Market rolled up from behind: Tesla with a new approach to the used car trade

shares in this article

• Tesla with direct sales model
• Leased vehicles are returned to Tesla
• Successful business with used vehicles

The vehicle market is currently a difficult one. Many car buyers have to put up with long waiting times when purchasing a new vehicle, and it can sometimes be months before the desired vehicle actually arrives at the customer, especially when it comes to electric vehicles, which are currently in high demand. That has shifted some of the demand to the aftermarket for vehicles. The price of used cars has risen significantly in some cases, and here too the demand is greater than the current supply.

Tesla as one of the big players in the used car market?

Tesla vehicle models are also in high demand on the used car market. But Tesla is going its own way here. Since 2019, drivers who have leased Tesla’s Model 3 for three years can no longer purchase the vehicle after the lease period has expired. In spring 2022, Tesla extended this rule to all other models. Tesla originally wanted to integrate the vehicles into its robo-taxi fleet in this way, but this model has now proven to be a very lucrative business for the electric car manufacturer. Because the vehicles that come back to Tesla after three years can be resold, sometimes at enormous profits – thanks to Tesla’s direct sales model, instead of through middlemen or other car dealerships.

Tesla more successful than listed industry giants

Tesla’s Sales Director Jimmy Douglas recently explained how successful this business model is. Most people are not even aware that the company operates its own vertically integrated and nationwide used car trade, electrek quotes the manager as saying. Tesla’s used car business is now “as big as that of some listed used car dealers”.

Douglas did not name specific names in this context, but according to electrek he may have referred to Carvana or AutoNation, which are worth four and six billion US dollars on the stock exchange.

Alex Liebl, head of Tesla’s Used Car Quality, recently posted a job offer on LinkedIn in which he described the used car division as the “fastest-growing” company.

How much share the used car segment actually has in Tesla’s automobile business cannot be verified with certainty. The division is not shown individually in the balance sheet, but is hidden under “Services and Other”.

Editorial office finanzen.net

Image Credits: Scott Olson/Getty Images, Sergio Monti Photography / Shutterstock.com