How much more damage will Remarketing do to Tesla sales before they figure it out?!?

[TexLaw]

Bah. This thread is a tar baby. I should have known better and spent my time weeding the garden.

 

[TSLA Pilot]

TSLA Pilot, we really tried our best on this forum to help you understand, but cannot help those that do not accept help
BTW, very poor form to mention your wealth on TMC ... we are not impressed and your trade-in value should be of no consequence

"To help me understand" what?

I have yet to read a single cogent reply supporting the status quo of crappy CPO sales results, no CPO search engine, and Hank's report of massive "flushes" of Tesla trade ins to the used car dealers around the globe. Even Teslas OA's dread dealing with Tesla trade ins--that's a great corporate attitude to have and what a message it sends.

All I read is excuses that I am some kind of kook to complain because my offer is $18k LESS than what they're selling a nearly equivalent CPO for. Huh? (The car is like-new and has 8k miles on.) I don't get it.

Too few are understanding the reason we should all WANT high trade in values is to generate more sales of new, full price, Teslas. As a TSLA shareholder, and a resident of Earth, I want that. How about you?

The status quo has stymied at least two sales from us over the past few months, and several others have relayed their "not great" experiences as well.

Sorry about mentioning that TSLA stock makes up the majority of my retirement accounts; I don't know how much it adds up to, and don't really care as it's a long-term deal. I wrote that not to boast, but because I was trying to emphasize that as an owner of a small part of Tesla I'm upset that we're squandering an opportunity here. My two "no sales" don't matter, but they were part of the 10% reduction in cars delivered, and we're likely to see another bad quarter this time around as well the way things are going.

You have to fix these things ASAP in a growth company or lenders get nervous and want less risk/more money. Let's not get anyone nervous, let's just fix the problem with more deliveries of new Teslas, and one great way to do that is get current owners in to buy new ones and trade in their old ones.

Simple, concise, and I'd love to hear anyone else's better ideas than the status quo disaster.

Thx.

 

[TSLA Pilot]

Tesla builds new cars in a factory. Why would they be interested in buying a two year old car at the same price that they can build new ones for?

Not sure what are you talking about here.

They're buying an 18-month old car at the CPO price to help sell a new one at full price.

Selling the new one is where the money is made. Breaking even or even losing a small amount on the trade in is fine if the margins are high on the new one.

The margins are very nice on the new one.

Why is this hard to understand?

 

[TSLA Pilot]

I couldn't disagree more. More customers or more revenue per customer does not mean more profit; often the reverse happens if a business isn't able to scale. Margin is what matters.

Deliveries are down 10%.

That means "less" so there's plenty of ability to scale. Ability to scale is NOT a problem.

Margin, as reported by Elon himself in many venues, is large and getting larger as Tesla gets more leverage with suppliers, many/all of whom are now lining up to work with Tesla now that it's an "it" company.

We'll have to agree to disagree I guess, but I wish you'd support your thoughts more clearly. As stated, I never finished my MBA so what am I missing here?

 

[KJD]

Are you sitting down? Tesla's Trade-In value on our wrapped, flawless, 2015 P90DL (with EVERY AVAILABLE OPTION, less 3rd Row Seats; MSRP $142,200; 8,800 miles), is an insulting $97,600. (And in late-December the Trade-In value was only $101k; that killed that deal too.)

If the price is so bad, why don't you just sell the car yourself on the open market ?

 

[TSLA Pilot]

TSLA Pilot welcome to the real world. A 18.9% markup on trade-in value isn't too bad. There is no guarantee Telsa can sell your car for $116,000. It might take 6 months or more to sell the car and they could get less than $100,000.

Also the Model S deliveries have been down from the 2015 Q4 high for sometime. I'm not sure why you would just decide to have an issue now. Model X deliveries are still growing. Many people are waiting for a Model 3.

Tesla sales efforts on CPO cars are atrocious. The value of $116k is what they currently list a similar P90DL for sale at. If the metal is not moving, which it is not, they dump the cars into the used car auction system. Bad move and it sends buyers to used car lots, and I cringe at how little they're getting on those cars there.

Why not fix the CPO program instead?

Why not use the CPO program as a tool to drive new Tesla sales instead of having OA's cringe when they see one pull up?

I have had the issue for a while, but finally posted about it because I had recent experiences to share on the topic, and because it's been going on for far, far too long.

Waiting for the Model 3? Great. Volume on the M3 won't be around for a hell of a long time and they should have fixed the CPO/trade in issue a long time ago.

May as well start now!

 

[mal_tsla]

Deliveries are down due to supply side, not demand side, right? Tesla is selling every car the factory can build? There isn't a big inventory of new cars building up somewhere?

If so, there's no incentive for them to help anyone into a new car and nothing to be gained by it. If every car is going to sell anyway, minimal trade-in accommodations and max new car margins is where market forces point.

 

[TSLA Pilot]

If the price is so bad, why don't you just sell the car yourself on the open market ?

Because it's a double lose.

In my state we get 100% credit on the trade in taxes; you only pay tax on the difference between the trade in and the price of the new Tesla.

By inadvertently forcing Tesla owners (by a terrible CPO program and low trade in values), it may suggest more to turn to private party sales, as you suggest. This hurts ALL parties:

1. It forces great prospects for new Teslas--people that already own one--to go through the hassle of a private party sale. Hassle ='s less chance of doing it, thus less new Tesla sales.

2. Why pay taxes on a full-price Tesla at 6.25%, again? That hurts and is stupid for it wastes money that should be directed toward a more expensive, higher-margined Tesla, not to state tax coffers.

3. Super low trade in values from Tesla mean there's no reason to go to a Tesla Gallery, so less exposure to the latest and greatest Teslas. Why encourage Tesla owners to look around at what other vendors are offering, especially as new entrants bring BEV's to market? We want the highest trade in values at Tesla so that Tesla customers remains so for life. We want them coming back over and over and over, on a frequent basis, to buy new Teslas.

 

[mmd]

The OP has such flawed logic, I don't know where to start.
1. Listed prices on ev-cpo are not necessarily the fair market value of the car. I can list my home for $2M; doesn't mean it is worth that much. Check how long the P90Ds are sitting on ev-cpo.com. Tesla is not finding it easy to unload the high priced CPO cars.
For a fair price, how about the highest bid price on this P90DL with 14 hours to go, with just 4410 miles? it's not even private party. it's being sold by Maserati dealer.
2016 Tesla Model S P90D | eBay

Time left:14h 3m 31s Sunday, 11:06AM
Current bid: US $90,100.00

Vehicle Description
Fantastic Rare Vehicle! LUDICROUS SPEED UPGRADE, RANGE UPGRADE, BLACK NEXT GENERATION SEATS, CARBON FIBER DECOR ACCENTS,ULTRA HIGH FIDELITY SOUND PACKAGE, PREMIUM INTERIOR AND LIGHTING,SMART AIR SUSPENSION, REAR FACING SEATS AND MORE! Original MSRP $144,200.00 Low mileage Tesla priced to go!! Please call for an appointment to test drive.

Tesla will be taking a loss after puirchasing the OP's car at $97,600 ( or $100,900 ?).

2. CPO prices can be even lower 2 months down the road, when current trade ins will be sold.

3. Selling 5 Teslas to one person doesn't lead to sustainable transportation. The OP is not going to drive 5 times more. That will be more wasteful actually. Keeping 5 parked cars, and consuming the huge battery packs is also actually worse for the environment.

4. The OP can only fight the free market for so long. Why fight and try to distort the reality?

 

[carter_seattle]

I wish you'd support your thoughts more clearly

Your entire argument boils down to a shallow complaint about the trade-in value for your car, with a little bit of window dressing about a dip in QoQ deliveries and a suboptimal CPO website. Sure, Tesla can improve (what company can't) but it's obvious to everyone here that you're hurt that Tesla doesn't love your baby as much as you do.

 

[brkaus]

Your right, moving cars is most important. Instead of overpricing your trade and taking a loss on the CPO resale, they should just drop the price of ALL the new cars by that magic $10-18k you think your trade is underpriced. That would benefit everyone!

 

[TSLA Pilot]

Deliveries are down due to supply side, not demand side, right? Tesla is selling every car the factory can build? There isn't a big inventory of new cars building up somewhere?

If so, there's no incentive for them to help anyone into a new car and nothing to be gained by it. If every car is going to sell anyway, minimal trade-in accommodations and max new car margins is where market forces point.

I have a hunch that the factory could build plenty more cars than they are at the moment, as suggested by the opening of stores/markets in some odd locations, and the negative trend numbers.

Delivery trend lines need an upward trajectory.

One great way to do that is to stop shafting current customers with low trade in values. Better to mine current customers and ply them with the opposite--the best trade in values they'll find anywhere--so as to get them to upgrade. Often please.

EVERY time a Tesla is in for service, of any kind, an email or written proposal should be left in the car to advise of the tremendous trade in value they'll get if they would like to buy the P100D (or equivalent) they had as a loaner . . . that'll solve a lot of delivery problems at Tesla and get the trend line moving in the correct direction.

 

[dennis]

The results speak for themselves with deliveries down 10%, and no one but me here appears to acknowledge the problem, but it's straight from Page 1 of their recent release three days ago:

Introduction | Tesla Motors.

Maybe that is because the rest of us know that the reason deliveries were down 10% is because they had a production slowdown in the transition to AP2, not because of insufficient demand. They communicated that on 1/3/17, and also that orders were up 49% in Q4 in the document you referenced above.

 

[mal_tsla]

I can see your point, if and only if Tesla is making more cars than they can sell or is imminently capable of doing so as you imply.

I think the factory is running full throttle, all things considered (top/down supply chain, model3 capital considerations etc) but I don't think the information needed to be certain of this is public knowledge.

 

[TSLA Pilot]

Your entire argument boils down to a shallow complaint about the trade-in value for your car, with a little bit of window dressing about a dip in QoQ deliveries and a suboptimal CPO website. Sure, Tesla can improve (what company can't) but it's obvious to everyone here that you're hurt that Tesla doesn't love your baby as much as you do.

Wow, you must have missed a lot of the posts.

Hank (of EV-CPO.com fame) has relayed the "flushing" of CPO cars into the wholesale used car auctions--that's a place for Tesla to get some really, really low prices for their Teslas. That kills Tesla's revenue as well and it's bad for a host of other reasons too.

Tesla CPO and trade in values go hand-in-hand. CPO is broken and needs to be a tool, not an anchor, for increased sales of new Teslas because that's where all good things start, with the sale of a new Tesla.

They're trying to sell an equivalent CPO car to mine for $18k more. It's not being marketed well, at all, and it will sit for a long time. Then maybe it'll be in one of the regular CPO wholesale auction "flushes." Either way, it's a bad thing for me as a shareholder, and for me as a customer because it leads to the insult of telling me that my equivalent P90D is worth $18k less (to them, to Tesla) because they don't have their CPO act together and they don't "get it" when it comes to how important CPO is to generate the sale of a new Tesla.

It's all lose, lose, lose and it's dumb.

I don't love "my baby." I love Tesla. I love Tesla's mission. Tesla's mission is so important that our one and only planet's future may rely on Tesla's success.

So when Tesla misses opportunities over and over and over, as they have with us personally, to sell more NEW Teslas, I rant. This is not a new problem and I should have ranted a long time ago, but I have a life outside of trying to fix Tesla.

I can't be more clear. Do you understand the gravity of the issue?

 

[Stirthepot]

Nah, that's retirement money for decades from now.

Being efficient with money isn't the same as being cheap, but I can't squander it.

In this case, I want to give Tesla money, but Tesla makes it hard to do that; that's not a recipe for success and we need all of them we can get.

.

Buying $100k cars isn't efficient, buying any depreciating asset isn't efficient. Trading in a car in perfect shape that performs fine isn't efficient.

If you care so much about saving the planet, buy a new car, or better yet, Walk instead of driving.

Get over it, credibility lost.

 

[HankLloydRight]

Hank (of EV-CPO.com fame) has relayed the "flushing" of CPO cars into the wholesale used car auctions-

I have yet to read a single cogent reply supporting the status quo of crappy CPO sales results, no CPO search engine, and Hank's report of massive "flushes" of Tesla trade ins to the used car dealers around the globe

Actually, I haven't reported "flushes" of CPO cars to wholesalers/auctions. I've only said there are weekly (or bi-weekly) across-the-board price cuts. Sometimes Tesla removes large batches of cars for reasons we don't know (this has happened two or three times). I don't know where those cars go.. many of them are eventually relisted in a few weeks or month later. And some of them probably do end up going to wholesalers and auctions, but I don't track that at all, and have never made such statements.

 

[BestRadar]

Tesla's sales are down because they overpromised everyone in November & December AP 2.0 and never delivered. They also said free Supercharging would end December 31st which they later extended to try keep sales moving.

 

[techmaven]

Tesla's sales are down because they overpromised everyone in November & December AP 2.0 and never delivered. They also said free Supercharging would end December 31st which they later extended to try keep sales moving.

Absolute nonsense. AP 2 was never supposed to be fully delivered in Q4. The delays on the implementation of AP2 was not really known until well after the point where orders would affect Q4 deliveries. Therefore, Q4 delivery miss from the most recent guidance was not linked to AP2 at all. Tesla stated that 2,750 vehicles missed deliveries by 2 days during the Q4 ER call. They had 6,450 vehicles in transit to named customers. Orders were up 24% QoQ, and 52% higher YoY.

You could not be more wrong.

As for free Supercharging, my understanding is that there were circumstances as the result of the end of quarter where they wanted to extend free Supercharging to some customers, and then felt it wasn't fair to only extend for a few. Deliveries != sales.

 

[bonaire]

TslaPilot, I am tracking to fewer deliveries in 17Q1 than 16Q4. But it surely is far better than 16Q1. Thoughts?