When off lease units show up as CPO?

[xanatos]

When should I start expecting the influx of off lease MX to start appearing on the CPO site?

The MX started being sold the 4th quarter of 2016, so leases should be ending around now, but I don't see much change on the CPO site...

 

[mswlogo]

Keep in mind there is no such thing as CPO with Tesla anymore. Used, "As Is" Vehicles is more like it. You do get 4 year 50K warranty and maybe Free Supercharging depending on the deal of the week.

 

[mjptech]

When should I start expecting the influx of off lease MX to start appearing on the CPO site?

The MX started being sold the 4th quarter of 2016, so leases should be ending around now, but I don't see much change on the CPO site...

You mean 2015... At the end of 2016, AP2 X models were in full swing.

There are always off lease X vehicles there, however, the "influx" may not be anymore - some have purchased their leases out, and some are used by Tesla for their own fleet or loaners. And then many are sold at auction and never added to the used car inventory. You can find a lot of these X vehicles at dealerships across the US.

Earlier this year and late last year there were many early AP1 X vehicles on the used site (lease returns).

 

[xanatos]

You mean 2015... At the end of 2016, AP2 X models were in full swing.

There are always off lease X vehicles there, however, the "influx" may not be anymore - some have purchased their leases out, and some are used by Tesla for their own fleet or loaners. And then many are sold at auction and never added to the used car inventory. You can find a lot of these X vehicles at dealerships across the US.

Earlier this year and late last year there were many early AP1 X vehicles on the used site (lease returns).

You are correct, I somehow remembered the wrong date. So I guess I shouldn’t hold my breath for this phantom influx? Was hoping to see them for under 50k but maybe that is just a pipe dream for now...

 

[verygreen]

When should I start expecting the influx of off lease MX to start appearing on the CPO site?

The MX started being sold the 4th quarter of 2016, so leases should be ending around now, but I don't see much change on the CPO site...

um, almost never?

The way leases work is the cars are owned by a separate non-Tesla entity sold off to investors. When cars come off lease the entity is obligated to sell the cars at an auction. At least that's what I've been told.

What are the chances Tesla is buying these cars at an auction to fix and resell?

This is in direct contrast to trade-in where Tesla buys old car.

 

[jboy210]

Tesla seems to now be keeping cars at the end of the lease for resale or other purposes. We just got a lease on a new Model 3 and the contract was very specific that we could not buy the car at the end of the lease.

 

[DanCar]

.... So I guess I shouldn’t hold my breath for this phantom influx? ...

Judging from past memory, peak will be around 3rd week of January. Should see increase by end of this month. By middle of Feb should start to see minimal influx.
This can be verified by downloading to spreadsheet from ev-cpo.com and seeing when most cars start to get listed versus quarter offset.
Tesla Model X US car sales figures
Model X sales:
Q3'2016 = 5,783
Q4'2016 = 5,500
Looks like fewer Model X's this quarter. What is new is that Oct 2016 was first time FSD 2.0 was available, so we should see an influx of AP 2.0 cars.

Was hoping to see them for under 50k but maybe that is just a pipe dream for now...

Likely will happen when Model Y starts shipping in volume. Will shift demand away from Model X. I'll estimate Q3 2020.

 

[EV-CPO]

The way leases work is the cars are owned by a separate non-Tesla entity sold off to investors. When cars come off lease the entity is obligated to sell the cars at an auction. At least that's what I've been told.

What are the chances Tesla is buying these cars at an auction to fix and resell?

This isn't accurate for Tesla. Tesla has been writing leases directly for quite some time now, and they've been publishing their lease return cars on the "used" site up to 6 months before the current lease ends.... hoping to sell these 'just-off-lease' cars even before the leases have ended so they aren't sitting on any lease return inventory (that was Elon's directive, I've been told -- I'm not sure how successful that has been). On the Tesla site, these were often listed as "Available starting x/y/z" which was one day after the lease end date. Since they started doing this, they've listed 567 Model S and 66 Model X lease returns.

But to answer the OP question, there never really was or is an "influx" of lease returns for reasons already stated above. People do buy-backs or lease extensions.. and not all lease returns are in the condition for Tesla to resell, they keep them for loaners or auction them off.

 

[verygreen]

Tesla has been writing leases directly for quite some time now,

They sell off the leases in tranches though. See e.g. here: Tesla Sells $837 Million of Auto-Lease Bonds

Once the bond is formed the cars don't belong to Tesla anymore they just become the servicer of payments. Typically terms include auctioning cars at the end of lease, though obviously I did not see particular Tesla bond prospectus.

I do have one of these cars leased directly through Tesla that they service and (I presume) sold off i none of these bonds.

hoping to sell these 'just-off-lease' cars even before the leases have ended so they aren't sitting on any lease return inventory

Hm, that's weird but I guess that could be a substitute for auction to if the price is not any lower than residual promised to the bondholders.

 

[verygreen]

People do buy-backs or lease extensions

btw this is going to change I think. Due to significant price drops in Jan 2019 there's no sense to buy back the leases anymore. e.g. my X 100D residual is $75k There's absolutely zero sense to buy it back at this price, none whatsoever. I can get a new one at close to that.

 

[verygreen]

Judging from past memory, peak will be around 3rd week of January

are you sure these were not trade-in vehicles from the typical EoQ/EoY push?

 

[EV-CPO]

hey sell off the leases in tranches though. See e.g. here: Tesla Sells $837 Million of Auto-Lease Bonds

That doesn't mean they sell them all off, though. The cars listed online were definitely listed separately as lease returns, and in fact they substituted the VIN with a fabricated ID code, prefixed with "LR" or "Lease Return". Here's a sampling of Lease Return vehicles... note the ID in the "VIN" column. All of these cars had an availability date in the near future.

 

[verygreen]

That doesn't mean they sell them all off, though. The cars listed online were definitely listed separately as lease returns, and in fact they substituted the VIN with a fabricated ID code, prefixed with "LR" or "Lease Return". Here's a sampling of Lease Return vehicles... note the ID in the "VIN" column. All of these cars had an availability date in the near future.

View attachment 484352

I understand what you are saying. I I am no big financial guy (or any size at all) but this is how the bonds are typically structured. Once the bonds are sold off Tesla no longer owns the cars, bondholders do.

Of course it does not mean that they package all the leases into bonds (is this what you meant?) but one would think they'd try to do with as many as they can to free up capital.

Also I understand it's a limited snapshot you included, but all cars listed are AP1, could it be those that still had guaranteed value and as such were unbondable for whatever reason?

 

[EV-CPO]

Of course it does not mean that they package all the leases into bonds (is this what you meant?)

Yes.

Also, the bulk of the lease returns are AP1, but there are many AP2 ones as well (more MX than MS).

 

[mjptech]

Tesla seems to now be keeping cars at the end of the lease for resale or other purposes. We just got a lease on a new Model 3 and the contract was very specific that we could not buy the car at the end of the lease.

Model 3 leases were changed earlier this year to not allow you to buy the car. This was around the time of the Tesla autonomy day presentation as they will be repurposing the Model 3 vehicles for use with their magical autonomous car share fleet.

 

[BigD0g]

Model 3 leases were changed earlier this year to not allow you to buy the car. This was around the time of the Tesla autonomy day presentation as they will be repurposing the Model 3 vehicles for use with their magical autonomous car share fleet.

Yah, Tesla's going to have a glut of 3's to resell if they they in the next 3 years they have this magical taxi fleet making them money.

 

[BulldogsRus]

Tesla seems to now be keeping cars at the end of the lease for resale or other purposes. We just got a lease on a new Model 3 and the contract was very specific that we could not buy the car at the end of the lease.

My understanding was this was only put in place for the Model 3 when it was announced they would offer leasing on them.