Second-hand Teslas have emerged as a much sought after commodity in China, thanks to young drivers hoping to own a premium electric vehicle (EV) at a lower price.
Motorists can save at least 50,000 yuan (US$7,731) on a made-in-Shanghai standard range Model 3 if they choose to buy a pre-owned car.
“We have seen a big jump in transactions involving used Tesla cars,” said Tian Maowei, a sales manager at Yiyou Auto Service in Shanghai. “The pace of growth in demand has surprised many dealers, and it will continue to surge.”
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Second-hand EVs have not always been popular among mainland Chinese consumers, but the increasing use of such cars has encouraged a growing number to seek their next vehicle in the pre-owned market.
EVs made by the Palo Alto, California-based carmaker outsell their domestic competitors on a regular basis and Tesla is a runaway leader in the premium segment. Last year, its Gigafactory 3 in Shanghai delivered about 140,000 Model 3s. In the first six months of this year, Tesla has sold more than 130,000 Model 3s and Model Y sport-utility vehicles. The Model Y was launched on January 1 this year.
Tian said the company handled about three to five transactions involving second-hand Model 3s every month last year. This year, this number had shot up to more than 10 since April. Most of the cars sold were Model 3s assembled in Shanghai, which began production at the end of 2019.
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“Tesla cars are no longer a means of transport,” said Jane Kong, 30, a Model 3 owner in Shanghai. “We view them much like smartphones, which need to be updated all the time,” she said. The white-collar worker added that she planned to sell her Model 3 and replace it with a Model Y, which could cost her an 100,000 yuan or more.
The already active second-hand market is also being fuelled by some owners who face restrictions when it comes to using Teslas.
In March, The Wall Street Journal reported that Beijing had restricted the use of Teslas by military staff and employees of key state-owned companies because of security concerns. The company was found to use cameras and ultrasonic sensors inside its cars, the report said. Tesla CEO Elon Musk downplayed the concerns and dismissed speculation that its cars could be used for spying.
Anecdotal evidence suggests that local governments and state-owned companies have also banned the cars.
Kenneth Ding, a Shanghai civil servant who recently bought a Model 3, was thinking of selling the car because “it was useless now”, he said. “Since the car is denied access to the office building, I have no choice but to sell it.”
The Model 3 is the first choice for motorists pursuing second-hand EVs. A used Model 3 sold to a dealer will be priced at 170,000 to 180,000 yuan, about 30 per cent less than a new car sporting a price tag of 250,900 yuan.
“This is yet another example of Tesla being a global leader in the EV market,” said Chen Jinzhu, CEO of Shanghai Mingliang Auto Service, which sells car insurance and second-hand vehicles. “Young people are keen on owning a Tesla – it does not matter if it’s brand new or pre-owned,” he added.
Luo Lei, the deputy secretary general of the China Automobile Dealers Association, said used EVs, particularly Teslas, will eventually reinforce China’s efforts to meet its carbon-neutral goal in 2060, since more people will own and drive them via the second-hand market.
“The [second-hand EV] market has reached a new phase, as transactions will accelerate at least at a double-digit growth pace in the next few years,” he said. “Undoubtedly, more people who have a penchant for high-end EVs will be interested in buying them, although some owners may want to cash out for their own reasons.”
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