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Tesla Model S reservation resale

Tesla Model S reservation resale

Hello,

I reservered my Tesla Model S (general production version) in June 2010. Due to changed family circumstances I'm currently considering to pass on this reservation to Tesla enthusiasts looking to get their hands on their Tesla earlier than expected.

Would anyone be interested?

ggr | 23. April 2012

It sounds to me like you just want to make more money off it. If you just ask for your money back, several thousand people will get their cars a teensy bit earlier. But I think your reservation says it's not transferrable anyway.

BYT | 23. April 2012

Unfortunately ggr is correct, the reservations are not transferable at all.

Jason S | 23. April 2012

On other hand, could just buy the car and resell it.

foto | 23. April 2012

Just out of curiosity, what's your reservation number?

BYT | 23. April 2012

Hehe, I was thinking the same question. I wouldn't want a P reservation, I am interested in the Sigs at this point since I added myself to the list too late.

Jason S | 23. April 2012

I'm guessing right around 1500, given the reservation time frame of June 2010.

BYT | 23. April 2012

I think I made my reservation earlier then that and I'm P1,837

Then again, maybe it just seems like I reserved it earlier then that? Man I have been waiting a long time for my Model S... ;)

David70 | 23. April 2012

I made mine in Feb. 2010 and I'm P1649. But again, you can't sell your position.

BruceR | 23. April 2012

April 2010 = P1842.....

I....can't.....take.......the.......waiting........

Volker.Berlin | 24. April 2012

Linking a similar thread here, maybe it's interesting to read:
http://www.teslamotors.com/forum/forums/anybody-interested-purchasing-my...

I've posted my opinion there, so no need to repeat it here.

Pärtel | 27. April 2012

Hi,

Sorry for the late reply. There is no RSS on this (I think) so I was not able to monitor the responses.

Unfortunately it seems that I forgot to add that I purchased the reservation in Europe. If anyone is interested the reservation number is P282.

Secondly the reservation agreement does not specify anywhere that it is non-transferable.

And finally, yes, of course I would like to get more than 99% of what I put in. Tesla has been able to 'earn' a return on this 'deposit' certainly higher than 20% p.a. so before I cash in on 99% it is reasonable for me to see if there is any demand out there for the earlier slot.

Anyhow in case anyone is interested then please email me on partel@isepankur.ee

MandL | 27. April 2012

Wow. Tesla is making > 20% per annum on deposits? Is Bernie Madoff the treasurer?

olanmills | 27. April 2012

Yeah are you serious Partel? I wonder if you really have a reservation or are just a fraudster. How can you think that they made 20%? In fact, unless they made some special deal with their credit processor, haven't they lost money on credit card processing fees?

Tesla has to keep the reservation money in a relatively liquid and safe form, which means low return, if any. I think They even mentioned it during their last investor call or report. THey have to be able to refund the money immediately if a customer cancels.

And that's what they're going to do for you. You're not allowed to sell your spot, your only option is to cancel. The reservation is in your name. Tesla will only sell and deliver the car to you. Your only option is to either buy the car and resell it (you may be able to turn a profit this way actually) or negotiate this privately.

brianman | 28. April 2012

"I purchased the reservation in Europe"
"Secondly the reservation agreement does not specify anywhere that it is non-transferable."

I doubt the European version differs from the U.S. Reservation Agreement in this fashion. Though theoretically it might.

Here's the U.S. language...

6. Deferral and Non-Transferability

If you do not wish to enter into a Purchase Agreement at the time that you are contacted by Tesla, you have the option to relinquish your reservation sequence position and defer to a later position to be determined by us (only one deferral is permitted). If you do not communicate your decision to us within ten (10) days of notification under paragraph 4, you will automatically be granted such a deferral. This Agreement is not transferable or assignable to another party without the prior written approval of a Tesla authorized representative.

Pärtel | 28. April 2012

Anyone familiar with financing startups is probably aware that getting capital with a cost of under 20% p.a. is quite impossible. None of the investors put on money hoping to get 8% p.a. as the risk is just too high when investing in tech startups. Therefore getting cash with effectively a negative interest rate from the customers saves them the cost of financing. The (EU version) of the agreement even stipulates the following: "Use of Funds. The Model S reservation fees will be used to fund the growth of the company and its infrastructure required for the successful launch of the Model S. You acknowledge that your reservation fee may be lost, in part
or in whole, if Tesla ceases to be viable as a company. If Tesla remains viable, but the Model S program is cancelled, you will receive a full refund."

The US agreement seems to be quite different from the one used in EU which is only one page long and has no mention of any of what you quoted. The only sections in the agreement are: Reservation Step 1, Reservation Step 2, Priority, Estimated Purhcase Price, Cancellation, Limitation of Liability and Use of Funds which I quoted above.

Anyhow if anyone is interested then my email is partel@isepankur.ee. I can provide you all the documents I've received from Tesla as well as payment slips.

Brian H | 28. April 2012

brianman;
The US agreement doesn't forbid transfers, it just requires TM's approval:
"This Agreement is not transferable or assignable to another party without the prior written approval of a Tesla authorized representative." Question is whether they would withhold approval, and if so, why?

I can see a hypothetical concern about a wild secondary market in traded reservations developing, but that's rather a remote danger, I think.

Brian H | 28. April 2012

As far as the EU agreement, it may be that laws there forbid restriction of transferability of any asset you've paid for. I don't know.

GoTeslaChicago | 28. April 2012

I'm wondering if anyone has actually approached Tesla to ask if they would consider giving written permission to transfer a reservation?

stephen.kamichik | 28. April 2012

They might transfer a reservation to a relative, but not to a stranger.

Tiebreaker | 28. April 2012

Let the marketplace decide. If there is a dude that wants to pay 20% premium for a lower reservation number (and it is possible to transfer), more power to both dudes. And another proof that Tesla is selling a hot product, worth scalping.

Pärtel | 28. April 2012

By the way I found that the EU reservation agreement is still online so you can see the exact wording here http://webarchive.teslamotors.com/display_data/RA_ModelS_EU.pdf

Generally it would be against the law in EU to restrict such sales. Car manufacturers cannot even restrict non-official distributors selling their cars in EU (e.g. ones that are exported through Asia or South America) due to anti-trust laws.

I will contact Tesla on Monday to ask how should the transfer process look like.

Volker.Berlin | 29. April 2012

Thank you, Pärtel, and make sure you post the answers here! Or maybe you want to continue the thread over in the "Europe" section as to not annoy the US reservation holders that are stuck with an overly restricted market... ;-)
http://www.teslamotors.com/forums/clubs/europe

Volker.Berlin | 29. April 2012

Ah, and +1 Tiebreaker. That's exactly how it should work IMO.

Brian H | 29. April 2012

The Model S Reservation OTC Exchange? Could be fun!

olanmills | 30. April 2012

Of course I understood that reserving a Model S put your money at risk should Tesla slide towards insolvency, but at the same time I am assuming that, unless they are hiding it, they are not operating at the edge of complete failure, and are therefore keeping a good chunk of reservation payments for inevitable cancellations and eventual application towards purchases. I can't remember where but I thought I read/heard somewhere that they definitely maintained some sort of account for this and that they didn't just immediately begin spending the money. The shareholder letter this year showed they have a liability of about $91 million in reservations and yet are holding $255 million in cash. ( investor letter)

You are using slightly creative accounting to claim that they are making 20% off of reservation payments. I think that you are basically saying that borrowing cash from investors might cost them, for example, at least 20%. Since they are "borrowing" cash from reservation customers at 0%, then they are effectively "making" the 20% that it would have otherwise cost them to borrow the money. That sounds to me like when a politician says they are shrinking the budget by reducing the amount of (still positive) projected growth in the budget year-to-year. Or another example is if you were prepared to buy a burger for $5, but then you get to counter and happily discover that it only costs $4, and then tell everyone that you made a $1 profit by eating out today. That doesn't make any sense.

The only way Tesla is making/will make money is buy selling cars to customers and components/designs to auto makers (or by selling itself). They haven't done much of either yet. Again, ff they can take a bunch of cash, and make 20% doing a mysterious "something" that doesn't ivolve selling anything or investing in another undervalued enterprise about to start producing and selling something great, well then these folks are geniuses and should drop this silly car business and just do that full time or they're cons and you're never going to see your money again. But the notion that they are "certainly" making 20% on our deposits is crazy. That's only going to become true when they sell cars and then only if their margin is high enough.

Brian H | 30. April 2012

olan;
there is some justification for the number. There is a de facto implicit cost of capital in the economy. It varies by risk, etc. If you don't need a loan, the bank will give you one at the minimum rate. But the more you need the money, the more you pay. The nominal 20% is implicitly 'calculated' to provide base ROI AFTER expected defaults across a large number of such investments.

Mark E | 01. Mai 2012

If you can show me a safe place to put cash and return 20% p.a. In today's environment I'd find it difficult to believe you. I haven't seen interest rates that high in over 30 years, and not in the US.

Brian H | 04. Mai 2012

MarkE;
Trick answer. I specified risk, and investment in a new company (like Tesla). How much, btw, do you think people pay on their credit cards if they just cover interest each month? How much does a venture capitalist want? How much will the bank charge for a big loan you if you work at home as an independent unincorporated consultant? (Not that such loans exist any more, which is to say the interest rate is effectively infinite.)

markdipaola | 04. Mai 2012

Hi all,

I have a Model S Signature Performance reservation # below 75, with estimated delivery ~8 weeks from now. I am willing to sell the car (or, with Tesla's blessing, the reservation) due to a change of heart.

Before the trolls attack, note that I'm a loyal Roadster owner who has spent all day hand-wringing over whether I want to sell Model S I've been looking forward to for almost 2 years. My garage is full, and I would reeeeally love to play with the toy I've been waiting for, but I am going to go with logic over emotion in this case.

It is configured black paint, black leather, piano black trim. MSRP $97,900 + tax.

If Tesla does not allow a transfer pre-sale, you would purchase from me directly in Los Angeles.

If you have a serious interest, please leave me a message with your offer at 310-997-0263, and I'll return your call. (The tax credit may not transfer to you, so please take that into account.) Thanks!

Brian H | 05. Mai 2012

bay2la;
Surely you will know up front whether the credit transfers, and if not take that into account in the transaction price. I assure you the buyer will!!

Pärtel | 22. Mai 2012

It's now been a month since I first contacted Tesla and only now (after a second reminder) I received the following response today:

Dear Pärtel,

Thank you for your e-mail.

We are dealing with your request and we will be in touch with you shortly.

Thank you.

LarsT | 28. Mai 2012

Anyone with a Signature Number below 500 that needs a little more time?
I have a couple of reservations for Model S running. My first one is S 1118 (and some Ps) and I'd be more that happy to swap to an earlier number. If so, drop me a note at lars@thomsen.com. Thanks!

Brian H | 28. Mai 2012

Lars;
How many total have you reserved? Why so many?

LarsT | 08. Juni 2012

I am heading a company for future research in Europe and the US. Our partners need to drive the most future-minded car there is.

Volker.Berlin | 08. Juni 2012

LarsT, are you looking for a deal on US reservations only, or are you looking for European reservations as well? I am very much looking forward to taking delivery of my Model S EU #P3 in Germany in early 2013. However, if we can agree on a deal that substantially helps me financing my own Model S, I might be willing to get back to the end of the queue. You can contact me by way of private message over at TMC (same nickname).

Volker.Berlin | 08. Juni 2012

Sorry to everyone for my last post. I missed the fact the Lars was providing his email address above. I should have contacted him directly instead of bothering the public with my comment.

johngilmour | 09. Januar 2013

Pretty frustrated, market conditions mean I might not be able to take delivery of my Model S. So I feel the Original posters pain.

I put a deposit in a few months ago so my wait time is about 6 months.

Annoyed particularly, that I will lose the discount I got for making the reservation before the price increase. It would ahve saved me about $1500.

johngilmour | 09. Januar 2013

And reservation # in the 13,000 range it is killing me! But oh well.

jk2014 | 09. Januar 2013

You are placing a reservation over the Internet for an American product. US law applies. Can't transfer even if you live overseas.

jk2014 | 09. Januar 2013

Also, if you think Tesla's making money off your reservation, get a refund. Demand your money back. It's 100% refundable at any time before you lock in your options. After you lock in, the money becomes a non-refundable deposit.

Let me restate, reservation payment is to reserve a place in line. 100% refundable at any time. Tesla is very up front about this. If don't like the fact you don't get interest on your money, don't make a reservation. Once you config and agree to have the car made, you will not get your reservation payment back. That money will be applied to the purchase price when you make your final payment.

DouglasR | 09. Januar 2013

@jk2014,

Is it really 100% refundable now? When I reserved in 2009, it was 95% refundable (i.e., everything but $50). Of course they sent me a T-shirt, a mug, a hat, and a remote-control Roadster worth more than $50. Now they could take it all away because, like the Cheshire cat, I will still have the grin.

jk2014 | 09. Januar 2013

@DouglasR -- ha! Wish I could get a remote-control Roadster!

olanmills | 09. Januar 2013

@DouglasR, yes, the deposit is 100% refundable until you are invited to configure your car. At that point you will e-sign a document acknowledging that you are actaully ordering the car that you want to buy and that the deposit is now non-refundable.

jk2014 | 09. Januar 2013

I like a hear an echo... (just messing with you olanmills)

jk2014 | 09. Januar 2013

"think" ...auto correct sucks...

Brian H | 09. Januar 2013

jk2014;
Turn it off! There'a a menu option somewhere for that.