Tesla Launches Online Used Vehicle Sales

Tesla motors sells directly to consumers. The entire vehicle purchasing process is done online. Consumers pick the vehicle that they want, arrange financing and the vehicle is ordered. However, that was for new cars. Tesla launched the Model S in 2012 and that boomerang it appears, is coming back. Tesla has ever so quietly launched an online certified used vehicle store on their website.

There are currently 166-used Tesla’s in the CPO program, nationwide. This means that consumers may be able to get behind the wheel of a Model S for less than $70k. This new Tesla initiative is a CPO program with a 4-year 50,000-mile warranty.

Only Tesla knows exactly how much it costs to make a Model S. Thus when they set the price point up near $100,000, no one bats an eye. Plus, there is the EV tax credit that can drop the cost of a Tesla by as much as $7,500. However, that’s new vehicle only, not pre-owned. The question is, how long will the used value of a Tesla Model S hang around over $50,000?

It might not be very far off. A used Model S P85 is currently listed as for sale in Washington D.C on the Tesla Motors website for $62,900. That’s the cash price, which for a new P85 is $105,000. How low could the used Tesla price dip in 5 years? Would it be low enough to entice consumers looking for a $30-40k luxury sedan? Could they be willing to buy a used Tesla for $40k over a new traditional automaker sedan of the same price?

Tesla has created a lot of fanfare with the construction of their Gigafactory in Nevada. The goal of the facility will be to lower the cost of lithium-ion batteries for Tesla’s vehicle and home power products. However, for their autos, the plant was supposed to allow them to create a model III, which would have a 200-mile range and cost $35,000 before government subsidies. However, at the current pace (factory isn’t even built yet) by the time that Tesla rolls a Model III off of the assembly line, used model S sedans could conceivably be going for roughly the same price. This means that the fastest way for Tesla to bring the electric car to the masses could be to sell a used and depreciated Model S.

Tesla is in the online used car business. Do you think that the Tesla CPO program will generate enough interest to become a viable option for luxury sedan shoppers? Finally, do you think that Tesla Motors will ultimately run into delays and fall behind other automakers, or will they be the first to bring the electric car to the masses?