Tesla’s used car business is rapidly expanding, on rhythm to triple used sales
Tesla’s used car business is rapidly expanding, on tempo to triple used sales
Used cars have a healthy share of most automakers’ cash flow, and Tesla is looking to get into that game.
As of the Q2 filing, Tesla has $1,470,359,000 in “finished goods” inventory on their books. They don’t break this section down, but it includes “vehicles in transit to fulfill customer orders, fresh vehicles available for instantaneous sale at our retail and service center locations, pre-owned Tesla vehicles and energy storage products.”
Tesla had an increase of $154.1M in used car sales this year thus far.
In two thousand sixteen as a entire, the company spotted an increase of $117.4M. At the rate it is going at now, the company is lightly on tempo to triple used inventory sales.
The company attributes the used sales bump to an increase in pre-owned vehicle sales as an organic result of enlargened automotive sales as well as from expansion of our trade-in program.
Tesla is also making moves in the used car space by listing its used inventory on Cars.com. While owners have been listing their Teslas on the website for some time, Tesla itself is now listing its inventory.
“In future periods, we do not anticipate meaningful revenue from sales of powertrain or other vehicle systems and components to third parties. However, we anticipate that revenue from sales of pre-owned vehicles will proceed to increase as the volume of pre-owned vehicle sales increases and that revenue from services by Grohmann will decrease as we primarily consume internally its services,” the company said in its Q2 filing.
The Elon Musk-run company has been involved in some legal back-and-forth with a few states who ban Tesla’s direct-to-consumer model. The most notable of these legal battles is the one taking place in Michigan.
Michigan has an Anti-Tesla Law, which states that fresh auto sales can only be conducted by franchised auto dealerships. Tesla claims this law discriminates against out-of-state interests and is an unconstitutional infringement on their preferred business model.
Tesla is presently finding ways around the law — consumers can order their Teslas online but they have to pick them up in neighboring states like Ohio or Illinois.
The sales on Cars.com are also a way around the Anti-Tesla law since it only impacts “new auto sales.”
The used car sales is just another way that Tesla is attempting to bring fresh Tesla owners into the fold. The company previously announced an expansion of its service fleet in an effort to make the vehicle more user-friendly and convenient. The EV titan will also add one hundred fresh Tesla Service Centers and 1,400 fresh service technicians, the addition of one hundred facilities will bring the total number up to just over two hundred fifty service centers worldwide.
Tesla’s continued foray into the used sales space is a clear indicator that the company is looking to utilize that part of the business to bolster its bottom line and bring fresh owners into the world of Tesla.
Tesla’s used car business is rapidly expanding, on rhythm to triple used sales
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