Tesla Quite Actively Pursuing Model S Owners For Trade-Ins (Rumor)
Originally published on EV Obsession.
I’m not particularly familiar with Tesla’s policies towards the trading in of old vehicles for credit towards new purchases, but a recent comment on the GM-Volt.com discussion forum on the matter did catch my attention. And it makes me wonder, has Tesla recently changed its policies on the matter?
The comment below, from “Dodman” on the GM-Volt.com forum, explains:
“Not Volt related but interesting story about Tesla’s sales efforts. My son has a 2 year old Model S with about 22,000 miles. Been a great car and no issues but he always lamented the release of the AWD model not long after he took delivery of his RWD car. He was on the Tesla website a few weeks ago playing around with the build your own function just for kicks and giggles with no intention of trading his car. The next day he received a call from Tesla which was prompted by his visit to their website. He told the caller he was just fooling around but one thing led to another and now he is the owner of a new AWD Model S. Basically they took his car as a trade and kept his payment to about the same as it was on the older model. He will also get our state EV rebate and Federal tax credit…. win/win for him. He is thrilled with the extra range and quickness of the new car, and he especially loves the Adaptive Cruise. He said it works great as does the self parking feature. He has tried the Auto Drive and says it works well also but he only uses it on late night returns from his job when the highway is relatively clear. I’ve been on the Chevy website playing with the build your own function but funny thing… no calls from Chevy or my dealer. Kudos to Tesla!”
Doesn’t sound like a bad deal. All the features that accompany the refresh for the same monthly payment amount — who would say no to that? Has anyone else had this experience as well? Or was this more of a fluke occurrence? It’s the first we’ve heard of this type of activity from Tesla.
The question that’s raised as well, of course, is why Tesla is selling in this way now. Is it another test to see if it is more efficient than other sales processes? Is Tesla feverishly working to make its sales targets? Is Tesla making a strong profit on trade-ins like this? Is it looking to get old models out of the wild in order to add all of the upgrades the company has figured out in the past few years?
Of course, this is also just one story. There’s the possibility of misunderstanding and simple timing coincidence here.
Photo by Kyle Field | CleanTechnica
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I’m sure it’s the same monthly payment amount but extends out another year of payments or so.
To me, it’s just good customer service, just as Tesla has always tried to be.
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They are kind of low on CPO cars, I count only 10 preowned in the entire country and all being 60s.
They don’t list those any more. http://cleantechnica.com/2016/05/06/day-tesla-cpo-music-died/
You have to contact someone at Tesla to look for a CPO.
If this is true, it means that Tesla being supply constrained isn’t as true as they want you to believe. You don’t spend money hitting up your former clients for sales when you can’t build enough cars to supply demand.
That isn’t exactly true. Sometimes it is easier for them to send a car locally in the US rather than shipping it abroad. Especially if it is at the end of a quarter and they want to get numbers in.
But overall based on latest news they are at 2000 cars per week, and considering the constraints of Model X production, so Model S might have more capacity than normal.
It’ll always be easier to sell locally. Are you suggesting that domestic demand is caped, or almost capped? Why couldn’t they have sold that car to someone who isn’t already in a Model S?
Hard to say, the Tesla Model S is already the top selling car in its class (gas or electric) in the US. Add the increase production, some cannibalization from the Model X (and/or upcoming Model 3) and its possible that in the US the Model S is near cap.
Of course other possibilities exists like he lives in California and they could get it to him quickly. Or they happen to see what he was configuring, and had a recent car that was canceled with same exact configuration. So instead of making it an inventory car they could have just pitched it to him.
Lining up surplus / cancelled cars with prospective buys would be a really neat trick.
Yes, I don’t think it’s unlikely that Tesla needs to stimulate demand now. Last I heard that Tesla was supply constrained on the Model S was about a year ago, and Elon noted then that they may need to start stimulating demand by the end of the year.
I think it’s safe to say that Tesla’s increased production capacity and the limits of the high-end sedan market leave it finally needing to stimulate demand.
Every car company needs to stimulate demand. It’s what they do with it that matters. If they attract a lot of people to what they cannot build or to low margin products, they will not be successful.
Indeed … for the most part. Tesla hasn’t really had to do much on the demand side for years due to over-demand relative to production capacity. But it is finally turning into a real company. 😉 😀
CPO is a way to make money that all car dealers do. I was getting postcards about trading in my Toyota 2 years after I bought it. It’s just one more transaction where they can make a couple bucks. If it gets someone into a car they are interested in upgrading to (seeing what he was playing with online) and makes them some small amount of money based on another transaction, what’s the harm. To me, sounds like there’s demand for the Model S, and there’s secondary demand for used Model S for people that want to spend 10-20k less and get the 2 year old car. In the end, just another way of pushing down on the selling price to see more people bite.
Yet, I doubt that any dealer will see your online actions on the OEM configuration site, and offer you a corresponding product.
At this point, I doubt Tesla has done much of this either.
It costs far less than a conquest sale, it increases the velocity of sales to selling expense growth and is cheaper/faster and therefore raises margins, to deliver newer cars to existing US customers. And it unlocks a CPO sale opportunity – the question is why not, and why so late?
Maybe they had a buyer with limited funds lined up,boom,here’s a cheap option,boom, here’s an upgrade,2 deals completed,everyone’s happy.
Same thing happened to me – back in mid December Tesla called me, made me an offer I couldn’t refuse to take back my old RWD S60 with about 9K miles in exchange for a new AWD S70D for about the same monthly cost. Which was great, because I was really bummed that I’d bought my original car a few months ahead of the AutoSteer sensors being introduced. The rep told me they had high demand for used Model S cars on the resale market. But he also said the deal had to be executed by year-end 2015, so I suspect there was a desire to boost their new car sales numbers for the year a bit as well.
interesting. and had you been playing around on the site in a way that they could have noticed, and then targeted you?
In principle, it’s a very smart thing to do. Existing customers are always going to be your easiest and cheapest sale.
What bothers me is the potential “Big Brother” effect of monitoring the activity of customers on the website. Could just be a coincidence, but if not, it’s a bit disturbing.