If you buy a Cybertruck, Tesla says you can't sell it for a year(theverge.com)
theverge.com
If you buy a Cybertruck, Tesla says you can't sell it for a year
https://www.theverge.com/2023/11/13/23959481/if-you-buy-a-cybertruck-tesla-says-you-cant-sell-it-for-a-year
77 comments
I think it is unreasonable. A remote deactivation of your car if you sell what you paid full price for? I think at least they should be willing to buy it back from the customer.
Oh man, I didn't read the remote deactivation part - that really is crazy!
Preventing resale isn't so unusual, but having your property violated definitely is.
Preventing resale isn't so unusual, but having your property violated definitely is.
Your rights are always slowly taken away for very civilized and reasonable reasons.
It seems to me the correct solution to price scalping is to raise prices.
That has image consequences, making them look too expensive for more people compared to the competition. It isn't as simple as “the price the market will bear right now”, they have to consider the longer term effects of putting people off.
The obvious answer to that is of course “then just make more, if there is enough to go around the scalpers won't make any/enough profit” but that has its own problems: the production processes are not yet scaling that way, perhaps due to quality issues caused by trying to speed up, perhaps due to limited amounts of specialist production-line equipment for the affected models, perhaps due to issues getting enough raw materials at a faster rate for the “right price”, perhaps a mix of all of the above (plus a little intentional generation of artificial product scarcity in the market).
Assuming I'm right about process (and material sourcing) scaling issues being a significant part of the problem, charging more because the existence of scalpers indicates that (at the current production levels) they can would be like [artist of the moment] charging much more per place at concerts, or the events like the London Marathon charging double/triple/more for the base entry price instead of using a balloted entry system. They can't simply make more places available, and the two-tier system (the haves can have, the have-nots can't afford) resulting from higher prices would cause image souring and affect future interest & sales (and for those that genuinely care about the art/atmosphere/event at least as much as the money, may offend the economic morals of the artist/organisers too). The target end result is to be a mass production vehicle, not a low volume collectors item.
The obvious answer to that is of course “then just make more, if there is enough to go around the scalpers won't make any/enough profit” but that has its own problems: the production processes are not yet scaling that way, perhaps due to quality issues caused by trying to speed up, perhaps due to limited amounts of specialist production-line equipment for the affected models, perhaps due to issues getting enough raw materials at a faster rate for the “right price”, perhaps a mix of all of the above (plus a little intentional generation of artificial product scarcity in the market).
Assuming I'm right about process (and material sourcing) scaling issues being a significant part of the problem, charging more because the existence of scalpers indicates that (at the current production levels) they can would be like [artist of the moment] charging much more per place at concerts, or the events like the London Marathon charging double/triple/more for the base entry price instead of using a balloted entry system. They can't simply make more places available, and the two-tier system (the haves can have, the have-nots can't afford) resulting from higher prices would cause image souring and affect future interest & sales (and for those that genuinely care about the art/atmosphere/event at least as much as the money, may offend the economic morals of the artist/organisers too). The target end result is to be a mass production vehicle, not a low volume collectors item.
Or make more product.
> Just saw the remote deactivation point too, which really is awfully dystopian
I'm fascinated to see what happens if they actually try this. Hard to imagine it standing up in court.
I'm fascinated to see what happens if they actually try this. Hard to imagine it standing up in court.
[deleted]
> “You agree that, you will not sell or otherwise attempt to sell the Vehicle within the first year following your Vehicle’s delivery date,” without getting permission. Breaking the deal could result in your truck being remotely deactivated.
This passage seems to have been removed from the linked PDF [0].
Might have been related to:
"No Resellers; Discontinuation; Cancellation. Tesla and its affiliates sell cars directly to end-consumers, and we may unilaterally cancel any order that we believe has been made with a view toward resale of the Vehicle or that has otherwise been made in bad faith, and we’ll keep your Order Fee, Order Deposit and Transportation Fee."
"If you are in default, we may, after any legally required notice or waiting period: (i) do anything to protect our interest in the Vehicle, including repossessing the Vehicle using legally permitted means, (ii) locate and disable the Vehicle electronically using our remote dynamic vehicle connection described in our Privacy Policy, [...]"
[0] https://www.tesla.com/configurator/api/v3/terms?locale=en_US...
This passage seems to have been removed from the linked PDF [0].
Might have been related to:
"No Resellers; Discontinuation; Cancellation. Tesla and its affiliates sell cars directly to end-consumers, and we may unilaterally cancel any order that we believe has been made with a view toward resale of the Vehicle or that has otherwise been made in bad faith, and we’ll keep your Order Fee, Order Deposit and Transportation Fee."
"If you are in default, we may, after any legally required notice or waiting period: (i) do anything to protect our interest in the Vehicle, including repossessing the Vehicle using legally permitted means, (ii) locate and disable the Vehicle electronically using our remote dynamic vehicle connection described in our Privacy Policy, [...]"
[0] https://www.tesla.com/configurator/api/v3/terms?locale=en_US...
I can see quite a few people regretting buying such an original car (to put it in a non offensive way). It would be more fair to add a clause that doesn't let you resell it above a specific % over the original price.
Although you can’t sell it for a year, you can still sell someone an option to buy it after a year has passed for some agreed upon price and mileage. Or maybe you can do a lease-to-own type deal.
So people seems to be confusing two different aspects when buying a Tesla truck. You are buying the physical truck and the "suscription" to use with Tesla services (supercharges, updated, warranty, etc).
Yes, you own the physical truck and you can do whatever you want with it. It's yours. You can destroy it, you can set it on fire, you can paint it as you want. And you can sell it before the year. But doing this last one (and some of the ones before) will break your agreement for the suscription/services part.
I do not support this idea, although I understand where it is coming from. Just explainign this because a few comments are saying "I don't own the truck?" and yes, you do, but you don't own access to their services forever.
Yes, you own the physical truck and you can do whatever you want with it. It's yours. You can destroy it, you can set it on fire, you can paint it as you want. And you can sell it before the year. But doing this last one (and some of the ones before) will break your agreement for the suscription/services part.
I do not support this idea, although I understand where it is coming from. Just explainign this because a few comments are saying "I don't own the truck?" and yes, you do, but you don't own access to their services forever.
Why would you want to continue using the "services" if you've sold the truck?
I take it that the person buying it will be less likely to want it.
I guess the service is attached to the truck and not the person. So you sell the truck and the buyer cannot use the service for their new truck anymore.
This is why the idea of subscriptions embedded in physical products like cars needs to go.
But it's THE Cybertruck from Tesla, the most anticipated status symbol from our meme lord and savior, the X-man himself, Elon Musk.
People will line around the block to buy his subscription vehicles, no matter how silly they get, and because of that, every auto maker will follow suit.
People will line around the block to buy his subscription vehicles, no matter how silly they get, and because of that, every auto maker will follow suit.
You probably ought to read the link before commenting. This isn't about the service agreement (which Tesla already screws owners on) but about a new, improved addition to the sales agreement which straight up says that you owe Tesla fifty thousand dollars if you sell the truck.
You can do whatever you want with it... you just owe Tesla $50k if you do.
You can do whatever you want with it... you just owe Tesla $50k if you do.
The parent comment is just wrong on it's main point, and several other points. Here's the Cybertruck specific text from the agreement image:
"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."
"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."
You still own it and can still sell it. There is just a clause in the original bill of sale giving Tesla the right of first refusal at a pre-negotiated price within the first year. You can look at the $50k (or sales windfall) as the cost of breaking the ROFR clause of your original sales contract. Tesla can opt not to buy it and then you can resell it. The “consent” is implicit at that point of their refusal but you and your buyer will want that refusal in writing, so that any subscription or warranty requirements of the vehicle can transfer to the new owner.
"if you must sell the Vehicle within the first year...and Tesla agrees that your reason warrants an exception to its no reseller policy"
I don't own it if the original seller gets to decide if I'm granted an exception to sell it. Note there's no listed criteria for that decision, so it's arbitrary, at Tesla's discretion. All the things you're citing hinge on that exception being granted by Tesla in the first place. There's other problems with the language as well.
I don't own it if the original seller gets to decide if I'm granted an exception to sell it. Note there's no listed criteria for that decision, so it's arbitrary, at Tesla's discretion. All the things you're citing hinge on that exception being granted by Tesla in the first place. There's other problems with the language as well.
It’s not unusual to have stipulations in a sales contract. If the stipulations aren’t desired for the transaction a party can always opt to not purchase…or not to sell.
These particular terms were added well after people paid a deposit.
Seems to me there was literally no risk to the buyer to bow out of the sale before the sale is final.
“Until your Vehicle is delivered to you, you may cancel your pre-order at any time, in which case you will receive a full refund of your Pre-Order Payment”
https://www.tesla.com/order/download-order-agreement?redirec...
“Until your Vehicle is delivered to you, you may cancel your pre-order at any time, in which case you will receive a full refund of your Pre-Order Payment”
https://www.tesla.com/order/download-order-agreement?redirec...
This isnt new; I got a Mercedes van this year and had a 1-year no-sale clause in my purchase contract.
And why in God's name did you accept that?
They were probably planning on using it for a year or so.
I don’t think I’d be put off buying a car with an agreement that said I couldn’t sell it within a year, the moment the car leaves the forecourt it’s already lost 20%, if not more anyway, unless I was hoping to flip a car(?) then what would the issue be?
I don’t think I’d be put off buying a car with an agreement that said I couldn’t sell it within a year, the moment the car leaves the forecourt it’s already lost 20%, if not more anyway, unless I was hoping to flip a car(?) then what would the issue be?
Maybe you realize it's a bad car for you, and want to get something different?
This isn't a new idea; Ferrari has been doing this for a "while".
The difference with Ferrari is that if you're a real Ferrari buyer, you will want to be a valued customer so you can have a shot at buying another (new) Ferrari in the future. As there are more customers than cars, always now, Ferrari can be selective in who they sell to. And with exotic cars now being mostly appreciating assets, it really is a privilege to be able to buy one new.
Tesla is a very different story. While their new models are in higher demand than supply, they are not appreciating assets. And Tesla does not have a "great automotive history" as Ferrari does. It's quite possible that in 20 years, Tesla will be gone or on par with a typical car company in terms of brand value. There may be another hot electric mfg which produces the new models that people want. In fact, that is likely to be the case within 10 years.
Tesla is a very different story. While their new models are in higher demand than supply, they are not appreciating assets. And Tesla does not have a "great automotive history" as Ferrari does. It's quite possible that in 20 years, Tesla will be gone or on par with a typical car company in terms of brand value. There may be another hot electric mfg which produces the new models that people want. In fact, that is likely to be the case within 10 years.
The other big difference is that if you buy a cyber truck you'll be the laughing stock of your town. Tesla know this, and know that everyone is going to want to get rid of it as soon as possible when kids start pointing and laughing at them in the street.
Or kids will want to test the strength of the windows...
For a good time, look for videos of people shattering car windows with small bits of ceramic (like from a spark plug insulation ring). It's hard to believe.
I wonder how the Tesla truck windows would do...
I wonder how the Tesla truck windows would do...
It's also worth mentioning that Ferrari also asks you to simply call them first, before selling it (within that first year). I've never bought a ferrari but it seems like you have some options depending on your needs/situation/etc.
Can they do this?
I mean, they can decide to only provide maintenance and software upgrades to the original buyer in the first year. That's their business decision and the market will decide whether this makes their product less alluring or not.
But if I buy something, it becomes my property and I can do whatever the hell I want to do with it. Or did I miss a memo?
I mean, they can decide to only provide maintenance and software upgrades to the original buyer in the first year. That's their business decision and the market will decide whether this makes their product less alluring or not.
But if I buy something, it becomes my property and I can do whatever the hell I want to do with it. Or did I miss a memo?
You cannot do whatever the hell you want with it, what is wrong with you?
You agree to a terms and service and if you violate them you will be punished by having your car blacklisted and blocked from superchargers, updates, service at Tesla dealerships, warranty void, etc. Accept it.
You agree to a terms and service and if you violate them you will be punished by having your car blacklisted and blocked from superchargers, updates, service at Tesla dealerships, warranty void, etc. Accept it.
You missed the memo of tesla being anti-consumer as hell
I own a Model Y, and I disagree. This is the first time in my life a company has treated me so well. I mean, they pretty much assign a TPM to you who is always just one text message away. Another nice thing is that if anything in the car gets broken, you simply make a request through the app. A technician(s) comes to your place and fixes everything while you drink your tea and watch Netflix. Anti-consumer? Unless you meant something else, Tesla is hilariously pro-consumer.
My guess is that they can, as it is a requirement for buying one..
Anyone can write anything in a contract -- but a contract can not supersede the law. My question could be restated: if someone did sign this contract and then sold their car and Tesla deactivated the car would a court of competent jurisdiction strike that clause and compel Tesla to reactivate it? (Possibly finding tortious interference as well since the first buyer could not fulfill its contractual obligation of delivering a car to the second buyer.)
> would a court of competent jurisdiction strike that clause [...]?
Probably not.
The following is a simplification and approximation.
A contract is a legally enforceable promise. What turns a promise into a contract is "consideration".
I don't want to delve too deeply into this because something like 80% of the Contracts class in law school is trying to figure out what the heck "consideration" actually is but roughly it is a promise, action, or restraint from action bargained for by a promisor in exchange for the promise.
In this case, Tesla (the promisor) is promising to transfer ownership of a Cybertruck to the buyer and in exchange for that promise wants the buyer to pay money and restrain from reselling the Cybertruck within a year.
What seems to get people hung up is that if you own something you can generally legally sell that thing. But that's what makes agreeing not to sell work as consideration. Consideration has to have some value.
If the purported consideration is doing an action that you were already legally obligated to do or refraining from an action that you would not have been legally allowed to take it does not have sufficient value to work as consideration.
Agreeing to refrain from an action you can otherwise legally take is fine as consideration.
Probably not.
The following is a simplification and approximation.
A contract is a legally enforceable promise. What turns a promise into a contract is "consideration".
I don't want to delve too deeply into this because something like 80% of the Contracts class in law school is trying to figure out what the heck "consideration" actually is but roughly it is a promise, action, or restraint from action bargained for by a promisor in exchange for the promise.
In this case, Tesla (the promisor) is promising to transfer ownership of a Cybertruck to the buyer and in exchange for that promise wants the buyer to pay money and restrain from reselling the Cybertruck within a year.
What seems to get people hung up is that if you own something you can generally legally sell that thing. But that's what makes agreeing not to sell work as consideration. Consideration has to have some value.
If the purported consideration is doing an action that you were already legally obligated to do or refraining from an action that you would not have been legally allowed to take it does not have sufficient value to work as consideration.
Agreeing to refrain from an action you can otherwise legally take is fine as consideration.
IANAL, but i would expect that even if that clause of the contract would hold in court (and perhaps even forces the seller to pay some contractual penalty to Tesla for a breach of contract), it would still be illegal for Tesla to tamper with third-party owned car and deactivate it, because Tesla has no contract with the new owner, and the ownership was legally transferred to a third party, even if that transfer was a breach of contract.
The point is that the contract is bound to the person who accepted it, not to a property itself (there are exceptions for specific types of contracts on realty).
The point is that the contract is bound to the person who accepted it, not to a property itself (there are exceptions for specific types of contracts on realty).
Other car manufacturers can (e.g., Mercedes, Ferrari), so is Tesla. Nothing new here really.
I think ford did the same thing with the new GT
This is apparently a change to the order agreement. I can't see how it'd be held up in a court of law if they don't make people sign the new terms.
(archive.org links to prevent those from changing from under me)
v20211124 Cybertruck preorder terms: https://web.archive.org/web/20230614191305/https://www.tesla...
v20220720 Model 3 order agreement (archived just yesterday): https://web.archive.org/web/20231113101113/https://www.tesla...
Model 3 order agreement, live link (v20230201 at time of posting): https://www.tesla.com/configurator/api/v3/terms?locale=en_US...
It is notable that all models seem to have the new section about ordering for resale being banned, but none that share the reported 1-year limitation on resale for the cybertruck.
Supposedly this is a new section titled "For Cybertruck Only" [0] but when I play around with the URL I find the preorder agreement for the cybertruck, and the other models don't seem to have the cybertruck-only section.
[0] as reported by business insider: https://www.businessinsider.com/tesla-sue-cybertruck-buyers-...
(archive.org links to prevent those from changing from under me)
v20211124 Cybertruck preorder terms: https://web.archive.org/web/20230614191305/https://www.tesla...
v20220720 Model 3 order agreement (archived just yesterday): https://web.archive.org/web/20231113101113/https://www.tesla...
Model 3 order agreement, live link (v20230201 at time of posting): https://www.tesla.com/configurator/api/v3/terms?locale=en_US...
It is notable that all models seem to have the new section about ordering for resale being banned, but none that share the reported 1-year limitation on resale for the cybertruck.
Supposedly this is a new section titled "For Cybertruck Only" [0] but when I play around with the URL I find the preorder agreement for the cybertruck, and the other models don't seem to have the cybertruck-only section.
[0] as reported by business insider: https://www.businessinsider.com/tesla-sue-cybertruck-buyers-...
Discussed previously
https://news.ycombinator.com/item?id=38236701
https://news.ycombinator.com/item?id=38236701
[dupe]
Does no one read the site anymore?
Lots more discussion over here:
https://news.ycombinator.com/item?id=38237287
https://news.ycombinator.com/item?id=38236701
Does no one read the site anymore?
Lots more discussion over here:
https://news.ycombinator.com/item?id=38237287
https://news.ycombinator.com/item?id=38236701
Tesla is REALLY WORRIED about a price collapse for used Cybertrucks once owners experience them.
It remains to be seen whether there will be a strong second-hand market for this vehicle in six month's time.
I'm guessing this restriction wouldn't hold up in most (state) courts.
Also, you would have to be a huge fanboy to accept a restriction like this. There's a reasonable chance that actual life with that truck might be less pleasant than imagined, and that selling it after a few months would be a reasonable desire (not just flipping it for $$$).
That said, I think the effective scalping that goes on these days with limited quantity items is lowest common denominator human behavior. So given that some truck sales will go to people who merely intend to flip it for a profit, I can understand the desire to try to restrict the resale.
Also, you would have to be a huge fanboy to accept a restriction like this. There's a reasonable chance that actual life with that truck might be less pleasant than imagined, and that selling it after a few months would be a reasonable desire (not just flipping it for $$$).
That said, I think the effective scalping that goes on these days with limited quantity items is lowest common denominator human behavior. So given that some truck sales will go to people who merely intend to flip it for a profit, I can understand the desire to try to restrict the resale.
I hate scalpers. I'm too busy doing HFT to deal with the problems they make.
If I buy something surely I own it and can make that decision myself?
Nothing is owned with unrestricted rights. I “own” my house but if I don’t do what the HOA says they can sue me. If I don’t pay my property taxes it can get taken away. Ownership is really just a specification of rights. So you’re paying for a set of rights and those can be negotiated.
Statutory law defines what limitations corporations may apply to you. Ergo it's more complicated than an arbitrary restriction.
And there go the last vestiges of the concept of ownership.
I think that this is a hype-building technique on Tesla’s part
[deleted]
Eh, price scalping sucks. This is the lesser of two evils.
You would rather not own things you buy than have things sold at market price?
Freedom!
from speculators running up prices.
Think of the children! I mean, the buyers!
I'm in favor of consumer protection, but it should be a broad law, not a "EULA".
However, in this case: what's against a bit of price jacking? Do we need to feel sorry for people who want to buy a Cybertruck?
However, in this case: what's against a bit of price jacking? Do we need to feel sorry for people who want to buy a Cybertruck?
If you saw these terms for a console launch or graphics card launch, you wouldn't complain.
It's probably not enforceable, but the idea isn't crazy.
EDIT: I was referring to the resale clause. Just saw the remote deactivation point too, which really is awfully dystopian.