Tesla Cybertruck  Reversal on Resale Clause

Tesla Cybertruck is the long-awaited electric Vehicle. However, early reservation holders hoping to profit quickly may be disappointed when Tesla adds a new condition to its Motor Vehicle Purchase Agreement (MVPA) to prevent flipping. In an unexpected turn of events, Tesla has quickly reversed its strict stance on the resale of Cybertrucks following a weekend of widespread protest. The shift comes after the firm faced tremendous criticism for its previous decision to sue early Cybertruck owners for large sums if they attempted to sell their cars within the first year of ownership.

Tesla first unveiled the Cybertruck in November 2019, with deliveries expected in 2021. Delays occurred due to the global pandemic, supply chain challenges, and prioritizing Model 3 and Model Y manufacturing. Despite the hurdles, interest in the Tesla Cybertruck is increasing, with reservations exceeding 1.5 million.

No Quick Flips Over Tesla Cybertruck

Early reservation holders intending to capitalize on the high demand by swiftly reselling their Cybertrucks may be foiled by the MVPA’s new “For Cybertruck Only” rule. This condition prohibits resale within the first year of ownership without Tesla’s written consent.

Stringent Resale Terms

Tesla’s clause outlines a process for potential resale. If granted permission, Tesla holds the right to buy back the Cybertruck at the listed purchase price minus wear and tear costs. If Tesla declines, the owner can only sell to a third party. Breaching this clause could result in legal ramifications, such as Tesla suing the owner and perhaps prohibiting future vehicle sales.

Under the “No Resellers” section, which generally prohibits dealerships from purchasing Teslas in bulk to resell them, a new section has been added called “For Cybertruck Only,” which reads as follows:

For Cybertruck Only: You understand and acknowledge that the Cybertruck will first be released in limited quantity. You agree that you will not sell or otherwise attempt to sell the Vehicle within the first year following your Vehicle’s delivery date. Notwithstanding the foregoing, if you must sell the Vehicle within the first year following its delivery date for any unforeseen reason, and Tesla agrees that your reason warrants an exception to its no-reseller policy, you agree to notify Tesla in writing and give Tesla reasonable time to purchase the Vehicle from you at its sole discretion and at the purchase price listed on your Final Price Sheet less $0.25/mile driven, reasonable wear and tear, and the cost to repair the Vehicle to Tesla’s Used Vehicle Cosmetic and Mechanical Standards. If Tesla declines to purchase your Vehicle, you may then resell your Vehicle to a third party only after receiving written consent from Tesla. You agree that in the event you breach this provision, or Tesla has reasonable belief that you are about to breach this provision, Tesla may seek injunctive relief to prevent the transfer of title of the Vehicle or demand liquidated damages from you in the amount of $50,000 or the value received as consideration for the sale or transfer, whichever is greater. Tesla may also refuse to sell you any future vehicles.

Precedent in the Automotive Industry

This restrictive clause isn’t unique to Tesla; General Motors (GM) implemented a similar measure for the Hummer EV. Exclusive automakers like Ferrari and Lamborghini also maintain lists of customers who commit not to resell their limited-edition cars for a specified period. Although these clauses might seem legally challenging, they are not unprecedented. Ford sued wrestler John Cena for reselling a Ford GT, violating a resale clause. Ferrari, known for exclusivity, employs similar restrictive measures.

Tesla’s delivery event at Giga, Texas, on November 30, will be a historic moment as the Cybertruck hits the road at the end of the month. According to the amended MVPA, early owners would face restrictions on reselling their vehicles for a year after taking possession. While several exceptions require Tesla’s consent for resale, the company has the right to deny such requests. Breaching the terms may result in legal action, with Tesla seeking injunctive remedies or monetary damages.

Public Response to Tesla Cybertruck Clause

The announcement sparked extensive discussions and debates about the ethics of such a clause. While many condemned scalping practices and saw merit in preventing them, others expressed concerns about the infringement upon owners’ rights once they’ve purchased a vehicle.

Unusual Application for a Mass-Produced Vehicle

Applying such a restrictive clause seemed unconventional for a vehicle designed for mass production, advertised initially with a base price of $40,000. With Tesla’s yearly capacity of 125,000 units, the clause appeared perplexing for a vehicle intended for universal availability.

Chaotic Release and Unique Features of Tesla Cybertruck

The Cybertruck’s unique features, such as its extra-thick stainless steel exterior and 48-volt electrical architecture, have piqued the interest of rival automakers. Tesla’s strategy of limiting early sales aims to minimize chaotic launches and potential problems with low-VIN cars.

Future Speculations

Despite its removal from the present agreement, suspicion persists that the clause may reappear in subsequent editions or a specialized agreement tailored exclusively to early Cybertruck purchasers. The details of these agreements are yet to be released, and Tesla lacks a formal communications department. The exact terms and conditions regarding resale restrictions for early Cybertruck buyers remain uncertain.

Tesla’s strategy is to preserve market control, minimize scalping, and maintain a degree of exclusivity by limiting early Cybertruck resale. Tesla’s rapid reversal on the Cybertruck resale clause underscores the power of public opinion and the company’s adaptability to respond to customer feedback. In anticipation of the distribution of early Cybertruck agreements at the end of the month, the evolving narrative surrounding Tesla’s resale policies continues to intrigue the automotive industry.