Dennis Wang lost money on the first try, but then learned from his mistakes.
The second time, as an electric car flipper, Wang earned $4,000. On his third, he achieved what he considered a golden spot, a $7,000 profit. All deals involved Tesla cars that Wang bought and resold, reselling them like tickets to a hot concert.
“I currently have a Model S that I’m probably going to sell within the next three months, pending its release to the market,” Wang said. “I also have another Model Y and Model X in the order.”
Buying and reselling things is as old as commerce itself, full of cautionary tales and questionable legality. Turning houses has become so tempting that several reality shows hype the process and persons involved.
Now there is a new generation of flippers who hope zero emissions will bring big profits. They are being helped by an unusual combination of factors that are hurting EV manufacturers (supply chain issues, semiconductor shortages, missed production targets, growing shortage of lithium batteries) as well as car buyers (record fuel prices, high used car prices, long queues for EVs). ). vehicles).
Some, like Wang, a 33-year-old car geek with crazy spreadsheet skills, have learned to flip cars, with a recent emphasis on electric vehicles. Some EV enthusiasts are finding buyers willing to pay exorbitant amounts sometimes, tens of thousands more than retail price, to purchase cars.
Consider a person trying to sell a nearly new 2022 Hummer EV1 for $220,000 on Facebook. It retailed for less than half that amount, $105,000.
Also on Facebook, two 2022 Rivian R1T electric adventure cars are up for sale for $123,000 and $220,000. On the Rivian website, the same car costs from $67,500. Buyers on the online auction site Cars & Bids could find them for $97,000 and $103,000. While the more outrageous requests to double or triple the cost of some EVs are either ignored or vilified online, some lesser listings are making headway.
Cars & Bids, for example, lists the last 14 R1T sales between April 12 and June 28, priced between $106,000 and $138,000.
In June, Tesla raised the price of its Model Y by 5% to $65,990, but that didn’t stop the last. A Model Y with less than 2,800 miles was recently listed for sale at Edmunds for $70,995. Edmunds thought it was a “good price” of $1,739 “below market” as the market says such a machine is worth it.
Eddie Greebust making a living out of Mercedes-Benz Sprinter gear. vans for off-grid use, recently unloaded a Tesla Model Y that he has been using as a family car for nine months.
Greebust was so excited about the deal — the buyer flew from Las Vegas to Boise, Idaho to complete the deal — that he posted a YouTube video titled:Selling my Tesla for $5,000 profit! Here’s how. “
“Because my business is buying and selling these Sprinters, I am aware of things like microchip shortages,” Grybust said. “And everyone was talking about the fact that the secondary market especially grew by 20-30%.
“I was going to order [Tesla] Model X and Cyber Truck. Delivery times ranged from nine months to a year, and this obviously indicated high demand and, consequently, low supply. From there, he took advantage of simple economics.”
Former Chief Economist of the Securities and Exchange Commission Larry Harris teaches this lesson to students of the School of Business. Marshall University of Southern California.
“When supply and demand don’t match, you get opportunities that smart people can take advantage of,” Harris said. “We have seen this in all markets. When the prices of a scarce commodity change significantly, some buyers will realize that the item is of greater value to others than to themselves, and will sell to people who are willing to pay more than they would pay and profit from it.”
Or, as Grybust put it in his video, deploring Tesla’s rejection: “I have a simple rule: if someone gives you a profit, all you have to do is close that hand and walk away.”
Recurent, which tracks the used electric vehicle market and provides car buyers with independent reports on EV performance and battery life, noted in his latest market assessment that in 2021, used electric vehicles “make up an astonishing 17.5% of inventories.”
A Seattle-based startup found that used electric vehicles have risen in price by 25% since March 2021. On average, he said, the 2021 Mustang Mach E sold 60% more than last year. Citing what it called “the new normal inflated prices, they will stay,” Recurrent said that the sales trend for used electric vehicles is heavily skewed towards the latest models available.
“Oddly enough, we’ve heard of many owners who have sold fairly new cars to dealers and made more than their purchase price, and the numbers show that makes sense,” Recurrent said. “Reselling a car that is barely owned works differently for different cars. As for Tesla, the price of new cars has gone up so much in the last year, and the waiting periods for new cars are so long, that the cost of used cars has skyrocketed.”
If you have a relatively new electric car, Recurrent advises you to start playing right away.
“If you are an electric vehicle owner or dealer, now is the right time to post a list of used electric vehicles. Since we assume prices won’t move much in the coming months, holding onto your car risks flooding the market with higher inventory.”
If you’re one of those hoping to get an electric car, “it might not be profitable to wait for the price to go down,” Recurrent said.
Electric vehicle rollover restrictions depend on where you live.
In France, where flippers have been reselling nearly new electric vehicles for profits of $10,000 or more, the government changed its energy code in June to prevent the immediate resale for profit of electric vehicles purchased with government incentives. Electric vehicle owners must now keep their vehicles for a year before reselling.
Germany has suspended the resale of electric vehicles for six months, but is considering extending the wait to a year starting in 2023.
In the US, several states are limiting the number of cars – electric or not – that a person can buy and resell up to a year before they need it. vehicle dealer license, which in California requires you to take an online course, take a DMV-administered test, pay fees, and meet other requirements. The states are trying protect consumers from hijackers and unscrupulous sellers and protect car dealers from street competition.
If you’re selling a car for profit, in California, for example, you must have a car retail license, the DMV’s California Licensing Office said, even if you’re using a car auction site as an intermediary.
In California, obtaining such license requires a six-hour course, passing a test, and paying fees. Most EV manufacturers can’t sell large volumes anyway because it takes too long to get the cars. In terms of enforcement, according to California’s DMV Investigation Unit, the agency’s main targets are those who engage in unlicensed mass sales or who sell automobiles. However, it pays off – no pun intended – to play by the rules; violating them can result in fines and possible jail time, depending on the severity of the case.
Los Angeles resident Wang, a digital marketing consultant for the auto industry who said he was getting a sales license, said he had heard of several electric vehicle buyers on waiting lists already in talks to sell them after delivery. Some want an even faster dollar, he said.
“I heard that some people transfer their bookings to your name for a fee,” Wang said. “There are ways to do it, but it’s very difficult.”
Here you can also sharpen the golden goose. Wang recently posted video on his YouTube channel, giving examples of people who were banned from buying new Teslas because they resold them too soon and too often.
When it comes to cars, Wang loves them and keeps them.
Although his focus has been on electric vehicles lately, Wang has resold several dozen vehicles over the years, first buying them on Craigslist and modifying them a bit before selling them. Of course, he remembers the first car he overturned, just like a car and a profit.
“It was a Lexus ES 300. I bought it for $3,000 and sold it for $4,000,” Wang said.
Wang insists he’s not really doing this for the money; he just wants to drive as many cool cars as possible.
“Life is about experiences, right? I like cars. So it just gives me the pleasure of being able to drive a bunch of different species,” Wang said. “Before that, I worked at BMW, and at various times I had 20 BMWs. So it’s the same thing that I just do with Tesla.”
Wang said his best customers are car dealers.
“I sold one to a private buyer and then I realized the dealers would just write you a check, and that’s even easier” than a private sale, Wang said.
His advice for potential car fins?
“Don’t pay for a lot of extras unless it’s a car you’re going to keep,” he said, “and don’t wait too long to sell it.”