Tesla’s used car business is ‘as big as publicly traded used car retailers’
Tesla claims its used car business is “as big as some publicly traded used car retailers,” and it is expanding fast.
Many factors separate Tesla’s business from other automakers, and its direct-sale model is one of the biggest – and probably the one that other automakers are most jealous of.
Tesla operates all of its stores, service, and delivery centers. It doesn’t use the third-party franchise dealership model.
This has a tremendous and obvious impact on its distribution and service organization, but it also has a lesser-known impact on how it manages used cars.
Operating its own dealership gives the automaker strong control over its used vehicles as owners upgrade or vehicles come off leases.
Tesla’s used car business is now so big that Jimmy Douglas, director of sales and delivery operations at Tesla, claims it is “as big as some publicly traded used car retailers”:
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.
The executive is likely comparing it to companies like Carvana and AutoNation, which are worth between $4 and $6 billion.
It is impossible to confirm if Tesla’s secondary car business is worth that from public filings since the automaker files the business under “service and other” in its revenue report.
However, that line item is going up fast. It’s up more than 50% over the last year to $1.4 billion in revenue last quarter.
Tesla’s used car business would have an annual run rate of over $1 billion if it’s about 20% of that line item.
Douglas made a comment promoting a new job listing posted by Alex Liebl, manager of Tesla’s Used Car Quality, as the team is expanding.
The executive added about Tesla’s used car team:
They are distributed across North America, ensuring every used Tesla meets our quality standards, so we can delight every customer at the point of delivery. Since Tesla doesn’t advertise, delighted used car customers are our version of Super Bowl commercials.
While Tesla doesn’t advertise its used cars, it has the advantage of having great control over the inventory.
We previously reported that Tesla changed its policy to now prevent anyone from buying their car after their lease is over. This is increasing the automaker’s supply of used vehicles to resell.
At first, Tesla said that the move would be to build a fleet of self-driving cars. While that never happened, the move proved super successful because Tesla now has a lot of vehicles coming off leases, and used car prices are hitting all-time highs.
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Tesla just released the Model 3 Performance on Tuesday, and already Tesla has hiked the price by $1,000.
The Model 3 Performance came out the morning of Tesla’s quarterly earnings report earlier this week, with lots of updates.
Tesla updated the car’s bodywork, seats, steering, brakes, damping, track mode software, and of course the rear drive unit, giving the car 510hp and a 0-60 time of 2.9 seconds.
And, given the fact that it qualifies for the US Federal EV Tax credit, it’s actually cheaper than the lower-spec Long Range Model 3 (which starts at $47,740) after taking the credit into account.
The Model 3 Performance has also garnered rave reviews both from online observers who note its impressive specs and value proposition compared to competing vehicles, and from the few car reviewers who Tesla deigned to allow to review the vehicle ahead of its release.
Perhaps due to the confluence of these factors, Tesla has now decided that its raved-about vehicle might be worth more than it originally decided to sell it for, and has thus raised the price by $1,000.
Now, the Model 3 Performance starts at $53,990, rather than $52,990.
This still makes the performance model ~$1k cheaper to purchase than the Long Range version, assuming you qualify for the tax credit. However, since the tax credit is attainable even on non-qualifying cars via a lease, the lease rates for the RWD ($299/mo) and Long Range AWD ($439/mo) are still significantly cheaper than the Performance AWD model ($566/mo).
Perhaps to balance this price increase, Tesla also reduced the price of some paint and interior options. Now, the solid black exterior paint color is $1,000, down from $1,500, and the black and white interior now costs $1k, rather than $1,500. Other paint options remain the same price as before.
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Environment
Hyundai’s new Kona Electric is even cheaper to lease than the gas-powered model at $169/mo
The newly designed Hyundai Kona Electric is better in every way, with more range, faster charging, and a bold new style. Hyundai’s new 2024 Kona Electric is even cheaper to lease than the gas-powered model, starting at $169 per month.
Hyundai Kona Electric cheaper to lease than gas model
Hyundai revealed the 2024 Kona Electric at the NY Auto Show last April with a sleek new “EV-derived” design.
You can instantly see the upgrades with a modern style closer to its IONIQ 5 and 6 dedicated EVs. The inside is nearly 6″ longer, with an additional 3″ legroom in the second row. A flat floor design creates more head and shoulder space than the previous model.
Hyundai included its next-gen dual 12.3″ infotainment system with a faster, more intelligent user face. It also comes with Android Auto and Apple CarPlay as standard.
The 2024 Kona EV features a slightly bigger battery with faster charging and up to 261 miles range. Starting under $33,000, the 2024 Kona Electric is already one of the most affordable EVs in the US.
2024 Kona EV prices
It’s available in three trims: SE, SEL, and Limited. The base SE model includes a 48.6 kWh battery for up to 200 miles range. The SEL and Limited feature a 64.8 kWh battery, good for up to 261 miles range.
2024 Hyundai Kona electric trim |
Starting Price (not including a $1,335 delivery fee) |
| SE | $32,675 |
| SEL | $36,675 |
| Limited | $41,045 |
With an up to $7,500 featured cash offer, you can lease the 2024 Hyundai Kona Electric SE for as low as $169 per month.
The deal is for 24 months, with $1,999 due at signing. It also includes the $7,500 EV Lease Bonus for a net capitalized cost of $25,370.
If you’re looking for the higher-range SEL trim, it can be leased for as little as $199 per month. That’s also for 24 months, with $1,579 due at signing. With the EV credit, the net capitalized cost is $29,419.
However, you may have to act fast. Hyundai’s website shows the deal ends in five days on April 30, 2024.
Are you ready to drive off in your new Hyundai Kona Electric at some of the lowest prices yet? We can help you get started. You can use our link to find deals on the 2024 Hyundai Kona Electric near you today.
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On the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss all the news coming out of Tesla’s earnings, Model 3 Performance, Mercedes-Benz electric G-Class, and more.
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