What happened to the cpo inventory?

[electracity]

But isn't this a matter of incurred depreciation and what the market will pay?

Assuming the wholesaler marks the price of the car up and manages to price it at a point where it will sell, didn't Tesla just loose that delta between the price Tesla sold the car to the wholesaler and the price a consumer paid to buy the car from a wholesaler?

Wouldn't tesla then be forgoing revenue for the sake of trying to artificially hold up the value of a car beyond what the market is willing to pay?

Tesla would steadily accumulate less desirable cars. That looks bad, and is bad for cash flow. Tesla makes a nice margin on the more desirable CPO, and unloads the rest a near cost. Since they took these cars in trade for a new vehicle, it is all good.

Tesla practice is likely industry standard, especially in luxury brands. Neither Tesla or BMW want a huge lot of used cars eating up capital and steadily depreciating.

Every premium car maker will forgo low margin sales to preserve the perception of exclusivity.

 

[MsElectric]

Tesla would steadily accumulate less desirable cars. That looks bad, and is bad for cash flow. Tesla makes a nice margin on the more desirable CPO, and unloads the rest a near cost. Since they took these cars in trade for a new vehicle, it is all good.

Tesla practice is likely industry standard, especially in luxury brands. Neither Tesla or BMW want a huge lot of used cars eating up capital and steadily depreciating.

I would still prefer for Tesla to get the maximum benefit and profit from their inventory of CPO cars rather than a middleman.

I don't think there is such a thing as an undesirable Tesla They are all exceptional cars. If a car has not sold as a CPO car, it just means the car is priced too high. My point is rather than sell the car to a wholesaler at a 25% discount, why not sell it on their own to a customer at a 15% discount and Tesla gets an extra 10% benefit on the sale.

This practice is definitely not industry standard in the sense that other premium car manufacturers have thousands of cars in their inventory. Other premium car manufacturers sell as many CPO cars as they can. The cars they auction off are cars with excess miles, accident damage, excess wear and tear or other major issues. It's hard to imagine that 2/3 of the CPO cars that are no longer part of the CPO inventory had such major issues.

 

[Skotty]

What would be especially annoying for me if they did eliminate most of their CPO inventory is that I specifically want to buy from Tesla Motors, not from a 3rd party. I want to directly contribute to Tesla's success by buying their product from them, and the CPO inventory disappearing would prevent me from doing that.

Don't bother mentioning the 3. I'm not waiting 2...3...4 more years. I've already been waiting for 3 years and I'm done waiting. A 70 won't quite work either, as I have to weekly drive very long distances and therefore really want the bigger battery. Also, I deeply miss performance, and want something that is competitive with my prior Ford Mustang GT on performance. A CPO P85 was looking to be the perfect option, just slightly out of reach (I'm within just weeks of being able to buy), and to have that option ripped away at the last minute...well, just the thought of it is really starting to make my ears smoke.

However, I need to remain calm. Could still just be a temporary de-listing for some reason, and I still might find something on the greatly reduced inventory, though I would probably have to make deeper compromises.

Just to give you an idea of how the inventory difference affects things, I wrote my own application to search CPO inventory for cars that meet my preferences. Before the inventory drop, there were about 10 matches, about 3 of them close matches to what I want. Now there is 1 match which was one of the lowest matches from before.

 

[Curryx]

Hope they do post some more cars back up... I was just about to get started with alliant on a loan.

 

[Bimbels]

What would be especially annoying for me if they did eliminate most of their CPO inventory is that I specifically want to buy from Tesla Motors, not from a 3rd party. I want to directly contribute to Tesla's success by buying their product from them, and the CPO inventory disappearing would prevent me from doing that.

Don't bother mentioning the 3. I'm not waiting 2...3...4 more years. I've already been waiting for 3 years and I'm done waiting. A 70 won't quite work either, as I have to weekly drive very long distances and therefore really want the bigger battery. Also, I deeply miss performance, and want something that is competitive with my prior Ford Mustang GT on performance. A CPO P85 was looking to be the perfect option, just slightly out of reach (I'm within just weeks of being able to buy), and to have that option ripped away at the last minute...well, just the thought of it is really starting to make my ears smoke.

However, I need to remain calm. Could still just be a temporary de-listing for some reason, and I still might find something on the greatly reduced inventory, though I would probably have to make deeper compromises.

Just to give you an idea of how the inventory difference affects things, I wrote my own application to search CPO inventory for cars that meet my preferences. Before the inventory drop, there were about 10 matches, about 3 of them close matches to what I want. Now there is 1 match which was one of the lowest matches from before.

Skotty just curious what your long drive is? My commute is 180 miles, husband's is 300. Both have great SC coverage and because of that we have had no issues at all with our 70D. Even this cold winter in NE.

We thought hard about whether the extra $$ was worth it or not because of our commutes. We decided that it would mean a few (like literally, 10 minutes) extra of supercharging every once in a while depending on conditions - and decided we could live with the 70D. Money was not a constraint - only our practicality getting over spending so much on any car haha. We still feel good about our decision.

I can't speak to the lack of performance - only that every person we have ever taken for a ride in the car can't believe we have the "slow" one.

 

[dgpcolorado]

If they weren't selling quickly enough, why not lower the prices a bit? Reminds me of the de Beers diamond cartel!

If the missing cars don't return I guess will be glad I got my CPO ordered before all the lower priced ones disappeared. Even though I think all the S60s should be at lower prices to begin with.

 

[gizmoboy]

More will accumulate over time even if they just did flush slow moving inventory.

Holding onto them for more than a month or two does little good for Tesla, so I certainly understand why they'd want them off their books and constantly dropping price is not good optics.

 

[DoubleDownOn9]

I don't think it will be hard to find a used Model S. As the X deliveries happen people are going to be selling their 2013s. People will also be selling their 2014s in order to get autopilot cars. A big CPO really helps to crash the value of existing cars. What you don't want to have happen is people considering getting a 5 year old Model S or a Model III. They need to keep re-sale values above $50k for another 2-3 years for the Model S.

 

[Troy]

According to the 10 Feb shareholder letter, in Q4 2015 production was 14,037 units and deliveries were 17,478. Tesla delivered 3,441 vehicles they didn't produce in Q4. This graph explains the situation perfectly:

http://marketrealist.com/2016/02/caution-another-delay-model-x-production-hurt-tesla/

 

[MP3Mike]

I don't think there is such a thing as an undesirable Tesla They are all exceptional cars. If a car has not sold as a CPO car, it just means the car is priced too high. My point is rather than sell the car to a wholesaler at a 25% discount, why not sell it on their own to a customer at a 15% discount and Tesla gets an extra 10% benefit on the sale.

Probably because when they unload them they don't come with the CPO warranty, it reverts to the original 4 years/50k warranty. Maybe that 10% is how they are paying for the new CPO warranty.

 

[eggy]

According to the 10 Feb shareholder letter, in Q4 2015 production was 14,037 units and deliveries were 17,478. Tesla delivered 3,441 vehicles they didn't produce in Q4. This graph explains the situation perfectly:

View attachment 111878 http://marketrealist.com/2016/02/caution-another-delay-model-x-production-hurt-tesla/

Troy,
I would assume that the number for "delivered cars" would only include brand new ones and inventory CPOs. CPOs which were officially sold and registered before should not be counted.
Would you agree?

 

[mrjedistud]

So what do you think is going on. I've seen resets on CPO inventory, but never like this.

 

[Spidy]

Inventory cars are also down. My service center told me I might not get a Model S loaner because most of them were sold off.

Creating the World’s Best Service and Warranty Program | Tesla Motors

 

[Twiglett]

Creating the World’s Best Service and Warranty Program | Tesla Motors

Its most of the high mileage and low priced cars that have disappeared.
The oldest I see is still that P85 posted last April, so its not based of age of listing.
Now everything is >$60K and <35K miles
Maybe to boost Model 3 reservations?

 

[Gizmotoy]

Highly-optioned and low-mileage are a common trait of other manufacturer's CPO programs. Presumably there's a reason for that, and it wouldn't be terribly surprising for Tesla to follow suit. Assuming the rest of the inventory was offloaded, we might see a drop in resale at the bottom end as the cars start to flood the market at lower prices (sans warranty).

 

[brkaus]

Probably because when they unload them they don't come with the CPO warranty, it reverts to the original 4 years/50k warranty. Maybe that 10% is how they are paying for the new CPO warranty.

It isn't just the CPO warranty, although that is likely a larger concern with the higher mileage cars. It's everything that is expected of a CPO. New tires, dings fixed, I've seen people here request that front license plate brackets be removed and bumpers repainted as an extreme example. It all adds up and reduces the profit margin.

 

[BEEZR]

Is it possible this is simply the result of a website or database update? For instance, if you select "Any Location" it only shows 10 cars. Select San Francisco Bay Area and it shows 10 cars. New York, 10. Seattle, 5, etc...

 

[SabrToothSqrl]

GM bought them all, so they could crush them. Because Exxon told them to.

 

[HankLloydRight]

Is it possible this is simply the result of a website or database update? For instance, if you select "Any Location" it only shows 10 cars. Select San Francisco Bay Area and it shows 10 cars. New York, 10. Seattle, 5, etc...

Must be your browser.. "Any location" shows 30 cars for me, and all other locations match the counts on EV-CPO.

 

[Zaphod]

Its most of the high mileage and low priced cars that have disappeared.
The oldest I see is still that P85 posted last April, so its not based of age of listing.
Now everything is >$60K and <35K miles
Maybe to boost Model 3 reservations?

The more I was thinking about this, I did begin to wonder if it was some ploy to play into increasing Model 3 reservations. Remove/eliminate lower cost options to push people into plunking down a reservation. Doubt that is what is going on, but seems plausible enough at any rate.