Tesla Motors says it will offer guaranteed secondhand-car pricing in its first year, after a first-hand-care contract with a local manufacturer.
Key points:Tesla says it has a secondhand car contract with an electric-car makerTesla says the offer comes after a trial with a second-home-equity companyLast year, Tesla had to cancel its contract with second-Home-Equity for an extra yearIn the first quarter of 2019, Tesla and Home Capital agreed to extend the guarantee for two years, and the agreement is set to expire in March 2020.
In the letter, Tesla CEO Elon Musk said the offer came after a successful trial with Home Capital.
“We believe this is a very good move by Tesla, and we have no reason to doubt its sincerity.
We expect this offer will help Tesla meet its commitment to make its second-homes available for purchase, as we have done with our own customers,” he said.”
Home Capital is very pleased to be part of the Tesla family and look forward to working with the company to further grow its business.”
The offer comes as Tesla’s shares fell on the news, with the stock hitting an all-time low of $17.96 a share.
The company’s share price has declined by more than 40% this year, although it is still up more than 7% on the S&P 500 index.
Last year’s deal with Home Equity also covered two years of guarantees.
The offer was made after a second hand-care trial with another local car maker, Telsa.
The first-of-its-kind guarantee came as Tesla faced a challenge in China, where it had to reduce production to meet surging demand for electric vehicles.
After the trial, Tesla said it had cut its production by up to 20%, while Home Capital cut its output by 20%.
Tesla’s second-year offer is expected to start from the end of March 2020, when it plans to launch a limited range of vehicles.
“The offer of guaranteed second hand car prices from Tesla is a great first step towards making Tesla the best choice for people who want to buy second hand cars and who want their second hand vehicles to be as good as new,” Home Capital chairman and CEO David Gubbs said in a statement.
“Tesla has made a clear commitment to making cars that are first-class and affordable, so it’s great to see that the company has responded to that commitment.”
Shares in Tesla closed down 0.8% at $185.03, with Home equity shares down 1.5% at 1,073.80.