Elon Musk @elonmusk
Time to up the ante (and fix some mistakes). Tesla announcement tomorrow.
Well, while I do love the MS, I wonder which mistakes?
I do like the "up the ante"
"Not groundbreaking, but certainly good news” my point exactly! This should have been just a press release not a live conf call unless we have “and one more thing….we are putting in 200 Super Chargers by the end of the year!"
My mistake. 580 for people, 315 for business. I guess I could get a job at CNN.
Don't know whether this document (http://www.teslamotors.com/sites/default/files/pdfs/tesla-resale-value-g...) has been updated or it is still the original. It says
"This [Guaranteed Resale Value] will be 50% for the base 60 kWhr car and 43% for all options including the upgrade to 85 kWhr battery pack (exclusive of taxes, fees and accessories) of your vehicle"
And it only applies at 3 years (36-39months) - at no other times and with no other values.
Great correction... Version 1.1 rather...
This is exactly what needed to be done. Definitely will get a broader market. People are constantly going into the tesla stores every day, now they can get a better grip on how they will be able to afford one.
Everyone I talk to (average middle class driving about 120 miles/week), wishes they could afford one, but don't see how it's possible financially. They only see the sticker price. They also only see a short range car with no way to travel long distances. These barriers are eased a little more now with this correction and the warranty announcement.
The topper will be the supercharger announcement (and hopefully the unveiling of the the production MX!).
The guarantee contract has indeed changed from yesterdayhttp://www.teslamotors.com/sites/default/files/pdfs/tesla-resale-value-g...
It no longer references Mercedes, like the original contract did in a meaningless way..
The whole references to Mercedes, Audi, Jaguar, etc. in the conference call makes everyone think that in 3 years there will be some sort of calculation from the "leasing resale guide" (sorry can't remember the name of the guide). But really this is just a contract at the time of delivery where they promise to buy it back for a minimum of 50% of MS60 + 43% of all options (including 43% of the $10k upgrade cost for the MS85). So basically the promise increased by 7% of the price of a base MS60.
During the call Elon was asked if Tesla would pay more, for example if the car after 36 months had very low miles, and I heard him say (to paraphrase) "Yes, if the it's worth more, the new guarantee is just a minimum", but of course that's not what the contract says.
We now know the ante = $4,974.90
Wonder how car services will lie this? Will they be more interested buying MS now?
Wit respect to valuation of MS after three years, did anyone consider the impact of the $7500 rebate? Basically the MS should be valued $7500 less in the used car market, but the rate here I assume is based on the MVPA invoice (pre-rebate, that is). So this would mean people who opt for financing will possibly get an even better value after three years than if they were to sell it themselves?
My assumption is that a person buying a MS with 0 miles on it would be indifferent between buying it new and able to claim $7500 rebate; or buy it "used" from an owner at quoted new price less $7500. (not factoring in the ~11% a car typically loses in value just by driving off the dealer lot...)
Elon guarantees that you will get new price less 50% for your MS after three years. But the cars that we are comparing to do not have EV rebates (BMW, Merc., Jag). So you are not comparing apples-to-apples. This would be in the buyers favor....
The rebate is irrelevant to the valuation of the car, new or used.
In what way is Elon personally guaranteeing this resale value? Looking at the agreement, his name never appears, and in fact it says, "Tesla Motors, Inc. and any of its successors hereto, may assign or transfer this Guarantee, or any portion thereof, to any third-party without your prior consent or approval."
@Brian H - I was referring to the market value. The market value of a car should be affected by the EV rebate in that the rebate will drive down the value in the secondary market.
Assuming you are buying a used EV, since you can't claim the rebate you will want to see some compensation for it in the price you are paying for the used car. My MS cost about $80k, but I couldn't just turn around and sell it for $78k two months later. It would have to be something like $70k (assuming I will be able to still claim the rebate on my taxes next year).
Elon however will be guaranteeing the residual value to be based off of the invoice which should be higher than the identical car in the used car market even if they depreciated at the same rate? Maybe I'm making an incorrect assumption somewhere??
The rebate has no effect on the purchase price. The new buyer pays full price and gets the $7500 credit the next tax day. A used buyer might try to use the "net" as a basis for valuation and depreciation, but only a weak negotiator would succumb to that ploy.