No Resale Agreement?

BayouCityBob

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There is a high probability that many CT buyers in the first 18 months will be profiteers buying to flip the vehicle. Many Rivian buyers continuing to do that. It is also common with other high popularity vehicles. (In brands like Ford and GM that use the franchise stealership model, the local stealership massively marks them up.) Ford tried a no-resale for 12 months contract on the Lightning. Not sure how much good it did. So here is a modest proposal:

Tesla should include a 12 month buy-back right on the CT. Simple agreement. Tesla has, at its option, the right to buy-back the truck if you decide to sell it, for full purchase price, anytime during the first 12 months. If Tesla turns down the right to buy then sell as you see fit.

It will discourage profiteering from the speculators. You want the truck, buy it /drive it /enjoy it. Situation changes? Sell it for a full refund to Tesla if they want it or on the secondary market if they do not. Your early reservation has no value other than that you get to buy the truck earlier.

Okay, blast away. :)
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SolarWizard

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So youā€™re wanting tesla to pay me back MSRP for a vehicle I put 20k on in a year? If so im still making money unless theres another way to drive vehicles for free that im unaware of. What if they raises prices and I wreck it? Are they gonna stop my insurance company from paying me more than I did?

If people wanna flip vehicles, they should be allowed to do so. Otherwise, should tesla ban turo? What about paid photo shoot/youtube profits? What about the promise of a robotaxi that they gave impossible timelines for, thus driving sales for ā€œprofiteersā€?

If tesla misses out on some money through resale or people with more money than patience and wanna skip the line, ALL of us benefit in the long run because more sales = more scaled production = more free advertisement = more $/share

I canā€™t believe this is still a topic quite frankly. People act like Uncle Elon is running a non-profit giving out canned goods and people are sellin green beans off a table out front.
 
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BayouCityBob

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I canā€™t believe this is still a topic quite frankly. People act like Uncle Elon is running a non-profit giving out canned goods and people are sellin green beans off a table out front.
The even fairer alternative is for tesla to just auction the vehicles. Forget all this reservation nonsense. Why should you - who have contributed absolutely nothing to the vehicle's design, engineering, manufacturer, etc. - profit from its popularity? Just auction the vehicles. The end.
 


SolarWizard

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Auctioning off vehicles is probably even less fair to the market place and likely triggers lenders to balk at (and forget offering GAP) insuring the trucks.

ā€œHe bro I know we owe you the money for a new truck so hereā€™s what the floating MSRP was 4 months ago at auction #942 where a truck sold for retail at 3am. Happy hunting!ā€
 
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BayouCityBob

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Auctioning off vehicles is probably even less fair to the market place and likely triggers lenders to balk at (and forget offering GAP) insuring the trucks.

ā€œHe bro I know we owe you the money for a new truck so hereā€™s what the floating MSRP was 4 months ago at auction #942 where a truck sold for retail at 3am. Happy hunting!ā€
Lol. Wait, wait. So...

  • Individuals auctioning off their vehicles (flipping) for whatever price it totally fair
  • Tesla auctioning off their vehicle is totally not fair
  • Tesla having right to buy back to discourage profiteering is not fair
So basically the only fair thing is for people who contributed nothing to profit from someone else's labor and ideas. Noted. Cool. (The new) American way.
 

SolarWizard

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Lol. Wait, wait. So...

  • Individuals auctioning off their vehicles (flipping) for whatever price it totally fair
  • Tesla auctioning off their vehicle is totally not fair
  • Tesla having right to buy back to discourage profiteering is not fair
So basically the only fair thing is for people who contributed nothing to profit from someone else's labor and ideas. Noted. Cool. (The new) American way.
I didnā€™t say it was fair or unfair. Loan to valueā€™s have limitations and a one off purchase SECOND HAND (used) purchase plays to an entirely different set of rules vs an OE Just haphazardly charging anything and introduces way more issues. How would someone know they qualify for ā€œnormalā€ insurance or financing on an auction.

ā€œOk so you good for insurance and financing on a 90k truck but 91k gonna need more money down and a special insurance riderā€ teslas response ā€œoh so sorry your dream fell through. Thanks for your auction fee though, donā€™t bother bidding again you outā€

The the whole other layer of the tax credit, IF the ct qualifies is based on MSRP. Imagine that nightmare. Maybe they should set the MSRP on all their vehicles at whatever the max tax credit is and auction them all. Thatā€™ll go great with the IRS and windbags in washington.

and furthermore every single person buying one contributes as much as the people building and designing them. No customers no business. No cybertruck
there is absolutely nothing new about making a profit on goods and services.
Ever bought a soda at a vending much or the 12 million other examples of someone charging for more a good than they paid previously.

Please crack down on the next bake sale or lemonade stand you come across. Those pirates are tearing at the softbelly of our otherwise egalitarian society where only the profits of a $700B company matter
 
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cvalue13

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Ford tried a no-resale for 12 months contract on the Lightning. Not sure how much good it did. So here is a modest proposal:
Point of process: Ford didnā€™t try anything; it merely said that it would stand aside if dealerships wanted to attempt that.

Having been active on the Lightning forums, I donā€™t know if a single buyer who executed one, and only a few rumors of dealers even suggesting (but not pressing) one.

Months before my truck was delivered, my dealer said Iā€™d need to sign one. I said ā€œno.ā€ They never raised it again.

Tesla should include a 12 month buy-back right on the CT. Simple agreement.
There is a difference between a contract with ā€œsimpleā€ terms, and a contract that is simple to enforce.

These sorts of ROFR/ROFO contracts are not as simple as they may seem to draft, well. Take just one of a dozen examples of maneuvers that would require pages of language to address: two months after I buy my CT a friend offers a straight-up trade for his custom boat, and I accept. This can be drafted around, but it takes some lengthy work to come up with a working methodology for converting the market value of the custom boat to a purchase price. Or when I die and my estate goes to liquidate? At least a dozen such issues need drafting around, to be a merely half-decent ROFR/ROFO. Now your ā€œsimpleā€ agreement is 20pgs long.

And as between a sophisticated, lawyered, party like Tesla vs an unsophisticated party that is unrepresented, good luck either (A) having a court enforce such a contract against the unrepresented party, or (B) convincing Tesla to supply counsel to every buyer so as to negotiate the agreement.

And even if you manage to get past all that, theyā€™re almost impossible to enforce, as a practical matter - at least for any lower priced, high volume, item like a CyberTruck ,

Accordingly, those contracts tend to only ā€œworkā€ on owners who donā€™t understand the agreementā€™s or their weaknesses, and so act much like front door locks - they only keep honest people out.

As for auctions, you and another member should get a room!
 


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BayouCityBob

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There is a difference between a contract with ā€œsimpleā€ terms, and a contract that is simple to enforce.
FWIW, I think you are missing the beauty of the idea and its simplicity. It is not a ROFO or a ROFR. Those get complex as you rightly point out, especially around the price. In my proposal the price is already set (purchase price). So In your trade for the boat example, it is irrelevant what the boat is worth. You have an obligation to offer it to Tesla first. If they want it, the price is $____ (original purchase price). If they do not, trade, sell, burn to the ground, it is of no concern to Tesla.

Now, as for enforcement, when you buy a used Tesla you need to contact Tesla to transfer the vehicle. The new owner then becomes responsible for all the Supercharging, connectivity fees etc., and the new owner is the owner of record for electronic access to the vehicle (the PAAK and app etc.). So Tesla has a natural enforcement opportunity. They will not transfer owners if you did not meet your contractual obligation to offer the vehicle for sale to Tesla first.

Of course, I do not really care. Just an interesting thought experiment on a slow news day. We have an early reservation and it will be nice to flip the vehicle for a profit if we decide not to keep it. Fantastic return on $100 whether we keep it or flip it.
 

Ogre

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People reselling for a profit is a very short term issue. Tesla has measures to mitigate large scale abuse, and putting more draconian limits up screws with owners and will almost certainly cost Tesla more to implement than itā€™s worth.

Once Tesla has 50,000 trucks in consumers driveways, the premium will come down fast. Weā€™re about a year after Rivian and Ford put their first vehicles on the road and used prices are below new now even for very low mileage vehicles. While demand isnā€™t as high for these vehicles, supply has been quite tight on both. These other vehicles also give a good substitute vehicle for people who just want an electric truck.

Lots of people who thought theyā€˜d be able to flip their Lightning or Rivian are crying right now. Similar situation will happen not long after Cybertruck is out.

Likely within ~6-12 months of first shipment used prices on Cybertruck will stabilize to something sane. Used cars get even crappier financing than new and interest rates are relatively high right now. Also, transaction costs are high, particularly in sales tax states. California flippers will pay 8% tax on their new truck, then the buyer will pay another 8% on top of that. All of this carves into profits fast.
 

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