Everyone wants used Tesla

18 September 2018

EMMANUEL VANBRUSSEL | September 18, 2018 14:00
Link to article The Times

Demand for used Tesla cars is rising sharply. Because the supply is so small, prospective buyers should count on a purchase price of at least 50,000 euros.

Tesla cars appear to fetch surprisingly high prices on the still young used market – the electric brand was launched in Belgium about five years ago. Prices on the car website Autoscout24 fluctuate between 50,000 and 100,000 euros, which is considerably more than German premium cars like BMW, Mercedes or Audi with a similar number of kilometers on the odometer.

Demand for used Tesla cars is currently on a steep rise as European customers still have to wait months
for months to come for Tesla’s ‘affordable’ Model 3, which may cost less than 40,000 euros. ‘A lot of reservation holders for the Model 3 can’t wait and are now choosing to buy a used Model S,’ Nikola and Provanmotors.be say. Nikola sells about three used Tesla’s a week. Multi-brand dealer Provanmotors.be sells about 12 Tesla’s a year.
A second reason for the large appetite in the used market is that Tesla is systematically making its current entry-level model more expensive.

A new Model S costs at least 88,700 euros, which is still a bridge too far for some aficionados. It is suspected that the American automaker is pushing that base price higher in order to later market Model 3 as a budget variant.

The price of the cheapest Tesla Model S has risen sharply in a few years.
©MEDIAFIN

On the supply side in the used market, early Tesla believers, including many corporate executives, have quietly written off their cars for accounting purposes. Some also don’t wait five years to resell their Tesla. ‘We even know someone who has five Tesla’s in his garage, changes one every year and thinks 10,000 kilometers on the odometer is already a lot,’ says Johnathan Wong of Nikola. ‘Nine out of ten Tesla owners who sell their car do so to buy a new Tesla.’

The supply is small. On Autoscout24 there are only 58 Tesla’s for sale in all of Belgium. Also on the German Mobile.de there are only 217. In addition, Tesla is doing its best to keep the cars within its own network (the “pre owned” program), but even there the supply is limited. By comparison, Tesla sold 509 new cars in Belgium in the first half of the year.

Cowboys

In the second-hand market, however, one has to watch out for fraudsters. ‘There are cowboys on the market who import Tesla cars from the US, where they are cheaper, and offer them here on the used market. But those cars are not homologated and have a different power contact,’ Wong warns.

The burgeoning trade in used Tesla cars has some peculiarities. ‘Oddly, demand fluctuates with the stock price. If Tesla stock goes down, interest decreases. And if there is something going on with Musk, we notice it too,’ says Wong, who calls himself ‘Elon minded.’

‘Tesla buyers love options, like autopilot. The more gadgets, the better,’ says Proot.’Half of the buyers come from abroad. One of the Tesla’s we sold we helped ship to the United Arab Emirates, where petroleum is just about free.’

Door handles

Not everyone is convinced of the durability of a Tesla. All sorts of defects are busily discussed on autoblogs. Replacing Tesla’s iPad-like control screen can cost thousands of dollars without a warranty.

‘A Tesla has no more blemishes than, say, a BMW,’ says Wong. ‘It’s just that first-time buyers, who often come from the IT world, are squeamish. The passion with which they discuss on blogs, you don’t see at many other brands.’

Discussions about parts lead to a parallel world of repair services, in addition to Tesla’s own. Nikola, as an independent company, is also jumping on that bandwagon. ‘Door handles break easily,’ says Wong. ‘While Tesla replaces those completely, we only replace the mechanical part, which is up to four times cheaper.’

Top executive Elon Musk announced Sunday on Twitter that he was going to pay greater attention to repairs and parts supply.

Are the high used prices for Tesla a keeper? That depends on the competition, according to Proot.

‘Tesla currently has the realm to itself in the all-electric premium car segment. But German premium brands are emerging with electric models of their own, such as the newly launched Audi e-tron. In a few years it will have to be seen whether Tesla’s high used prices are sustainable. In any case, Musk has secured a nice starting position.’