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Used Teslas a multibillion business without resorting to 'waving tube men'

The second-hand business is booming (image: Tesla)
The second-hand business is booming (image: Tesla)
Tesla's sales and delivery chief claims that its second-hand EV business is 'as big as some publicly traded used car retailers you’ve definitely heard of' and theirs are multibillion enterprises. That's 'despite no Super Bowl commercials or wacky waving inflatable arm flailing tube men,' he added.

Tesla runs a new car business whose US$10,000 average profit per car is the envy of industry stalwarts like Ford, but its direct sales model is no less of an inspiration. It has the advantage to have honed its supply chain, production equipment, and vehicle design efficiency before anyone else, achieving unprecedented economies of scale. It has hedged its battery raw materials supply for expensive metals like nickel and plans to build a lithium refinery on the Gulf Coast as a "license to print money."

Without much fanfare, though, Tesla's used car business turned out to also be a multibillion affair, brags its director of sales and delivery operations Jimmy Douglas:

Most people don’t realize that Tesla runs its own vertically-integrated, nationwide online used car retailer. It’s as big as some publicly traded used car retailers you’ve definitely heard of, despite no Super Bowl commercials or wacky waving inflatable arm flailing tube men.

Tesla runs its own car sales and distribution network and doesn't rely on the classic dealership model, much to the chagrin of legacy franchise dealers who are trying to prevent the direct sales model encroachment in their respective states. This is still a rather controversial topic and Tesla has teamed up with rivals like Rivian and Lucid to try and pass favorable legislation.

Former Tesla lobbyist Jim Chen is now working the Capitol Hill for Rivian and trying to earn the same exemptions they got for Tesla earlier in the game. The dealerships' political power is not to be underestimated, though, and that is why the EV rivals are banding up and working state by state. Lawmakers are also worried that if Tesla and Rivian get a pass, Big Auto will follow, too, according to Sen. Steve Conway:

It worries me that this kind of exception will lead down a road where Ford…will be coming before us next year asking for the right to sell Fords directly to us and get rid of dealerships altogether.

Tesla's second-hand car business is extremely lucrative, as it doesn't allow lessees to buy the vehicle at the end of the lease. Back when it started the practice, Tesla told Model 3 owners that it is because they will be creating a fleet of self-driving vehicles.

While Tesla's ride-hailing network is still vaporware, Tesla just changed the purchase prohibition rules this year to apply to all of its model. Thus, instead of a fleet of autonomous vehicles, Tesla has built a second-hand empire in which used vehicles now often sell for prices higher than when they were new as demand for its cars continues to outstrip supply.  

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> Notebook / Laptop Reviews and News > News > News Archive > Newsarchive 2022 09 > Used Teslas a multibillion business without resorting to 'waving tube men'
Daniel Zlatev, 2022-09-27 (Update: 2022-09-27)