Tesla Undecided On Whether Or Not To Guaranteed Residual Value On Model S Outside Of U.S.


Tesla Model S In UK

Tesla Model S In UK

Tesla Model S In UK

Tesla Model S In UK

Tesla guarantees the residual value of the Model S in the U.S., but will the automaker take that same approach elsewhere around the world?

Well, according to Business Car, Tesla seems on the fence in regards to spreading this guaranteed residual outside of U.S. borders.  Georg Ell, Tesla Motors UK and Ireland director, told Business Car that Tesla has not yet decided if it will follow that guaranteed residual format in the UK.

It took Tesla Motors quite some time after launching the Model S to get the guaranteed residual plan in place for the U.S. and, as we know, the Model S launched this summer in the UK, so perhaps in a few months or years Tesla will implement the guaranteed residual over seas, perhaps starting with the UK.

For a refresher on how the guaranteed residual works in the U.S., here’s Business Car’s statement on the subject:

“Tesla is guaranteeing US Model S customers 50% of the value of the vehicle after three years. It is also allowing US customers who have bought on finance to sell their Model S back to Tesla with the value equal to 50% of the original base purchase price of the 60kWh Model S plus 43% of the original purchase price for all of the options.”

And a snippet of Tesla’s statement from way back when:

“Tesla Motors announced today that it is raising the Model S resale value guarantee to be the highest of any premium sedan brand made in volume (excludes rare, low volume or limited edition vehicles). Buying a Model S through the Tesla financing offering now comes with a guarantee that the resale value will be higher than that of BMW, Audi, Mercedes, Lexus or Jaguar.”

Source: Business Car

Categories: Tesla

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4 Comments on "Tesla Undecided On Whether Or Not To Guaranteed Residual Value On Model S Outside Of U.S."

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While the stated purpose of the Model S GRV program is to provide downside protection to early owners from the normal luxury car depreciation hit, the real reason is the lack of a market based residual makes consumer leading in the US impossible. In some EU countries (UK) you can lease so Tesla does not need the GRV program.

Watch for a US leasing program as Tesla can establish a 3 year market based residual. Monthly lease payments need to be in the $799 range to significantly grow Model S sales.

Rather than extend it abroad, I think it may be time to end it in the USA. It creates a barrier to lowering prices or remodeling that may not be desirable in the future.

The RVG has a lot of risk for Tesla. Depending on how good the Model 3 is, the market value may not live up to the projection.

People considering a 3 year old Model S may think it makes more sense to buy new Model 3 for almost the same price.

I’m sure some other manufacturer will shout that this is illegal in some ‘price fixing’ way.
It certainly sounds wrong to me. How is the average guy in the street going to ever afford an expensive car if he can’t wait for the value to plummet down to his spending level?
It sounds very ‘un American’ to me, and I’m English!