As rumored earlier, Tesla Motors Inc (NASDAQ:TSLA) is selling used versions of its luxury sedan to customers through an online registration at Tesla’s website. According to the Wall Street Journal (WSJ), the certified pre-owned (CPO) sales program hit off just a week ago at Tesla’s website, which would provide the Palo Alto-based automaker to fill in the supply shortage.
The electric vehicle (EV) maker would make the used car re-sellable after checking for reliability and maintenance standards. In order to develop customer confidence into the program, the automaker would also provide a 50,000-mile or 4-year warranty on its second-hand cars, according to the WSJ.
The publication further reports that the customers can get used luxury cars at a lesser price than ones offered by private or independent dealers at AutoTrader.com. Currently, the scale of CPO sales program is limited to 11 areas in US, according to Tesla Website. Tesla Motors has not yet marketed for CPO program at any forum, as the automaker is known for delivering vehicles as per order, but that seems to have changed now.
The EV manufacturer also has its residual value guarantee (RVG) program, which allows Tesla owners an option to sell their vehicle to Tesla after 3 years at a 50% residual value. This RVG program would complement the automaker’s recent move to sell used cars; assisting to take back used vehicles directly from customers of the RVG program and make it available for CPO sales. Tesla vehicles are considered to have the highest residual value compared to rest of the EVs in the market, as the company claims its vehicles have better residual value than any other luxury brands such as, Audi, BMW or Mercedes.
As the automaker is growing from a niche-market car company to a large scale car-seller, certainly the company is changing its selling practices. Many analysts also think Tesla to adopt the traditional dealership business model for selling its cars once the automaker rolls out its mass market Model 3 in 2017. Currently, Tesla follows a direct sale model at several states in US.
Tesla Motors stock traded $226.03 at the closing bell on Friday. The stock did not see a major hike after Tesla Motors launched its first non-car stationary battery products on Thursday evening.