Tesla Motors Inc. has ended its resale guarantee program in North America. People tend to upgrade to newer-model cars every few years, so guaranteeing something like a resale value is an interesting tactic for luring the tired.
Tesla valued the total liability created by the resale value guarantee at $1.58 billion as of March 31, according to its latest quarterly filing with the Securities and Exchange Commission, up over 20 percent since the end of 2015. The decision will apparently also reduce Tesla's interest rates "as low as possible" and make leases and loans more compelling.
The program, which began in 2013, guaranteed that Tesla vehicles would have a higher resale value after three years than premium sedans from manufacturers such as BMW and Mercedes.
In effect, Tesla is now doing what most established auto makers do: allow market forces to set trade-in values. Tesla had expected the new SUV to sell in equal numbers to its sedan, the Model S, but so far deliveries of the vehicle have been less than half that of the auto. A three-year-old Leaf is selling on average for about 20 per cent of its price when new, he said.
Tesla CEO Elon Musk said the automaker has no plans of disabling the Autopilot system following the fatal May crash, but instead the company plans to redouble efforts to educate customers on how the system works.
The 2017 Ford F-150 full-size pickup truck with 3.5-liter EcoBoost V-6 and 10-speed automatic transmission gets a confirmed power boost over the model it replaces.
Tesla shares closed down almost 1 percent at $222.53. Tesla says the technology is still in public beta mode and drivers must confirm they know this before starting its use. If you decide later down the road that you want to rake more travelling distance while spending some cash, you can always swap the 60kWh battery with the 75kWh cell present inside the Model X 75D.
The Model X price cut follows a similar price reduction for the Model S, whose base price was lowered to $66,000 last month.