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

Discussion in 'Tesla, Inc.' started by TSLA Pilot, Feb 25, 2017.

  1. Pezpunk

    Pezpunk Member

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    #101 Pezpunk, Feb 28, 2017
    Last edited: Feb 28, 2017
    your gripe is that you "only" got offered a trade-in value equivalent to 70% of the original price of a car you bought new 2 years ago?

    first of all, greetings, and welcome to Earth! i hope you are enjoying your stay. here on our planet, that's actually a pretty good deal! we welcome you here and look forward to you becoming more aware of this planet's customs!
     
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  2. AnxietyRanger

    AnxietyRanger Well-Known Member

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    Way to miss his point. :D

    Welcome to the planet where people simply do not read what they respond to.
     
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  3. mmd

    mmd Active Member

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    Are you kidding, that a 7 or 14 day listing on a national marketplace like Ebay is not sufficient marketing for a car? Check the other Model S listings on Ebay. None of them are getting too many bids. Ebay also sends out car lists to people who browsed Teslas in the past. How much more marketing do you want Tesla to do? May be they should place a super bowl ad for Tesla CPOs :)

    That car has a "death option" FOR YOU, not the original buyer who paid more than you did. Same with your car. Someone will find a death option to reject it at high enough price.

    Wow, you remind me of the phrase "Let them eat cake " :)
    Let them eat cake - Wikipedia

    First, the 5000+ factory workers with $17-$21/hr are out; they can't even afford insurance for a Tesla.They won't get a loan either. Second, they can't bear the depreciation loss from their long commutes. Have you seen the repair costs and delays for Teslas? A CPO Tesla is still way more expensive for engineer type employees here, who can easily lease a Nissan Leaf or E-golf for under $100 a month, sometimes $49 a month. 80 mile EV is good enough for commute and gets the carpool sticker. Even those Tesla employees who can affod a CPO, may not find CPO tesla as the best option for various reasons. You can't force a certain car on employees; it's employment at will.

    I don't know where you live, but here in CA , PG&E just announced a rate increase (11%?) for electricity. Electric cars may not be cheap to run anymore. An expensive electric car is simply not affordable for most people, even in the upper income brackets.

    If I understand your situation, it is like this:
    You love Tesla and think they are the ONLY one changing the world. You also hold tons of TSLA stock. So, you are desperate to boost their sales numbers, to indirectly help the stock price.
    What you don't realize is that some market conditions may be far beyond Tesla's control. CPO sales/trade in situations is just a small piece of the whole issue of having saturated the premium electric car market.

    In short, I agree with your observation, but don't agree that your solution is good. There are many ways, each with its own drawbacks.
     
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  4. TSLA Pilot

    TSLA Pilot Member

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    Sorry, but I find it hard to believe that Tesla has given it "a lot more thought than either of us."

    Let's look at the evidence:

    1. OA's hate it when someone pulls up in a Tesla and wants to look at a new one. (Because they have to insult customers, good customers, customers that have returned to buy another six-figure car, with an absurd trade in valuation.)

    2. There are many, many Teslas being wholesaled (at probably scary low prices, prices that kill the trade in value for EVERYONE who owns a Tesla) to internet used car lots.

    3. Tesla can't be bothered to provide even a slightly decent search engine on their website.

    4. Perhaps you would you like some actual photographs of your potential six-figure used car? No, Tesla doesn't provide them.

    5. Many have posted about the poor condition of their new-to-them CPO cars, many arriving with extensive, unreported damage.

    Sorry, but I find this to be very, very far from the "best strategy."

    ALL OF THESE INDICATE THAT TESLA CPO IS LONG OVERDUE FOR A REVAMP. TESLA'S SCREWED UP CPO PROGRAM SERVES TO REDUCE THE VALUE OF EVERY TESLA OWNER'S CAR.

    I envision Tesla.com as the "Go To" place for ALL things Tesla, to include the very important CPO fleet because nearly every CPO car should be a tool to increase the sales of new Teslas.

    Teslas should be rarely found at the various used car lots for that indicates that Tesla lost a customer in a trade in, or simply couldn't sell a car due to their ineptitude.

    The fact that Tesla can't properly market the CPO cars leads to terrible trade in values, and that lowers demand for new Teslas, as I can personally attest to with at least three attempts to upgrade our most recent Teslas.

    Here's a tip: if a customer wants to buy more of your product, make it easy for them to do so . . . not painful for both parties.

    One could argue that at the end of the day, EVERYTHING hinges on the sales of new Teslas: the transition to sustainable transport, the success or failure of Tesla as a company, and the long-term usability of our one and only planet . . . . All of that matters, no?
     
  5. ShockOnT

    ShockOnT ⚡️⚡️⚡️⚡️⚡️

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    I know it's painful but prestige cars always take a massive hit, especially on trade-in. You may be better off selling privately.
    My dad was a motor dealer and I remember hanging around after school one day when he was talking to a customer who wanted to trade in a Saab. Neither of them were too happy, and later my father told me it killed him to offer so little, but he knew he just couldn't shift this guy's car.
    I agree with you that the ultimate mission is to build and sell electric cars as fast as possible. Hopefully the M3 will make it easier for all.
     
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  6. TSLA Pilot

    TSLA Pilot Member

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    Nismode, not to pick on you, but since comments similar to yours have come up on this thread before I will address them now.

    This comment re: the clear wrap on our Teslas is so far from intelligent it falls in to the realm of "head exploding stupid." In fact, if there hadn't been an $11,300 discount for Tesla's "Cost to resell" (which would include the insane "Lose/Lose/Lose" removal of the wrap) in my first trade-in valuation back in December, this thread probably wouldn't exist and I'd be in a new Tesla right now . . . .

    But since I hate it when otherwise intelligent people do stupid things, here we are.

    I fully understand the customization issue. That can be a problem. However, this a clear wrap, something Tesla itself used to offer as a factory option. It is NOT a problem, it's an expensive asset.

    Let me give you an example: Does your car have floor mats?

    Why?

    To protect the carpet from stains, wear, and the abuse of dirty shoes. Dirty shoes are common because we walk on the ground, and the ground frequently has dirt, mud and snow on it. Floor mats are easy and inexpensive to replace as they wear out. Carpet replacement? It's the opposite: hard and expensive.

    So let's extend the metaphor to wraps as it's quite similar. Nearly identical, actually.

    When someone spends thousands of dollars for a clear wrap on their car, they do so because when driving, rocks, debris and other things tend to impact a car's paint. The hood, mirrors, front bumper, A-pillar, etc., all suffer the brunt of those impacts and turn the beautiful factory paint into, well, something that doesn't look very nice. It is very expensive to replace, just like the carpet of a car. Thus, think of clear wrap, or more accurately, Paint Protection Film, as "floor mats for your paint."

    I GET IT: Tesla didn't install the wrap. Fine. So what Tesla needs to do is have an intern draft up the following OFFICIAL TESLA RELEASE:

    Dear CPO Buyer,

    The previous owner of your new CPO Tesla Model ____, VIN __________, had your car wrapped with _________________ brand wrap at a significant cost, as indicated in the documentation he/she provided on Trade In.

    We find the condition of the wrap to be ______________, based on our subjective evaluation and have left it on the car.

    Obviously, we cannot warrant this wrap installation in any way, but do advise that if for some reason you do not like it, it can be removed by nearly any automobile detailing shop or auto body shop at minimal cost, usually one or two hundred dollars. There are also instructions for doing it yourself on line, if you so desire. (Personally, if it was our car we'd keep it on as it helps protect the factory paint for years to come which will enhance your trade in value when it's time for your next Tesla!)

    Sincerely,


    Tesla Motors

    So, rather than pissing off a loyal customer by giving him a reduced trade in value because Tesla will have labor costs to remove a perfectly fine wrap, an expensive wrap that the customer paid to install, and then selling a CPO car that has no wrap, why not convert that "Lose/Lose/Lose" scenario into a Win/Win/Win instead?

    Oh, and it would lead to the sale of more Teslas too . . . .

    This is just another indicator of how screwed up Tesla's trade in/CPO Program is, and how it hurts the sales of new Teslas, which is key to Tesla's success and, possibly, the future of life on our one and only planet.

    Why is this so hard to fathom?
     
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  7. TSLA Pilot

    TSLA Pilot Member

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    Sorry, but I'm afraid you've missed the point. It's not the valuation, per se, but the spread from what they are selling similar CPO cars for on their own website, and the discount for removing thousands of dollars of clear wrap, and the overall loss of the "Big Picture" at Tesla where it would make a lot of sense to breakeven or even lose money on the trade in side of the equation to SELL A NEW TESLA.

    All problems are solved with growing sales of NEW TESLAS.

    Frankly, Teslas SHOULD have lower depreciation than other premium cars because they are so much more superior. The fact that Tesla ends up dumping so many via used car "megastores" on the Internet is a testament to their gross incompetence in this area.

    I have posted earlier that Tesla needs to have targeted marketing on these cars--a lot of people are profoundly ignorant about BEV's and Teslas, even people that should know better. Every parking spot at the EPA (while it exists) should be filled with new Teslas years ago (for the higher pay grades) and CPO Teslas for the lower pay grades. Likewise, there are a host of "green" organizations with whom the purchase of their mailing lists might lead to a wonderful outcome.

    I never finished my MBA so I'm sure there are dozens more ideas out there and they need to be acted upon. Tesla's atrocious marketing of CPO cars hurts ALL of us that buy Telas, and it's just remarkably unintelligent that it's gone on this long.
     
  8. TSLA Pilot

    TSLA Pilot Member

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    Pezpunk, I'd encourage you to read more slowly and thoughtfully as you've missed the point.

    It's NOT the valuation per se, but the entire process by which Tesla handles trade ins. It KILLS the value of every Tesla ever made because of their inept re-marketing of these cars, which then leads to dumping the cars at wholesale auctions, all of which are "not good" for a long list of reasons already addressed.

    I can't/won't re-type my previous posts, but if you'll spend a few minutes doing a "deeper dive" you're sure to be become better informed on the issue here.

    Thank you.
     
  9. lolachampcar

    lolachampcar Well-Known Member

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    TPiolot,
    Please forgive me for not reading through all the posts.
    Tesla is a S. Valley bunch of kids playing at business. They approach cars and customers like an internet business; there are more than they need so they need do nothing to earn them. That worked in the beginning and will slowly fade until, that is, they come out with the quantum leap new IPhone (Model 3) at which point the we have more than we need attitude will once again be re-inforced.

    Tesla decided to get into the CPO business to "control" the secondary sales experience. The high end used car people are better dressed but are still used car salesmen. They will say anything necessary to bag the commission and move product. As cars were finding their way to the secondary market, Tesla was getting tarred by these salesmen with customers that have never had an interaction with Tesla being flat out lied to about the car, its capabilities and how to live with it (charging, superchargers, etc.). Tesla's solution was CPO. Most companies get involved with CPO to manage customer loyalty and keep new car customers from considering another brand. Tesla did it to keep used cars out of other dealer's hands. That is a big difference. On top of that, Tesla can never be competitive with those used car dealers who work on volume, with low overhead and on kickbacks from things like financing products. Tesla's solution was to use their first point of contact with the returning customer (and, in some cases control over trade in sales tax credit) to buy trades on the cheap. Most people do not know any better or can not be bothered to care. I DID notice when Tesla offered me $9K less for my P+ trade then one of their own wholesale ICE trade partners. (before anyone posts, this was a wholesale to wholesale comparison with one of Tesla's own wholesale partners so do not give me this premium cars depreciate stuff - that argument simply does not fly). Tesla single handedly prematurely took 8% out of the wholesale market and continues to treat their returning customers worse than they treat new customers (based on new customers getting competitive trade offers for ICE trades).

    I could site other instances where Tesla has treated their customers in a similar fashion. This practice will not change until Tesla has to earn customers based on something other than having a product no one else has. As Tesla likes to point out, they are different. Most of those differences are good; some are not.
     
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  10. TSLA Pilot

    TSLA Pilot Member

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    I must not have been clear in my postings for you do not understand "my" or Tesla's situation well.

    Let me comment on your thoughts first:

    1. The eBay Tesla had a host defects, already discussed: Seller had ZERO feedback, yet was a car dealer. It's 2017. That's quite remarkable and suspect. The seller provided no "CarFax" equivalent. Another red flag. And there was another issue IIRC. All of note, but also an indicator of how these cars need to be well marketed.

    2. Some people need and want the 3rd Row seating. Many/most or a major portion (all guesses) consider them to a negative option on the "P" class Teslas as most "P" buyers spend more to maximize performance. Mass reduces performance and the 3rd Row Seating and associated structural upgrades add significant mass. The car can be sold, but with negative options it takes longer and will likely sell for less.

    3. Pay rates for Tesla associates are of consequence, BUT Tesla knows who they are, what their credit scores are, how much they make and the overall turnover. I would strongly suggest that getting OUR associates driving our products is a great way to move trade in cars that would otherwise be sold for pennies on the dollar at wholesale used car auctions where they end up at places like TexasDirectAuto.com by the hundreds every year. (And where THEY sell them for a profit--mull that over for a bit please. Why is that?!?) I'm sorry if you don't have the imagination and just can't see it, but the possibilities here as tremendous. Long-term loans at low interest rates, with payroll deduction (i.e. Tesla is paid first), perhaps even combined with our upcoming insurance product, and the joy that comes from driving a Tesla experienced daily by our own associates--what's not to like? Granted, not all will be able to afford even these "good deals" but a lot would, if the program is handled well.

    4. PG&E Rate increase? Bring it on! Are you familiar with the term "death spiral?" Perhaps you might be aware of a company now owned by Tesla called "SolarCity?" Are you aware of Gigafactory 2 which is to manufacture solar cells in 2H 2017 in the largest production plant in our hemisphere? Do you know that BEV's and Solar Panels go together like peanut butter and jelly: PERFECTLY? In our home powered with a 7.5kW SolarCity array we spend about $1/day, or just under $400/year to power the entire home and two Teslas. This reduces our carbon footprint which is why Tesla exists, and that is likely key to leaving a useable planet for future generations.

    6. Yes, Tesla is pretty much the only game in town when it comes to BEVs. Other brands will eventually produce token products to pretend to compete with Tesla, but they can't/won't scale until it's too late for them. Each BEV sold by these brands will be sold at a loss, most likely, just for carbon credits to allow them to sell more SUV's, which defeats the purpose of BEVs.

    In a nutshell, Tesla needs to sell a growing number of NEW cars to both continue to grow and thrive as a company, and to save the planet. One way to do that is by giving current owners great trade in values to get us to upgrade, and to do so often. The remarketing of the Tesla trade ins is a very seriously broken process, this leads to low trade in valuations. Much evidence of this has been provided in the previous five pages.

    My hope is that by sharing my repeat experiences in trying to upgrade from our two 2015's MS's into two newer MS's, this "Broken CPO Program" problem will get some serious attention at Tesla. My hunch is that Elon's focus is on the many other things he's involved with and that he's just accepted losses on this as normal. I feel quite strongly that a "deep dive" into how the program could be revamped, by him or his direct reports, with a serious look into the issues and ideas raised here, might, perhaps, lead to the implementation of some or all of them.

    There's supposedly a sign at NASA that says, "In God we Trust; everyone else bring data."

    Well, the time is long overdue for some experiments to see what happens when Tesla ups trade in values on trade in Teslas, offers low-cost loans to Tesla associates to buy CPO Teslas, target markets CPO's to likely CPO Buyers, etc., etc., etc.

    Thank you for writing.
     
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  11. googlepeakoil

    googlepeakoil Member

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    One of the goals of Tesla is "moving to sustainable transport".
    1. High end sports car
    2. Moderately priced sedan
    3. Model 3.
    It seems to have replaced #2 with a version of #1. The Model S is more expensive than the Roadster ever was! The cheaper Model S's keep being killed off. The S40, and then the S60 with the base price being raised.
    Also - regarding repair costs. Many complaints about $10,000 + repairs for things that would be minor on any other car. A broken steering strutt came in at $13,000. You can check out auction sites on totalled cars and see some with front end damge that wrote the car off. Still a battery, still a drive train. Still most of the car, and sometimes not even chassis damage. Hence how a few people have restored damaged cars for $10k after buying at auction for aprox $10k. One of the most sustainable cars is the least repairable (least sustainable).
    Sig - a model 3 reservation from day 2.
     
  12. Nismode

    Nismode Member

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    Didn't realize you were speaking of a clear wrap, my apologies. Thought your car had a vinyl wrap that was a different color. I'm used to those clear wraps being referred to as films, or clear bra.

     
  13. Pezpunk

    Pezpunk Member

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    i didn't read every one of your 46 dissertations in this thread, but i read enough to know it all stemmed from you being miffed about their trade-in offer. the rest just seems like rationalization of your indignation.
     
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  14. stopcrazypp

    stopcrazypp Well-Known Member

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    I didn't bother to read all the posts in detail in this thread, but I believe this point was not mentioned before. When you are trading in a Tesla and buying a new one, it does not generate a 100% new sale (esp. for a low mileage trade-in). Rather what it does is displace (partially or fully) another new Tesla sale, because someone that would have bought a new Tesla can likely choose to buy a low mileage CPO. Thus there is little incentive for Tesla to offer a higher trade-in price for a used Tesla.

    For an ICE (or non-Tesla EV) however, the situation is different. Someone trading in a non-Tesla car means a conquest sale and won't likely be displacing new Tesla sales. Thus Tesla can value these trade-ins higher.

    As @lolachampcar pointed out, the primary goal of the CPO program is largely to control the sale of used Teslas, and avoid the problem of used cars salespeople giving false information and leading to a poor ownership experience. It's not really being used as a repeat owner incentive program as you seem to want it to be.
     
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  15. Az_Rael

    Az_Rael Supporting Member

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    FYI: Tesla doesnt always remove clear wraps on CPOs. Mine came with what appears to be a full wrap. The only portion that was removed was the hood so they could repair a frunk dent.
     
  16. TSLA Pilot

    TSLA Pilot Member

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    Sorry, should have been more clear in my description. Yes, it's the 100% clear PPF; good stuff as it absorbs a lot of damage while leaving the paint blemish free.

    Please forgive if my tone was excessively harsh.
     
  17. TSLA Pilot

    TSLA Pilot Member

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    That's the problem with irresponsible extrapolation--you end up jumping to conclusions and posting comments based on bad assumptions.

    Because you are so massively incorrect and have completely missed the much bigger picture, I'd strongly encourage you to wade deeper before jumping in and making comments.

    Thanks.
     
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  18. TSLA Pilot

    TSLA Pilot Member

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    Noted and interesting. Curious: How long ago was this?

    I ask because this past weekend I was queried at length about the amount of PPF/clear wrap on my car, all of which was used against me in the valuation, much to the OA's chagrin.

    (And, of course, it remains stupid as all get out.)

    Speaking of which . . . now that we're at six pages and it's become a bit of time sink responding (and it since I doubt there's any moving the needle on this problem here), henceforth, rather than posting I think I'll write a note to Jon McNeill. Given his great track record of fixing things, it can't hurt to get some sanity added at Tesla HQ and perhaps he's the guy to do it.

    Thanks to all that added insights and informative comments; much appreciated!
     
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  19. TSLA Pilot

    TSLA Pilot Member

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    But that's the rub: it SHOULD be an owner incentive program. Getting Tesla owners on an iPhone-like replacement cycle would do wonders for Tesla's cash flow via additional new car sales, in addition to a host of other benefits previously noted.

    Imagine how great it would be to pull off the M3 launch withOUT another stock dilution.

    Plus, the current system has a remarkably large percentage of traded in Teslas sent off to used car megastores such as TexasDirectAuto.com so if their plan was to avoid that, well, they've likely failed . . . .

    I cringe at how little they are likely getting for Teslas at wholesale dealer auctions. That's the true waste of funds, which should be directed toward owners looking to upgrade (not to mention the 100% waste on the sales tax credits in those states where it applies due to short-changed Tesla owners selling via private party).

    There is a huge amount of low hanging fruit here; Tesla CPO could be a game changer for Tesla. Let's hope they see the world of possibilities here.
     
  20. Az_Rael

    Az_Rael Supporting Member

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    December 2016, so just a couple of months ago
     

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