Tesla is Doing Damage Control With Euro Fleet Buyers After Price Cuts Shave Residual Values
Fleet buyers usually get a better price than individuals because of the large volumes they purchase, but Tesla is offering deeper discounts to some European leasing companies after previous price cuts caused a significant decrease in the values of their vehicles. That, plus expensive repairs, have driven a wedge between the American automaker and its partners on the old continent.
Tesla will give discounts (unofficially, of course) to fleet buyers if vehicles are in stock, and the automaker said it would work to address buyers’ complaints about service and parts availability. Many have accused Tesla of ignoring those problems over the years, and it’s now feeling the pressure of intense Chinese competition.
Tesla ran into similar complaints in the U.S. when owners discovered their recently purchased vehicle values dropped considerably when it cut new prices. Fleet purchases are especially important to the automaker in Europe, where they make up around half of overall auto sales.
The automaker’s actions might help its cause with fleet buyers, but they might not go far enough. Some leasing firms have looked to Chinese automakers after taking a hit from Tesla. Residual values have tumbled so hard that discounts may only represent a portion of the damage done. It’s also worth noting that the discounts have been available since last year, but we’re just now learning about them, thanks to Tesla's lack of PR.
[Images: Tesla, Shutterstock]
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Chris grew up in, under, and around cars, but took the long way around to becoming an automotive writer. After a career in technology consulting and a trip through business school, Chris began writing about the automotive industry as a way to reconnect with his passion and get behind the wheel of a new car every week. He focuses on taking complex industry stories and making them digestible by any reader. Just don’t expect him to stay away from high-mileage Porsches.
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EB, only gear oil changes once every ~100 K miles, I would guess. Unless, of course, the owner doesn't want to bother.
Now that we're on the topic, I think Apple owes us all a ton of money for bringing out new phones every 1-2 years and devaluing the one I have! /s
Depreciation has always been a part of car ownership, far more so now if you're getting into EVs. I think it's just the discrete nature of these depreciation events (ie, price cuts) that have everyone wringing their hands.
I'm too price sensitive -- not necessarily to BUY an EV -- but for the fear of what a truly disruptive battery tech might do to them. Split the differene with a hybrid or PHEV and you've reduced your car's reliance on battery tech as the primary determinant of value.