Tesla withdraws resale value guarantee on all cars bought after July 1

By : |July 14, 2016 0

Tesla came up with an excellent idea to offer Resale Value Guarantee in 2013 when it introduced upscale electric cars. The program dissipated the risk factor involved in buying a car on a fairly new concept, compared to say a German sedan. But now that Tesla has seen the market for electric cars evolve, the company has withdrawn the program for all new car bought after July 1st.

Cars bought before July 1st, under the guarantee, will still be covered, but any relative latecomers will just have to trust that the used EV market will work in their favor. “The move will reduce interest rates “as low as possible” and sweeten leases and loans,” a company spokesperson said.

One of the major reasons why Tesla discontinued the guarantee is because maintaining the program could get expensive. Tesla’s promise included at least 50 percent of the base price as well as 43 percent of the options pricing as resale value. This isn’t a problem when the company is selling the relatively small number of luxury cars, but it could cut much deeper when Tesla starts selling hundreds of thousands of Model 3s.

This may come as a disappointment for many who are planning to buy Tesla’s electric car, but for an industry, this means that the electric vehicle market is growing up. Tesla’s strategy managed to jack up demand, and now it has enough traction to ditch the guarantee without worrying that sales will drop.

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