By on October 7, 2014


Always wanted to own a Tesla Model S, but couldn’t get past the $71,070 base price? CEO Elon Musk has a plan to make it easier to bring one home: CPO sales.

Automotive News reports the automaker is working on a certified pre-owned program that would be offered through its stores, competing against similar programs by the likes of BMW and Mercedes-Benz, as explained by Tesla’s vice president of communications, Simon Sproule:

With the Model S fleet now heading toward the first cars hitting three years old, we are looking at CPO and how best to structure.

In addition, Musk himself proclaimed in 2013 that he would personally honor the buyback guarantee his company issued to owners at the time of purchase, allowing them to recover 43 percent to 50 percent of the sticker price after three years. Should this group take him up, the first trade-ins would arrive for refurbishing in the spring of 2016 — if not earlier for those offloading their Model S for a Model X — with more to come the following year.

Just like with Tesla’s new cars, the CPO models would be sold at its stores, with the potential to capture as much as $10,000 per used model sold, much more than when the models first left the showroom according to TrueCar president John Krafcik.

Challenges for the company’s entry into the CPO market include: budgeting for model refurbishing and sales; more legal battles to be allowed to directly sell used models; the potential for depreciation to be lower than benchmarked — the Mercedes S-Class’ trade-in value formed the basis for Tesla’s buyback program; owners taking their vehicles to other used-car dealers or the private market; and the upcoming Model III.

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19 Comments on “Tesla Preparing To Enter CPO Market By 2016...”

  • avatar

    Hopefully part of the CPO reconditioning will be fixing the huge panel gaps all over the damn place.

    • 0 avatar

      Having seen quite a few up close, sadly in parking lots and not in my drive, I did not notice panel gaps worth mentioning. Part of designing an electric car is aerodynamics, more so than a standard economy car. Large panel gaps would defeat that purpose and the Tesla is a well designed car. I will take a closer look next time but I think you are off the mark here.

      • 0 avatar

        I’ve seen them up close in lots, and also for sale on Ebay where there are lots of pics. It’s not nearly as noticeable on dark colored ones, but in white or silver it’s very noticeable and obvious to me.

  • avatar

    “In addition, Musk himself proclaimed in 2013 that he would personally honor the buyback guarantee his company issued to owners at the time of purchase, allowing them to recover 43 percent to 50 percent of the sticker price after three years.”

    Guaranteed 50-57% depreciation after just 3 years, on a car that costs at least $70,000? Yeah, no thanks. Another website said “up to 3 years”, implying that the same depreciation % would apply to cars that aren’t quite 3 years old yet.

    • 0 avatar

      Just like every other high end sedan. Take to MB and BMW owners who buy the executive class sleds.

      • 0 avatar

        50-57% depreciation still seems high for an S-class or A8 over the same 3-year period. I would expect those cars to have similar depreciation over 5-7 years.

        • 0 avatar
          This Is Dawg

          “Musk himself proclaimed in 2013 that he would personally honor the buyback guarantee his company issued to owners at the time of purchase, allowing them to recover 43 percent to 50 percent of the sticker price after three years.”

          He’s establishing a minimum amount of money you’d get if you wanted to switch cars after 3 years. You can sell the Tesla to someone else if you can get more, but he’s just promising you won’t get less than that. I’m not sure “buyback gurantee price” is the exact measure of depreciation, as you’re taking it, but I haven’t looked.

  • avatar

    Should be interesting to see how the Tesla model translates into the used market. I’ve seen one or two or three run at various hi-line sales here in Florida (I don’t remember what they brought or if they sold, unfortunately).

    FWIW, Black Book has a section for ’12-’14 Teslas already with adds and deducts, though no figures are in any columns because there haven’t been enough transactions to warrant accurate measurements by their metrics. I will say its cool to see a new manufacturer in the ‘DOMESTIC’ section, something that hasn’t been added since, what, Saturn?

    A quick search brings up 9 ’13 Model S and 2 ’12MYs. ’13s are asking in the low to mid $70s (this is on OVE, so dealers can ask whatever they want – what you actually pay for it is just like when YOU buy a car from a dealer – negotiation); one Performance trim is asking $93,5 and another is asking $105k. Good luck to him.

    For the bleeding-edge do-it-yourselfer, there’s a nice white on white ’13 with 23k miles, a salvage title, airbag deployment, and major front-end damage for $34,950. I’ll buy it for you, but I will obviously need a non-refundable deposit. I have enough paperweights at the moment. ;)

    MMR (Manheim Market Report – which reports ACTUAL transaction prices of what cars sold for in auction lanes) shows a range of $66-70k for 2013 Model Ss; Performance cars bring in the $90s. I’d post a screenshot, but I guess I can’t to a reply.

    Don’t know if all that really adds anything, but I thought you might be interested in seeing how these cars really do on the used market when its dealing with someone’s actual money/floorplan…

    • 0 avatar

      Yes, you added something. Thanks for providing researched, pertinent data to the topic. I’m surprised at the high transaction prices at auction. Nice news for the owners.

  • avatar

    It will be interesting to watch this unfold. The car made a fool of it’s critics at every turn and it’s entrance into the used market will give a clearer message as to it’s long term sustainability. If the car does well with it’s 2nd and 3rd owners, people will be even more open to buying a new one. Much like the normal car market.

  • avatar
    SCE to AUX

    Well, a CPO Model S still has more range left in its battery than any other EV when new, not to mention the performance.

    CPO Leafs and other BEVs – if they exist – not so much.

    But if you’re buying the Model S just because of its range (unlikely, but it’s a factor), then there will be significant competition to CPO Model Ss in the form of the Model 3 and the mythical long-range EVs allegedly coming from GM and Nissan.

  • avatar
    Master Baiter

    The key question: how long is the battery warranty on a used Model S?

    • 0 avatar

      Yes, rated by months/years or miles or a combo of the two?

      If Musk is listening I recommend X months unlimited miles if you have real confidence in your product.

      • 0 avatar

        Tesla S:
        “The battery is guaranteed for eight years or 125,000 mi (201,000 km) for the base model with the 60 kW·h battery pack. The 85 kW·h battery pack is guaranteed for eight years and unlimited miles.[59]

        A separate battery replacement guarantee takes effect after the eighth year at a cost of US$10,000 for the 60 kW·h battery and US$12,000 for the 85 kW·h battery.

        Wikipedia Tesla S

  • avatar

    CPO programs at BMW, MB, etc. typically add 2 or more years and 20,000 or more miles to the new car warranty. Thus to match this Tesla would seemingly need to extend the battery warranty, but the question is whether there is any margin to profitably extend it beyond 8 years, particularly if the 1st owner has made frequent use of the supercharger networks which tend to reduce battery life.

    • 0 avatar
      SCE to AUX

      Actually, Supercharging does not reduce battery life. This perception has been disproven with real data lately.

      What hurts lithium ion batteries isn’t the speed with which they’re filled (within reason), but how much they are filled. For example, Nissan recommends filling a Leaf to only 80% on a daily basis, with 100% filling being the exception.

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