No good thing lasts forever. Look to Tesla canceling its guaranteed buyback program for electric cars as proof of that. Green Car Reports states that the program, which was launched in 2013, was void as of July 1. The program’s purpose was to assuage customers’ fear that the resale value of the then-new Model S sedan wouldn’t plunge. Well, so much for that.
Green Car Reports states that under the old program, Tesla essentially let owners lease their cars. After three years, owners could sell their cars back to Tesla at a guaranteed price. That price equaled 43 percent of the Model S purchase price.
According to Reuters, the program sprung a leak in Tesla’s cash reserves. A Tesla spokesperson told Reuters that the program was nixed in order to “keep interest rates as low as possible and offer a compelling lease and loan program to customers.”
The change wasn’t too surprising considering that earlier this month, Tesla said it would be missing its vehicle delivery target for a second consecutive quarter.
“In effect, Tesla is now doing what most established auto makers do: allow market forces to set trade-in values,” says Reuters.
Green Car Reports points that Tesla probably needs the cash reserved for its buyback program to fund other projects.
But that’s not all Tesla has going on. The auto maker has also slashed the starting price of its Model X crossover. The announcement of the discount came today. Will people buy it? We will have to wait and see because Tesla is currently getting over a recent Autopilot scare.
That’s probably why Tesla CEO Elon Musk tweeted this yesterday:
Will be working at Tesla on Autopilot & Model 3 today, then aiming to pull an all-nighter and complete the master product plan
— Elon Musk (@elonmusk) July 19, 2016