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Tesla will launch Certified Pre-Owned Option

Tesla will launch Certified Pre-Owned Option

By Ross Kenneth Urken

Tesla has recently confirmed it will launch a program to offer certified pre-owned vehicles, which would allow customers to buy the electric cars at lower price points.

That’s great news for consumers who can’t afford a new Model S at $70,000 base (over $90,000 with options) or the much-anticipated Tesla “D” product set to be announced today.

But as attractive as it is for car buyers to get a warranty-backed Tesla on the cheap, the move is mostly a gambit for CEO Elon Musk and his company to gain market share. Of course, the strategy is not without risk for the automaker.

This CPO offering is all part of Tesla’s long-term strategy.

Back in April 2013, Musk announced that customers who had financed a Model S could return the car three years later for 50% of the original base price and 43% of any options, a guaranteed residual based on the Mercedes S-Class.

That means about 20 months from now, there will be a lot of used Model S’s to re-sell and an opportunity for new customers to gain entry to the company’s offerings.

“This step is a natural progression of the Tesla brand,” said Scott Upham, president of Valient Automotive Market Research. “Due to the high degree of technical expertise required for maintaining and now certifying these complex vehicles, consumers are willing to pay a premium price for the pre-owned certified accreditation from the manufacturer themselves.”