pic if the parking lot.
     
  19. bonaire

    bonaire Active Member

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    A tracker shows current web inventory of 166 + 18 in Canada and 77 sold as of morning 5/5 (261 total CPO visible). You may be right that the "for sale" side may be added-to as others are sold so that it doesn't create a large inventory book on the web. I have heard of some "before CPO processing" cars sold for a bit less due to not having the CPO goings-over. Also, trade-ins still keep happening so it's hard to know if new CPO are from back in the P85D trade-in cycle or more recent. But it is nice to see the Vin #s presented on Tesla's web site to review when they were built. No D model CPOs yet.
     
  20. tentonine

    tentonine Member

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    The tracker shows the dates that cars were added to inventory - a few seem to have been added almost every day, sometimes even at multiple times during the day.
     

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