Hello, assume someone with an earlier reservation number receives their model 3 in late 2017. Wouldn't the car's value immediate appreciate upon delivery? Considering demand will be greatly backed up what do you think a 50k model 3 would sale for if the owner immediately put it on the market?
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There might be some immediate demand, but I am not sure I'd count on making a ton of profit. I don't see a ton of people wanting to overpay for a $50k model 3 when a base or CPO S is not much more. Also, as with other Teslas, the federal tax credit immediately devalues the car.
If you are really asking whether you should spend $50k on a 3 for speculative purposes, it seems pretty risky to me. I'd be sure you actually wanted and can afford it in case you have to keep it.
If you are really asking whether you should spend $50k on a 3 for speculative purposes, it seems pretty risky to me. I'd be sure you actually wanted and can afford it in case you have to keep it.
I have no idea just what price a new model 3 would command but I am sure that the seller could find a buyer who would pay thousands more than the seller paid.
Regardless of the fact that there is nothing illegal about what you describe (selling a brand new Model 3 right after taking delivery) I dislike speculators who try to take advantage of scarcity. Yes, I know that pricing is based on supply and demand, this is just capitalism at work, etc..
In this particular case, when there are hundreds of thousands of Model 3 reservations made by people who have been waiting well over a year for their car, there will clearly be demand.
You wouldn't happen to have an early Model 3 reservation, would you?
Queue the intense debate about the "free market at work" vs. "greedy car flippers"...
Regardless of the fact that there is nothing illegal about what you describe (selling a brand new Model 3 right after taking delivery) I dislike speculators who try to take advantage of scarcity. Yes, I know that pricing is based on supply and demand, this is just capitalism at work, etc..
In this particular case, when there are hundreds of thousands of Model 3 reservations made by people who have been waiting well over a year for their car, there will clearly be demand.
You wouldn't happen to have an early Model 3 reservation, would you?
Queue the intense debate about the "free market at work" vs. "greedy car flippers"...
JeffK
Well-Known Member
The one thing that would be illegal is trying to get the tax credit... they might consider it fraud if you simply flipped the car.
Instead nobody gets that credit and you just wasted time for those looking to get the credit. Imagine how pissed you'd be if you were the guy who takes delivery one day after the full credit expires. Sure you'd get the half credit, but if it wasn't for that darned car flipper you'd potentially be looking at $3750 more.
I'm basically saying it's a dick move, please don't do it.
JeffK
Well-Known Member
1-2 years after the first deliveries it'll be a whole new world. There will be more competition and Tesla will probably introduce new features in the Model 3, meaning the original Model 3 will be still awesome, but slightly outdated causing its value to decrease..
I'm getting really big into playing the electric guitar and I just wanted to say that there are many "boutique" guitar pedal builders that have over a year waiting list for their top pedals (i'm currently on one). People are getting on the list, purchasing one for about $300, and then turning around and selling them for over 100% profit. Heck, I've seen some listed for close to 300% the original cost. AND PEOPLE ARE BUYING THEM.
So I would probably bet money that people will take advantage of supply and demand in the first few months of the release and make a decent profit. I think that some people will still overpay for an optioned model 3 vs an un-optioned model S. They would be priced about the same in the end.
So I would probably bet money that people will take advantage of supply and demand in the first few months of the release and make a decent profit. I think that some people will still overpay for an optioned model 3 vs an un-optioned model S. They would be priced about the same in the end.
First model 3s shipped will be fully loaded.. $80k minimum cars. No way a $50k model 3 will ship early. Ask all the folks who ordered MX.. Never wondered why none of the first model X on the road were 75Ds?
They will start with bigger battery pack and likely force AWD and air suspension. They will likely fill tens of thousands of such orders for these cars, make big profit margins on it, surprise Wall Street expectations (instantly freeing up access to a lot more capital something which they desperately need), and use that as an opportunity to make the economies of scale to produce a cheaper model 3.
This is why they removed our position in the queue from their website. As a March 31st reservation holder who lined up at 6 am who doesn't plan to spend money more than $50-$55k, I wish that was not going to happen, but it's all written.
Back to your original question I am not sure a fully loaded 3 will hold its resale value that well.
The first cars will go to employees, not all employees will order fully loaded vehicles, so there will be some $50K cars shipped in the first few months.
To the original question though, you might be able to make a profit on it but you also have to consider the taxes you'll pay, destination fee, documentation charges, initial title and all the other costs involved. All of that will add thousands to the $50K price paid, then, as Boourns mentioned, you'll need to subtract something for the tax credit from it, since no one will want to give you full price knowing you're getting an additional $7,500 later. Also, since you've already titled it, it'll be a used car, regardless of the number of mile on it so there will be a lose of value for that.
All in all, you're not likely to make much, if any, profit.
SageBrush
REJECT Fascism
I'll let you know -- 1-2 years after the first cars are produced.
As a speculation it is a dumb bet, not the least because the speculator eats the sales tax.
JeffK
Well-Known Member
That is... unless you sell it to Ford.
Ford Spent $200,000 to Dissect a Limited-Edition Tesla Model X
Ford Spent $200,000 to Dissect a Limited-Edition Tesla Model X
When you're selling a simple item like a pedal or a shiny new gaming system, i think you have a greater potential for buyers. there aren't tons of options, and they may end up being an extra $100 here or there. when you get into cars, people aren't going to want to pay thousands for features they didn't want, on top of paying a premium over retail -- and most of the people who CAN, probably already own an S/X.
habanero69
I Dont Need Cialis. I Drive an EV.
N5329K
Active Member
First gen Priuses had a six-month wait (or longer) and were sold (by dealers) or resold (by new owners) for more than the manufacturer's list price.
Robin
Robin
Besides potential tax credits issues I don't think there would be anything wrong with someone reselling a model 3. If I had the means and no reservation I would pay a slight premium myself to get the car immediately instead of waiting 2+ years (from the time of release).
JeffK
Well-Known Member
Yes, thats exactly how the tax credit expires... by date!
There are four quarters per year
Quarter 1 (Q1): January 1 - March 31
Quarter 2 (Q2): April 1 - June 30
Quarter 3 (Q3): July 1 - September 30
Quarter 4 (Q4): October 1 - December 31.
So the key dates for the pissed off guy are Jan 1st, Apr 1st, July 1st, or Oct 1st. If a single day earlier then he'd be in the previous quarter.
Hopefully this makes sense to you now. Reread my post and the "...takes delivery one day after the full credit expires." part will click for you.
The full credit could expire on a March 31st, June 30th, Sept 30th, or Dec 31st. The half and the quarter credit will do the same on one of those dates.
Basic point is, if you get bumped from one of the expiration dates to the first day on the next quarter then you're screwed.
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ChadS
Last tank of gas: March 2009
People wondered the same thing with Tesla's earlier vehicle releases. Each time 1 or 2 people got lucky and turned a profit, but that was it.
I think it will be especially hard to get a high price for the 3 given that its key attribute over existing Tesla vehicles is...its low price. Sure, there's always a chance that you could find somebody with tons of money that never heard of the car before and wants one right away and is willing to take your options and go through you (which would likely involve flying somewhere) to get the vehicle - and don't mind missing out on the tax credit when they buy your used vehicle. But I don't think there will be many people like that; in fact I suspect there will be more people trying to flip their early cars for a profit and then take delivery of their second order.
Keep in mind that those with an early "reservation" (including employees) are in line to be among the first to place an order. An early reservation slot does NOT determine delivery order; what you order and where you live does that. So people in a hurry to get a 3 and willing to spend a lot could just order a 3 with everything, and then they'd get it early too. (One possible exception is that somebody in a late delivery area might be willing to pay to get access to an early California car).
And as noted above, if money is no object but time is, the 3 won't have anything that the S doesn't, so buyers always have that option too. (Yes the 3 will be smaller and I am one looking forward to that; but the size difference isn't enormous and I don't think it's worth a ton of money to get a smaller, unproven car no faster than you could get a larger, proven car that will retain its value better). Sure, some may prefer the 3, but I think this option sets a cap on just how much they will be willing to pay to get one.
I think it will be especially hard to get a high price for the 3 given that its key attribute over existing Tesla vehicles is...its low price. Sure, there's always a chance that you could find somebody with tons of money that never heard of the car before and wants one right away and is willing to take your options and go through you (which would likely involve flying somewhere) to get the vehicle - and don't mind missing out on the tax credit when they buy your used vehicle. But I don't think there will be many people like that; in fact I suspect there will be more people trying to flip their early cars for a profit and then take delivery of their second order.
Keep in mind that those with an early "reservation" (including employees) are in line to be among the first to place an order. An early reservation slot does NOT determine delivery order; what you order and where you live does that. So people in a hurry to get a 3 and willing to spend a lot could just order a 3 with everything, and then they'd get it early too. (One possible exception is that somebody in a late delivery area might be willing to pay to get access to an early California car).
And as noted above, if money is no object but time is, the 3 won't have anything that the S doesn't, so buyers always have that option too. (Yes the 3 will be smaller and I am one looking forward to that; but the size difference isn't enormous and I don't think it's worth a ton of money to get a smaller, unproven car no faster than you could get a larger, proven car that will retain its value better). Sure, some may prefer the 3, but I think this option sets a cap on just how much they will be willing to pay to get one.
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