To me this theory has always made the most sense to me. I wonder what used sales were vs new? Maybe Tesla realized people were spending good money on a lot of used cars and thought why not try and push them into new ones? They have to make more money off new sales, although at some of their trade in offer prices who really knows LOL!
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Tesla Used Inventory Down 30%?
- Thread starter spy4007
- Start date
To me this theory has always made the most sense to me. I wonder what used sales were vs new? Maybe Tesla realized people were spending good money on a lot of used cars and thought why not try and push them into new ones? They have to make more money off new sales, although at some of their trade in offer prices who really knows LOL!
It’s a win win for Tesla. They low ball your trade in, sell you a new car with higher margin and then sell your used trade-in later for 30-40% more than what they offered you. Can’t lose in that game.
Unfortunately it doesn’t always work that way for Tesla. They gave me over $37,000 for my used Model S. Let it sit at an auto auction facility for five months. And finally sold it for $31,000. Tesla’s incredibly incompetent re-marketing of their used cars can be very costly to them.
roblab
Active Member
This is why I sell my cars online. There are several Tesla forums. People seem to want a dealer to sell their used cars because they don't want to bother typing up a for sale ad. Which usually loses them money.
OK, I'll jump in with an opinion. And opinions are like, well you know like ........ So take this with a grain of salt.
Tesla stock is down from $380 to $230 in the past four months. What does Wall Street and their "experts" care about? Profits, now and potential profits in the future. What is a monthly and quarterly measurement metric? NEW CAR SALES. Elon slept on the factory floor to push new car deliveries. Who measures used car sales from a new car manufacturer? I don't know if anyone does, but I do know that new car sales count for a lot (because the "experts tell me so). So it makes all the sense in the world (to me) for TESLA to push new car sales over used car sales, at least in the short term. Thus making new and inventory cars more desirable (and available) than used cars.
Tesla stock is down from $380 to $230 in the past four months. What does Wall Street and their "experts" care about? Profits, now and potential profits in the future. What is a monthly and quarterly measurement metric? NEW CAR SALES. Elon slept on the factory floor to push new car deliveries. Who measures used car sales from a new car manufacturer? I don't know if anyone does, but I do know that new car sales count for a lot (because the "experts tell me so). So it makes all the sense in the world (to me) for TESLA to push new car sales over used car sales, at least in the short term. Thus making new and inventory cars more desirable (and available) than used cars.
I agree with this, but where are all the used cars? Are they literally just sitting around collecting dust? I heard from someone in the Tesla service department (take it for what it's worth) that they are using a lot of those cars for their mobile servicing fleet. If only they could run a solid used/CPO program, they would maximize selling new and used cars simultaneously.
Down to 93 used MS in the US, only 13 w/ face lift and only 31 90D. I am looking to upgrade from 2014 p85 to 2015/2016 p85D or 90D with AP1. There used to be over 100 90Ds just a month ago now down to 31.
Really hoping they all comeback before the end of the quarter. I really need that AWD, last winter in Mammoth had to turn around because I could not make up the hill w/o chains.
Also, any idea if the trade in value any good vs private party? I haven't check around. Any idea what 2014 p85 w/60k miles can bring in?
Thank you,
Dennis
Really hoping they all comeback before the end of the quarter. I really need that AWD, last winter in Mammoth had to turn around because I could not make up the hill w/o chains.
Also, any idea if the trade in value any good vs private party? I haven't check around. Any idea what 2014 p85 w/60k miles can bring in?
Thank you,
Dennis
That theory makes the most sense-- they must be using a large portion of their former used inventory for internal purposes. Given that they're trying to expand their mobile service fleet, that's very possible. If they were just using them as loaners, they'd likely still be listed for sale (atleast that was their practice as of a few months ago).
I'm not buying the theory that they're sitting on hundreds of used cars just to "drive prices up". Sure, that would work for the 100 or so cars they now have for sale, but eventually they'd have to unload the cars they're sitting on (along with more that will come in as lease returns), and they'd take a loss on those.
Given the steady decrease in inventory, I've also been wondering whether they are planning to exit the used business entirely. It seems to have been a complete disaster- although I don't understand why it's so hard when any used car dealer can figure out how to recondition cars and sell them at a profit.
I agree with the above.
1. There is not enough used cars to impact new car sales or drive prices. we are talking 100's of Tesla used car sales/month vs 20k new now with model 3.
2. Using them for mobile fleet might be true. I drove past the Tesla service center in Van Nuys....did not see more than usual MS service cars...but maybe they are being used....
3. They might exit this Used segment completely (my post) ....bring in cars and ship them to Manheim to deal with.
Hi guys. I've longed for a Tesla since the unveiling of the first Roadster and can't wait until a used Model S/3 comes into my price range.
In terms of inventory, I think it's pretty simple. As much as we'd love to believe conspiracies, the reality is that generally corporate incompetence is usually the answer. The horror stories of the used purchasing process from others clearly shows that it's a highly disorganized process to say at the very least. This is what happens when no one is watching the bottom line on every transaction.
The real question isn't why Tesla isn't selling MORE used Teslas, it's why are they selling them AT ALL. You KNOW that a guy like Musk has to hate the early Model S's with a passion. Pre-AP1s with NO autonomous functions what so ever? AP1s made with ONLY one camera and a radar developed by those XXXX at MobileEye? You know he'd just love to crush every single one of those cars and get people into the latest version. People who haven't upgraded to the latest UI? Grr! Cars with those "crappy" earlier designs? Blah!
My bet is that Musk was pressured into doing the CPO route and/or maybe he had a different thinking from it. When whatever went wrong with that process (I honestly haven't followed it to know) which turned it into a "Used" process, you can envision the discussion - "we have to give them something if we aren't going to have history available of the vehicle, etc, etc, so just slap a warranty on it. 4 years for newer ones, 2 years for older ones.
But now, I'm betting it's being a PITA for them. They are realizing that the the 4 year warranty which extends the factory warranty by 3 years in some cases now has consumers realizing that its very appealing and directly competing with new cars. I mean, in the past, I've always wanted to get a fully loaded, brand new Model S, but now I realize how much depreciation is there and how I could get one just a few years old for half the cost. Others will think that too.
The 2 year warranty vehicles are probably becoming losing transactions for Tesla too. Think about it. Those 2013s have been out of the factory 4 year warranty for quite awhile now and probably have a whole ton of problems where it isn't a critical failure, but needs to be fixed but wasn't fixed because of cost. I bet as soon as they are sold to their new owners, they are going back to the shop for TPS and door handle issues and new DUs and such. Heck, if I were to get one, you'd bet your butt that I'd get anything that could possibly be replaced to be replaced with the latest revision.
My prediction? Within 2 years, Tesla will stop selling Used altogether.
In terms of inventory, I think it's pretty simple. As much as we'd love to believe conspiracies, the reality is that generally corporate incompetence is usually the answer. The horror stories of the used purchasing process from others clearly shows that it's a highly disorganized process to say at the very least. This is what happens when no one is watching the bottom line on every transaction.
The real question isn't why Tesla isn't selling MORE used Teslas, it's why are they selling them AT ALL. You KNOW that a guy like Musk has to hate the early Model S's with a passion. Pre-AP1s with NO autonomous functions what so ever? AP1s made with ONLY one camera and a radar developed by those XXXX at MobileEye? You know he'd just love to crush every single one of those cars and get people into the latest version. People who haven't upgraded to the latest UI? Grr! Cars with those "crappy" earlier designs? Blah!
My bet is that Musk was pressured into doing the CPO route and/or maybe he had a different thinking from it. When whatever went wrong with that process (I honestly haven't followed it to know) which turned it into a "Used" process, you can envision the discussion - "we have to give them something if we aren't going to have history available of the vehicle, etc, etc, so just slap a warranty on it. 4 years for newer ones, 2 years for older ones.
But now, I'm betting it's being a PITA for them. They are realizing that the the 4 year warranty which extends the factory warranty by 3 years in some cases now has consumers realizing that its very appealing and directly competing with new cars. I mean, in the past, I've always wanted to get a fully loaded, brand new Model S, but now I realize how much depreciation is there and how I could get one just a few years old for half the cost. Others will think that too.
The 2 year warranty vehicles are probably becoming losing transactions for Tesla too. Think about it. Those 2013s have been out of the factory 4 year warranty for quite awhile now and probably have a whole ton of problems where it isn't a critical failure, but needs to be fixed but wasn't fixed because of cost. I bet as soon as they are sold to their new owners, they are going back to the shop for TPS and door handle issues and new DUs and such. Heck, if I were to get one, you'd bet your butt that I'd get anything that could possibly be replaced to be replaced with the latest revision.
My prediction? Within 2 years, Tesla will stop selling Used altogether.
Super_Popular
Well-Known Member
Your prediction I can tell you now is wrong. Tesla makes a butt load of money off it's used Tesla sales. It's not going any where.
Yeah, at the very least, it doesn't seem like Musk pays much attention to the used car process. From what I can tell, nothing gets done there unless it has his attention (which itself is a pretty dysfunctional way to run a business). One reason for them to stay in the market is that it helps to prop up used car values which is important to maintaining decent residual values for new car leasing. That being said, I'm not sure the way they're running it currently is helping.
It would be stupid to stop selling used. They already have the infrastructure in place, and they don’t just take model 3 sales from them. They bring new people into the brand and used cars are more profitable long term. New cars are usually called “skinny deals “ because you just want to push them out the door. Traditionally, The money is mostly made on parts and service, the back end. If anything used helps to expand the customer base and take away sales from competitors.
"used cars are more profitable long term"....is this true with Electric cars and with the 4/yr warranty that Tesla gives with the non-dealer model? I do not know the used car economics like you might, but it seems to me, as a simple viewer of the last few years, Tesla does not value used cars as a valuable part of their business equation: Loss of CPO program big reduction in # of used cars available through Tesla.... Just my observations.
Please help me understand how you know this and how it is true? If it were true, wouldn't Tesla take a much more aggressive and have higher volume business in used Tesla's? It appears, which is the point of this thread, they are contracting from this used business.
We don’t know their internal numbers but they seem to be bad at figuring out the used car game among many other things. Exiting the market wouldn’t be good for their stock, so they will stick with it until they get it right.
At this point they can easily afford to sit on an extra few thousand cars and use them as loaners to prop up used model s/3 values.
You do pay more for the warranty cars, so not like they can’t make money there... Tesla can call it cpo or used or pre loved or one of a kind... it’s still a used car and I think they are just figuring out what works best.
At this point they can easily afford to sit on an extra few thousand cars and use them as loaners to prop up used model s/3 values.
You do pay more for the warranty cars, so not like they can’t make money there... Tesla can call it cpo or used or pre loved or one of a kind... it’s still a used car and I think they are just figuring out what works best.
I just bought a used S 85D from Tesla and they shipped my car to NY for no reason after I told them I would fly and pick it up. Their used car program is not run well and they out source the shipping to a third party. They need to take that back in house.
And if they were getting out of used why would they sell repaired cars? I think they see the used market as a huge money maker and are trying to push used out. The other aspect that messed them up was most of the used car advisors are new to the auto biz and very young with no experience which I think is hurting them as well.
The main reason I bought used from Tesla was the warranty. After ordering a car on 5/2 and waiting till 5/28 for delivery I probably will hang onto this one for a really long time. It’s sad to see the used car market has gone down hill so much for such an awesome car. I also want to thank you guys for input and sharing ideas love the forums.
And if they were getting out of used why would they sell repaired cars? I think they see the used market as a huge money maker and are trying to push used out. The other aspect that messed them up was most of the used car advisors are new to the auto biz and very young with no experience which I think is hurting them as well.
The main reason I bought used from Tesla was the warranty. After ordering a car on 5/2 and waiting till 5/28 for delivery I probably will hang onto this one for a really long time. It’s sad to see the used car market has gone down hill so much for such an awesome car. I also want to thank you guys for input and sharing ideas love the forums.
DanCar
Active Member
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