Early Cybertruck owners will be prevented from reselling their vehicles until a year after they take delivery, according to an update to Tesla’s Motor Vehicle Purchase Agreement.
With the Tesla Cybertruck hitting the road at the end of this month, we’re gradually starting to learn more and more about it. We’ve recently seen it doing some offroading, wrapped in matte black, and seen a leak of every single dimension so we finally know how big it is.
And as hype has been building closer to release, an auction was held last month by the Petersen Automotive Museum in LA, where an “early Cybertruck VIN” was auctioned off for the cool sum of $400,000.
So you may be thinking: I have an early Cybertruck reservation, maybe I’ll be able to get a low VIN and do the same?
Well, not if Tesla has anything to say about it.
Turns out, Tesla will stop anyone from reselling a Cybertruck in the first year, and if a situation comes up where you have to resell the car, Tesla demands that you give it first right of refusal for the sale before putting it up to the public. And if you do resell your car and don’t tell Tesla about it, the company threatens to sue you for $50k (or more) and may not sell you any future vehicles.
The clause was added to Tesla’s Motor Vehicle Purchase Agreement, which you can read directly on its website. Under the “No Resellers” section, which normally stops dealerships from buying Teslas en masse to resell them, a section has been added labeled “For Cybertruck Only,” and reads thusly:
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.
Note that there are exceptions available – if you do have good reason to need to resell your vehicle, you can notify Tesla, and if Tesla says okay, then you can sell the car back to the company. But that depends on what buyback price Tesla comes up with, and whether it even decides to accept your reasoning in the first place.
Tesla is no stranger to having popular vehicles that resell for well over sticker price on release. Several of Tesla’s previous vehicles have trickled out onto the road in limited numbers at first, with early owners having the chance to resell them for much more than they paid.
Some of these early models have ended up being bought by other automakers, presumably for reverse-engineering purposes. And we could see that being the case with the Cybertruck, which has many aspects that are a departure from traditional vehicle manufacturing (extra-thick stainless steel body, 48-volt electrical architecture, etc.), which will certainly be of interest to other automakers.
And it does make for a more chaotic release, with buyers scrambling to try to get an early car and scalp it for profits, and low-VIN cars that traditionally have more problems ending up in the hands of people who paid way too much and who don’t have a pre-existing relationship with the company.
Tesla tried to control this with the Model 3 release, with the first several months of vehicles going to employees rather than the public, and the first public cars mainly going to people who already had a Tesla, were close to the factory, and who had camped out overnight to reserve one.
So there are certainly reasons that companies might want to place some limits on early cars.
And despite that this might seem legally unenforceable at first glance, these sorts of clauses are actually relatively common in the rare car world. For example, wrestler John Cena was one of the first to get a Ford GT in 2017, but resold the car within a few months in violation of a clause in Ford’s purchase agreement disallowing resale for two years. Ford sued him and the case ended up being settled with an apology by Cena and donation of proceeds to charity.
Ferrari is also notorious for this sort of behavior – to buy Ferrari’s limited-edition cars, you pretty much need to be on a list of known customers, and the company will refuse to sell cars to certain people for various reasons. Ferrari also has a first right of refusal contract, and may even prevent you from wrapping its cars.
We’ve seen it in EVs, and even in EV trucks, as well, as the Hummer EV originally had a 12-month no-resale provision, later lowered down to 6 months.
But those cars are much more expensive and much more limited than the Cybertruck. Clauses like this are a lot rarer with vehicles that are meant to have mass appeal or to sell in large numbers – which Tesla has recently said is the case for Cybertruck.
Of particular note is that Tesla says Cybertrucks will “first be released in limited quantity.” While this seems like it would be true on its face for just about any vehicle, in Tesla’s Q3 update, the company said that it currently has production capacity of 125,000 vehicles a year.
While it perhaps will take a little time to ramp up to 125k from the start, this sounds like Tesla is promising to deliver six figures worth of cars in the next year. So early buyers may not be able to resell their cars until six figures worth of cars are out there.
Regardless of how common or reasonable these clauses might be, it should be said that they are also quite unpopular. Nobody likes a scalper, but also nobody likes being told what they can’t do with their car.
Anyone who has walked into a Ferrari dealership can tell you that it’s not a great company to buy from. Unless they already know who you are, they act like you shouldn’t be there, like they couldn’t care less if you wanted to buy their car or not. They’re not selling the cars for you, they’re selling the cars for them.
Top comment by CMG30
I suppose it depends on the intent behind this clause, but I’m not immediately opposed to it. Scalpers are a huge problem so any attempt to short circuit these folks should be seriously considered.
It’s elitist, it’s haughty, and frankly, I think it makes a lot of people less interested in their cars, not more. And in the early days of the Roadster, one of Tesla’s sales tactics was to tell customers to head to the Ferrari dealership next door and see if they’ll even talk to you, then come back over here if they won’t.
So it’s disappointing to see a similar clause in Tesla’s purchase agreement, especially without any sort of explanation of why or how long it will be there. Hopefully not long.
One thing we don’t know is how long the clause will last. Will this only apply to the first month or two of deliveries, to everyone in 2023, or to everyone in the first year? If Tesla does plan to release five or six figures worth of trucks, it seems a little onerous to have a year worth of reselling provisions for that many owners. If it’s only for early employee/VIP purchases and will disappear as the floodgates open to wide delivery in significant production numbers, then that’s not so big of a deal.
We’d ask Tesla about this, but they have no PR department, so you’ll have to come up with your own explanation.
Author: Jameson Dow