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What happened to the cpo inventory?

Discussion in 'Model S' started by Nototrader, Feb 17, 2016.

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  1. electracity

    electracity Active Member

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    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.
     
  2. MsElectric

    MsElectric Active Member

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    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.
     
  3. Skotty

    Skotty 2014 Model S P85

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    #23 Skotty, Feb 19, 2016
    Last edited: Feb 19, 2016
    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.
     
  4. Curryx

    Curryx Member

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

    Bimbels GoldMember

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    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.
     
  6. dgpcolorado

    dgpcolorado high altitude member

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    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.
     
  7. gizmoboy

    gizmoboy Member

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    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.
     
  8. DoubleDownOn9

    DoubleDownOn9 Member

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    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.
     
  9. Troy

    Troy Active Member

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  10. MP3Mike

    MP3Mike Well-Known Member

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    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.
     
  11. eggy

    eggy Member

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    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?
     
  12. mrjedistud

    mrjedistud Member

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

    Spidy Active Member

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  14. Twiglett

    Twiglett Single pedal driver

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  15. Gizmotoy

    Gizmotoy Active Member

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    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).
     
  16. brkaus

    brkaus Well-Known Member

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    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.
     
  17. BEEZR

    BEEZR Member

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    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...
     
  18. SabrToothSqrl

    SabrToothSqrl Active Member

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

    HankLloydRight No Roads

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

    Zaphod Galaxy President (former)

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    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.
     

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