Following Tesla's CPO Business

[schonelucht]

Where's that information about "possible thousands more 'on the parking behind the lot' from? Or is it just your guess?

It's an educated guess based on 1) Tesla replenishing the stock of CPO cars on their website as they get sold 2) Tesla having inventory on the books indicating thousands of cars as reported in the latest report 3) pictures here on the forums in the run up to the public CPO program of Tesla having many more just on a single lot.

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

Accusations? That's an interesting choice of words. Maybe I don't get the finer intricacies of the English language but that sounds to me like you describe bad faith to my best efforts in interpreting the data. I may be wrong, just like you may be wrong. But saying I am accusing anyone of anything is just ridiculous but I guess it is par for the course on these forums for anyone who's glasses are tinted just a slightly lesser shade of rose.

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.

You don't need to copy-paste the data and only make a judgment on one single data point. The consolidator keeps track of this nicely for the full program. Go here : http://logmysc.com/cpo-reports.php sort by 'Date added' (last column) and you'll see they regularly replenish the stock of CPO cars on the website.

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

Tons of Used Model S - Getting ready for CPO Program

They sell 9/week on average out of the Chicago area since the CPO went public or 27 since that picture was taken (it's unlikely they'd sold more when the program wasn't yet available). Together with the 34 cars mentioned for Chicago on the CPO website we get a total of 61 cars which leaves a big gap to the 94 cars this pictures testifies of. And mind you, these are just the cars that are visibly left outside at a single location, ignoring the fact that cars were still arriving at that location after that picture and taking all the parameters as liberally as possible towards newb's point of view. I think the aggregated evidence is quite solid that Tesla did not dump the full inventory right at the start of the program.

 

[schonelucht]

No D model CPOs yet.

If I were Tesla and I had a D to sell as a CPO, for example from someone who traded a 60 for 70, I would NOT put it on the public list. Because as soon as you put in one, prospective buyers may start to think, hey D's are coming available and immediately willing to pay less for the existing stock of non-dual motors. The same logic may apply to a lesser extent with other options like heated steering wheels or the sensors for autopilot.

 

[Newb]

Accusations? That's an interesting choice of words. Maybe I don't get the finer intricacies of the English language but that sounds to me like you describe bad faith to my best efforts in interpreting the data. I may be wrong, just like you may be wrong. But saying I am accusing anyone of anything is just ridiculous but I guess it is par for the course on these forums for anyone who's glasses are tinted just a slightly lesser shade of rose.

Well, I don't want to get into one-on-one discussions on such a beautiful day, but I'll just quote your words: "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)". => You're accusing Tesla of being dishonest about CPO cars being available for sale. We had that same discussion about people accusing Tesla of lying about demand which was ridiculous, too.

you'll see they regularly replenish the stock of CPO cars on the website.

Yes, that's true, but the reason is obvious - those cars are being prepared one after another to be put on CPO program which involves check-ups, potentially repairs, replacement of parts. This is a normal process which can take several hours per car. And you can imagine that U.S. Tesla Service Centers are busy enough. I'm not saying Tesla is in a huge hurry to sell those cars but your clear statement is accusing TM "purposefully" keeping "thousands" of Model S on the parking lot - which is a blatant and false accusation in my eyes. And the 94 cars in Ilinois surely aren't representative of the whole U.S. - there's no reason to conclude this from one picture.

In any case, this "news" won't move the needle for the stock, fortunately. (from the perspective of an investor who is NOT short TSLA; but lllooonnng)

 

[aznt1217]

If I were Tesla and I had a D to sell as a CPO, for example from someone who traded a 60 for 70, I would NOT put it on the public list. Because as soon as you put in one, prospective buyers may start to think, hey D's are coming available and immediately willing to pay less for the existing stock of non-dual motors. The same logic may apply to a lesser extent with other options like heated steering wheels or the sensors for autopilot.

There aren't any D's that are going to be listed. They are better used as showroom or inventory sale cars because they are so new the cost of refurbishment is unnecessary and doesn't make sense. I can tell all of you for a fact the number of available cars on the site is OVERSTATED. I was looking at a car on the site and it turns out it wasn't ready yet and was posted prematurely a couple of hours later the car was pulled along with a few others.

 

[ModelS8794]

Hank that is a great tool. One poster here noted they saw their own car listed and sold. I wonder if anyone else could provide details on what Tesla purchased their trade in for. It'd be great (as customer and as investor) to see what the markups look like.

 

[schonelucht]

Hank that is a great tool. One poster here noted they saw their own car listed and sold. I wonder if anyone else could provide details on what Tesla purchased their trade in for. It'd be great (as customer and as investor) to see what the markups look like.

We have two reports from forum members. One car had a 6% markup and the other was priced at a loss to Tesla.

 

[Robert.Boston]

We have two reports from forum members. One car had a 6% markup and the other was priced at a loss to Tesla.

And those numbers don't include the time & expense of putting the car into salable condition. That's a much smaller margin than I would have thought/hoped.

 

[dalalsid]

Can a mod please move this stuff to this thread - Short-Term TSLA Price Movements - 2015 - Page 612 - it makes it easier to find.

 

[HankLloydRight]

And those numbers don't include the time & expense of putting the car into salable condition. That's a much smaller margin than I would have thought/hoped.

But at the same time, for every CPO car, they did sell a new P85D or 85D at full price to an existing owner. So that racks up new sales and moves inventory and keeps the factory utilized. Maybe their objective for the CPO program isn't to be a profit center but a (slight) loss leader to sell more new cars.

 

[HankLloydRight]

Can a mod please move this stuff to this thread - Short-Term TSLA Price Movements - 2015 - Page 612 - it makes it easier to find.

What? it's not the same topic at all. That other thread gets way too much traffic to follow a discussion specifically on the CPO program, we're not talking about day trading stock in this thread at all.

 

[Cattledog]

But at the same time, for every CPO car, they did sell a new P85D or 85D at full price to an existing owner. So that racks up new sales and moves inventory and keeps the factory utilized. Maybe their objective for the CPO program isn't to be a profit center but a (slight) loss leader to sell more new cars.

It's both and. Get people into a CPO Tesla who would have trouble paying 50%-100% more for a a new one, get people into a new one who love the technology, company, newness, etc. It would be interesting to see the statistic on buyers of the 'D' cars, how many are previous Tesla owners? It's a easy a double digit percentage number, the question is what's the first digit - 1, 2, 3, more?

 

[dalalsid]

What? it's not the same topic at all. That other thread gets way too much traffic to follow a discussion specifically on the CPO program, we're not talking about day trading stock in this thread at all.

That stuff was specifically discussing the CPO program. And that is my point. I wanted to find that stuff related to the CPO program and I had to trawl through a lot of pages in that thread to get back to it.

 

[Robert.Boston]

Moderator's Note

Can a mod please move this stuff to this thread - Short-Term TSLA Price Movements - 2015 - Page 612 - it makes it easier to find.

No. When a subject is worth more than 15 posts, it belongs in its own thread. The Short-Term thread moves so rapidly on so many fronts that it's impossible to have a substantive conversation. That's why forums have threads instead of just being a giant chat room.

---Oh, sorry, I see what you mean. Yes, I'll move the CPO posts from there to here. The way you worded your request, it was ambiguous which things you wanted merged into what.

 

[HankLloydRight]

You said "this stuff into this thread:". If you meant it the other way around, you could have explained it a lot better.

 

[schonelucht]

But at the same time, for every CPO car, they did sell a new P85D or 85D at full price to an existing owner. So that racks up new sales and moves inventory and keeps the factory utilized. Maybe their objective for the CPO program isn't to be a profit center but a (slight) loss leader to sell more new cars.

According to the shareholder letter they plan to run a 5% margin on the "Anything-but-new-sales" part of the company by the end of this year. So it's clearly not seen as a (huge) profit center.

 

[Twiglett]

According to the shareholder letter they plan to run a 5% margin on the "Anything-but-new-sales" part of the company by the end of this year. So it's clearly not seen as a (huge) profit center.

That really sets the bar for private used sales pricing. Especially when they plan on 5% margin but still offer a full four year warranty.

 

[Electric Joe]

In looking over the list of sold cars I started wondering if price is the major characteristic for selling quickly. I'm looking to buy one myself but am holding out for that perfect car (under S85, $55k, gray, pano, anything-but-piano-black) and since I'm looking at the lowest priced cars I thought I was seeing a pattern that the least expensive cars are the ones to sell the quickest. This is sort of true, but there's definitely not a smooth slope. I created this chart from the CPO "sold" data showing the average price of a car sold after a certain number of days from 0 to 32. It's all over the place, but it's true that least expensive cars do sell quickly.