Tesla On Pace To Triple Used Car Sales

2 months ago by Steven Loveday 20

Tesla

First-generation Tesla Model S sedans

Traditional automakers fare well in the used car market and Tesla is starting to gain significant ground.

As we previously reported, not long before the Model 3 entered initial production, the discount pricing on used Model S’ sedans was shocking. Now, it’s commonplace to see many 2013 and 2014 models in the $40K range, and most of these are low mile vehicles.

According to Teslarati, the Silicon Valley automaker has already seen an increase of $151.1 million in used car sales thus far this year. While still healthy for a small-scale automaker, numbers for all of 2016 pale in comparison to the recent surge. Tesla reported $117.4 million in used car sales last year. This exponential growth forecasts a positive future for the electric carmaker.

Tesla

A sample of used Tesla Model S’ pricing (Image Credit: TRUECar)

The increase is due in part to the obvious fact that there are increasing numbers of used Tesla vehicles available. Soon enough, we will start to see more Model X SUVs in the used market. Significant discounts have surely helped the situation, along with the company’s latest trade-in program push. Tesla has even gone so far as to list its vehicles on sites like Cars.com. The automaker reported during its Q2 earnings call:

“In future periods, we do not anticipate meaningful revenue from sales of powertrain or other vehicle systems and components to third parties. However, we anticipate that revenue from sales of pre-owned vehicles will continue to increase as the volume of pre-owned vehicle sales increases and that revenue from services by Grohmann will decrease as we primarily consume internally its services.”

Selling the used cars online through independent websites is a way for Tesla to work around some states’ laws against the company’s direct sales model. Tesla’s new vehicles are ordered online, and those that live in a state that doesn’t allow direct sales can order online and pick up their vehicles in a neighboring state.

With the massive interest in the just-released Model 3, more people are becoming aware of Tesla. Rather than waiting years for a Model 3, some consumers are splurging for a Model S or X in the meantime. The automaker has actually been pushing this option heavily for some time. Still others who can’t afford to do so can purchase a used vehicle for about the same price as a new Model 3. Additionally, the used vehicles come with free, unlimited lifetime Supercharger access and the S and X are better-equipped than the Model 3.

Potentially, these new Tesla customers will eventually buy a Model 3 or even a Model Y in the future. The Palo Alto automaker is doing everything it can to bring new customers on board, as they will likely be lifelong Tesla supporters.

Source: Teslarati

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20 responses to "Tesla On Pace To Triple Used Car Sales"

  1. ModernMarvelFan says:

    I see few of them (used Model S) at my work places. They are all bought in the $40K to $50K price range. So, it looks like there is a lot of demand in that price range.

    Use Model S fills that need nicely.

    1. Tom says:

      The residual values seem to be holding up just fine compared to other luxury cars. I have seen the same be true for the BMW i3 (especially if doing post fed rebate math on residual). This is very good news for EV manufacturers as well as customers. The only EV that seems to shed its value like an overheated alpaca sheds its coat, is the Nissan Leaf. And it’s hard to retain value when they are giving away new ones. You can pick one up brand new now in certain cases for $10,000….and they can STILL only sell fewer than 2000 per month. They can’t give them away.

      1. Mister G says:

        The leaf battery sucks, I lost 3 bars on my 2016 Leaf SV at 22k miles.

        1. ModernMarvelFan says:

          At that pace, you should get a new battery pack soon with Nissan Warranty.

          What do you do with it? Give it a hot sauna daily?

  2. jim stack says:

    the used ones also have Lifetime FREE Super Charging too. That’s a great feature to have on a trip.

    1. georgeS says:

      You also get a warranty with CPO Teslas. Older used tesla have a battery and drive unit warranty but the warranty on the rest of the car has usually run out. So that’s a big plus to have the basic car warranty.

      You will pay a little more for a CPO than a non used CPO but it’s probably worth it because of the warranty.

      You also have to pay sales tax.

      I bot my MS from an individual so I don’t have the basic car warranty. However I did NOT have to pay sales tax. States vary on this. AZ doesn’t require me to pay sales tax if I bot from a private party.

  3. CDAVIS says:

    Would be interesting to know what average margin Tesla makes on the sale of each used car compared to new car sales.

  4. Kosh says:

    I’m guessing that Tesla fall into the same category as ICE luxury cars, where people that want them can usually afford to pay full price new, so it drives down the resale value on the used ones.

  5. (⌐■_■) Trollnonymous says:

    I though about buying a used S but then again, I really don’t want to drive a boat around town to customer locations.

    The 3 will more than suffice when I’m ready.

    1. SparkEV says:

      S is huge, but 3 is only 4 inches shorter than my Astro van! 3 is still enormous, 21 inches longer than Bolt.

  6. ffbj says:

    Of course anything in the salvage market in regards to the drive train you can get for a pittance.

  7. pwood1 says:

    c’mon in, the water’s warm.

  8. Gazz says:

    In the UK they have just hit £40,000 which is more expensive then Used MS in America. The price has hardly moved in a year 🙁

    1. John Norris says:

      $52k USD

  9. Bsweet says:

    Proble just me but I have went to tesla site and there are no used modes s or X there

    1. Rich says:

      A full page of S & X return for me. 38 on the page.

  10. Jim Whitehead says:

    The demand for Model 3s is so intense that by Dec. 2017, some people will likely flip their new Model 3s at zero miles for 10% over list price and pocket the tax credits to boot.

    BTW, I think its crazy to pay over list for anything, but some people like my brother have to have the newest cell phone on release or a new car every year just to show off. (Ayn Rand calls these empty people “second-handers”. Like some actors, they only feel good about themselves when others praise them. Its sad but fixable, I hope).

  11. przemo_li says:

    Does Tesla have equivalent of CPO here in EU?

    Are there good sites that track noon dealership used cars?
    (Because those are kinda expensive and quite fresh actually…)

    1. Gazz says:

      The UK has it so try your national Tesla website.

    2. mike w says:

      Try here:
      https://www.tesla.com/en_GB/used?redirect=no

      click the country flag at the bottom of the screen and select the country you are interested in.

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