Tesla last November ended an unusual policy that prohibited U.S. leasing customers from buying their cars at lease-end.
The policy started in 2019, when Tesla announced that customers could lease its mass-market Model 3 sedans but would have to return them, at the end of the lease, for use in Tesla’s planned “robotaxi” network.
“Next year, for sure,” he added, “we’ll have over 1 million robotaxis on the road.”
None of that would prove true. Despite repeated promises, the robotaxis never came. Tesla instead found an unusually lucrative way to make money by flipping many of the off-lease cars to new buyers, according to four people familiar with Tesla’s retail operations.
Rather than storing the used cars – a fast-depreciating asset – Tesla started adding features to them through software upgrades. It then sold the vehicles to new customers who would pay thousands more than lease-end buyers would have, the people said.
The language isn’t the most clear here because Tesla is both the manufacturer, the first party seller, and the second party customer, then again a first party seller.
For new cars Tesla sells, Tesla would be the first party. For lease returns Tesla sold (aka refurbs), Tesla would be second party, as they were the buyer of the refurb car. So in a new transaction where Tesla is selling the refurb car, Tesla would be the first party of that second sale.
Under none of the cases recorded so far did Tesla sell a used car as a new one.